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The definition of injury under the Act, 33 U.S.C. 902(2), includes both primary injuries which arise out of and in the course of employment and secondary injuries which are the natural or unavoidable result of the primary injury.
The Special Fund (also known as the Second Injury Fund) pays certain types of claims and expenses authorized by the LHWCA. Claims are paid by the Special Fund only upon application by an authorized insurance carrier or self-insured employer or by Order of the District Director or Administrative Law Judge.
Second-injury funds collect assessments on employers and carriers. They generally pay the difference in health and disability benefits costs between a workplace injury incurred by a healthy employee and the added cost resulting from a pre-existing condition.
The concept behind the Fund is to encourage employers to hire disabled workers by limiting, in the case of further injury, their liability for compensation pay- ments to amounts applicable to the latest injury. The Fund assumes liability for any remaining continuing benefits.
The Fund used to be called the 2% Fund because the surcharge was originally set at 2%. Now the surcharge is 6.76% (as of January 1, 2013). Practitioners use the terms Second Injury Fund and 2% Fund interchangeably.
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