2005 Annual Report
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STATE OF GEORGIA SUBSEQUENT INJURY TRUST FUND 2005 ANNUAL REPORT If you wish to obtain this report in an alternative format, please contact our office. Subsequent Injury Trust Fund – 2005 Annual Report Page ii STATE OF GEORGIA SUBSEQUENT INJURY TRUST FUND SUITE 500 NORTH TOWER 1720 PEACHTREE STREET, NW ATLANTA, GA 30309-2462 TELEPHONE: (404) 206-6360 FAX: (404) 206-6363 WEBSITE: http://sitf.georgia.gov This publication can be accessed on the web. For additional copies, please call our office. Subsequent Injury Trust Fund – 2005 Annual Report Page iii AGENCY OFFICIALS BOARD OF TRUSTEES John T. Fervier, II – Chairman Donald R. Avery (resigned April 2005) Jimmy C. Beck, Sr. James F. Braswell James C. Thompson EX-OFFICIO MEMBERS Stan Carter, State Board of Workers Compensation John W. Oxendine, Insurance and Safety Fire Commissioner ADMINISTRATOR Richard W. McGee DEPUTY ADMINISTRATOR David L. Taylor Subsequent Injury Trust Fund – 2005 Annual Report Page iv MISSION STATEMENT The Subsequent Injury Trust Fund provides reimbursement and information to employers, insurers, and their agents, in those Worker’s Compensation claims involving individuals with a pre-existing permanent impairment. VISION STATEMENT The Board of Trustees and staff of the Subsequent Injury Trust Fund commit to bringing awareness of the financial benefits available to employers, insurers, and their agents by continuing our efforts to build positive relations in the risk management arena. Subsequent Injury Trust Fund – 2005 Annual Report Page v TABLE OF CONTENTS Fund Administration ..............................................................................................................1 Introduction........................................................................................................................1 How the Fund Works .........................................................................................................1 Reimbursement from the Fund...........................................................................................1 Claims Administration .......................................................................................................2 Claims Activity – 2005 ......................................................................................................2 Financial Activity - 2005 ...................................................................................................3 New Legislation .................................................................................................................4 Claims Reported for 2005 ......................................................................................................5 Claims Reported by Insurance Companies ........................................................................5 Claims Reported by Group Self-Insurers...........................................................................9 Claims Reported by Self-Insured Companies..................................................................10 Reimbursements Paid in 2005..............................................................................................16 Reimbursements Paid to Insurance Companies ...............................................................16 Reimbursements Paid to Group Self-Insurers..................................................................20 Reimbursements Paid to Self-Insured Companies...........................................................21 Individual Employers Benefiting from Reimbursements ................................................26 Assessment 2005..................................................................................................................54 Legal Requirements .........................................................................................................54 Assessment Calculation ...................................................................................................55 Assessment Rate for 2005................................................................................................56 Assessments Due for 2004 and 2005 ...................................................................................57 Insurance Companies .......................................................................................................57 Group Self-Insurers..........................................................................................................66 Self-Insured Companies...................................................................................................67 Subsequent Injury Trust Fund – 2005 Annual Report Page 1 FUND ADMINISTRATION Introduction On July 1, 1977, the Georgia General Assembly enacted legislation establishing the Subsequent Injury Trust Fund. It is designed to reduce the impact of singularly large workers' compensation claims in the event a worker with a disability, injured on the job, aggravates a pre-existing permanent impairment. The Subsequent Injury Trust Fund is a separate state agency, governed by a five- member Board of Trustees appointed by the Governor for six-year terms. The administrator along with a staff of 30 employees conducts the actual administration of the fund. How the Fund Works The fund helps workers with disabilities by providing employers, who are not subject to the Americans with Disabilities Act, with incentives to hire or retain qualified workers with disabilities. The fund supports insured employers by keeping workers' compensation premiums under control, and if an employer is self-insured, keeps the workers' compensation exposure at the deductible levels. In order for an employer/insurer to be eligible for reimbursement from the fund, the on- the-job injury of the employee must be directly caused by or combined with a prior impairment to create a greater liability for lost-time benefits and medical expenses. In addition, the employee must have a pre-existing impairment that the employer considered to be permanent and likely to be a hindrance to employment, and the employer must have knowledge of the prior impairment before the subsequent injury occurs. O.C.G.A.§34-9-361 contains a list of conditions that are presumed to be permanent and likely to be a hindrance to employment provided the employer could demonstrate prior knowledge. Reimbursement from the Fund All licensed workers' compensation insurance carriers and self-insured employers authorized by the State Board of Workers’ Compensation in the state of Georgia may access the fund. Employers/insurers must notify the fund of a possible claim by filing a Notice of Claim no later than 78 weeks following the date of injury. In addition to the mandatory Notice of Claim, the employer must submit a notarized Employer’s Knowledge Affidavit, certifying prior knowledge of the worker’s pre-existing permanent impairment. Employers/insurers may be reimbursed for all weekly income benefits payable after 104 weeks; for 50% of all medical and rehabilitation expenses between $5,000 and $10,000; and for 100% of all medical and rehabilitation expenses in excess of $10,000. Subsequent Injury Trust Fund – 2005 Annual Report Page 2 If the subsequent injury was not caused by or related to a prior impairment, the reimbursement for medical expenses may be reduced or denied completely. Claims Administration The employer/insurer maintains management of the employee’s claim for the life of that claim. Once the fund has been notified of the claim, the employer/insurer must keep the fund informed of all developments, including settlement negotiations. The fund investigates the claim to determine eligibility for reimbursement. When a reimbursement agreement is reached between the fund and the employer/insurer, it must be approved by the State Board of Workers' Compensation. If an agreement cannot be reached, either party may request a mediation conference or a hearing with the State Board of Workers' Compensation. Claims Activity – 2005 The following is a breakdown of claims activity for calendar year 2005. For information on prior years, please call (404) 206-6357 or visit our website at www.sitf.georgia.gov. Open Claims January 1, 2005 22,279 Claims Received Calendar Year 2005 16,777 Closed Claims Reopened Calendar Year 2005 882 Claims Closed Calendar Year 2005 18,375 Open Claims December 31, 2005 21,563 Claims Accepted Calendar Year 2005 1,481 Claims Denied Calendar Year 2005 89 Notices in Pending Calendar Year 2005 2,963 Subsequent Injury Trust Fund – 2005 Annual Report Page 3 Financial Activity - 2005 The following table depicts the fund’s revenues, expenditures, and fund balance for the calendar year ending December 31, 2005. The fund’s year-end balance is part of the formula for establishing the annual assessment. For information on prior years, please call (404) 206-6357 or visit our website at www.sitf.georgia.gov. Beginning Balance January 1, 2005 55,015,572 55,015,572 Revenues Assessments – 2004, adjusted assessments – 2003, and payments and refunds for prior years 124,677,764 Interest Earned 1,843,959 Miscellaneous Income 1,663 Total Revenues 126,523,386 Prior Year Adjustments (87,425) Expenditures Personnel Services 1,728,276 Operating Cost 630,174 Reimbursements (negotiated checks) 115,245,669 Total Expenditures 117,604,119 Fund Balance December 31, 2005 64,022,264 Subsequent Injury Trust Fund – 2005 Annual Report Page 4 New Legislation Through House Bill 200, the Official Code of Georgia was amended by adding Chapter 34-9-368 establishing June 30, 2006 as the last date of injury