As part of New Jersey’s Workers’ Compensation System, there is a Second Injury Fund made up of money collected by the State from insurance premiums. The purpose of the Fund is to encourage the hiring of employees with disabilities, especially disabled veterans, who might be rejected for hire out of an employer’s fear that their preexisting conditions might result in increased employer cost.
Simply put, the Second Injury Fund contributes money to defrayed employers or their insurance company’s cost of benefits to totally disabled workers. This happens when the total disability is the result of a combination of the preexisting conditions and the work related injury.
Since 1992, 19 states have abolished this fund. New Jersey’s fund has been depleted by 30 million dollars taken from the fund by the State Legislature and used to balance the State budget. Now the fund has to borrow money to meet its current obligations. In New Jersey, there is growing sentiment within the Christie Administration to eliminate the Second Injury Fund or to end benefits at age 65. This saves the administration the trouble with having to go through the accounting process of borrowing the money from the Treasury Department and paying it back out of collections from the insurance companies and employers. They claim among other things, that since the enactment of the Americans with Disabilities Act, there is no need for such a fund. When I began practicing in workers’ compensation many years ago, I represented WW II veterans after reaching middle age had suffered work related injuries which rendered them unable to work in conjunction with their war injuries. They were deprived of the opportunity to save adequately for retirement. Since then I have been proud to represent not only WW II veterans but Korean War and Vietnam veterans and obtain for them these total disability benefits.
The time is not too distant when veterans of the Iraq and Afghanistan wars will require the benefit of the Second Injury Fund in New Jersey to compensate them for their inability to earn a wage. Published studies have concluded that the employment situation for disabled workers has grown worse since the enactment of the Americans with Disabilities Act and, therefore, that cannot be counted upon as a means of encouraging employers to hire the disabled. These workers see their working career shortened thus depriving them of the opportunity to save for a comfortable retirement. A second injury fund that limits benefits after a disabled worker reaches 65 years of age will leave these workers destitute.
As such, the answer here is not to limit Second Injury Fund benefits but for the New Jersey legislature to have the will to replace the 30 million dollars that appropriated from the Second Injury Fund to fill gaps in the State budget.
Arthur Kravitz is a Shareholder in Stark & Stark’s Lawrenceville, New Jersey office, specializing in Workers’ Compensation Law. For more information, please contact Mr. Kravitz.