Johnson: SIF Premium Assessment Increase
Monday, December 18, 2017 | 401 | 0 | 0 min read
In my opinion, there are three reasons for the increases in California's Subsequent Injuries Benefits Trust Fund costs:
SB 899 and also SB 863 were specifically tailored to expand employers' and carriers' ability to “apportion” disability that previously could not be apportioned.
The Escobedo case held that apportionment could be assigned to pre-existing pathology. Escobedo advised that the “but for” concept of apportionment was no longer to be followed. That the concept of “lighting up” a previous condition (meaning that there was no apportionment if there was no prior disability) was also abolished.
Thus, many, many more cases have had takeaways from the permanent disability award, with the carriers and employers paying less, and the injured employee receiving less.
Next came the Benson case, which advised that the longstanding rule that multiple injuries causing one disability could be combined (the Wilkinson rule) was abolished. Instead, if two, three or four injuries combine to cause one spinal disability, the spinal disability will be divided into four pieces. If the claimant were 100% disabled and the division were equal, each carrier and each injury would be responsible for a 25% rating.
In all of these types of cases, the apportioned disability can be combined via SIBTF to an overall disability that may be much higher than any of the individual injuries. For example, the four 25% ratings would add up to a combined 100%. Thus in California, the insurance carriers have been able to transfer liability to the SIBTF because of the apportionment changes via changes in the law and from Escobedo and Benson.
We then have the aging working population. Older workers, frankly, are more susceptible to being put out of work by an injury. They cannot be retrained as easily at 60 as if they were 25.
There is (notwithstanding anti-discrimination laws to the contrary) still age discrimination. Most employers do not want to take on the burden of retraining an older worker to totally new job tasks because of a work injury that took that employee off his longstanding career. Thus, it is very difficult to retrain a 55-year-old carpenter to be a bookkeeper.
The truth is that many of our SIBTF claimants have cut out a niche in the labor market they are able to work at until an industrial injury takes them down. Because of pre-existing disabilities, either industrial or non industrial or both, they are then out of business.
The employer does not now pay for that total disability, even though the employer caused the total loss of earning capacity through the last work injury. Thus, the liability falls back onto the SIBTF for the overall combined total disability.
Because the fund's costs are ultimately borne by a premium surcharge on employers and carriers, it seems entirely appropriate that those costs would go up, with the increasing use of employer apportionment theories, a la the Escobedo and Benson cases, to transfer liability out of their responsibility and onto the employee.
These claimants for SIBTF benefits typically are totally disabled. At least 70% or more disabled in order to qualify. Those are very serious levels of disability and they are some of the most deserving claimants in the entire system.
If they cannot return to work and the employer is not paying a life pension or total disability when it is the employer’s injury that takes that claimant off of work, it is very appropriate that the employer community bear the cost rather than the claimant, who may be economically very marginal and whose working career — including his ability to receive a longevity pension or Social Security — has also been cut short.
Again, with the employers not being responsible for the totality of what is caused by the last injury and the loss of employment, the SIBTF picks up that cost. It is entirely appropriate that the fund do so.
Arthur L. Johnson is a claimants' attorney for Butts & Johnson, a workers' compensation and Social Security disability law firm in San Jose. This opinion appears here with permission.