A Review of the South Carolina Second Injury Fund
Members of the General Assembly requested an audit of the South Carolina Second Injury Fund (SIF). The requesters wanted to know if the fund is meeting its goals and whether it should be continued. They also wanted to know whether the SIF has handled claims efficiently and in compliance with the law.
The Second Injury Fund is a component of the workers’ compensation system. The fund seeks to protect employers from potential higher costs of insurance they could incur by employing an individual with a prior disability. State law requires the SIF to reimburse employers or their insurance carriers for workers’ compensation benefits paid for an employee who has an injury that is substantially greater because of the employee’s prior disability. The SIF is funded by an annual assessment paid by insurance carriers and self-insured employers. The SIF’s goals are to advance the hiring and retention of disabled employees and protect employers from increased workers’ compensation costs. We found that the Second Injury Fund is not needed and should be phased out.