S.C. Code Ann. § 42-9-400 – Manner in which employer or insurance carrier shall be reimbursed from Second Injury Fund when disability results from preexisting impairment and subsequent injury

(a) If an employee who has a permanent physical impairment from any cause or origin incurs a subsequent disability from injury by accident arising out of and in the course of his employment, resulting in compensation and medical payments liability or either, for disability that is substantially greater, by reason of the combined effects of the preexisting impairment and subsequent injury or by reason of the aggravation of the preexisting impairment, than that which would have resulted from the subsequent injury alone, the employer or his insurance carrier shall in the first instance pay all awards of compensation and medical benefits provided by this Title; but such employer or his insurance carrier shall be reimbursed from the Second Injury Fund as created by Section 42-7-310 for compensation and medical benefits in the following manner:
1. (1) Reimbursement of all compensation benefit payments payable subsequent to those payable for the first seventy-eight weeks following the injury.
2. (2) Reimbursement of fifty percent of medical payments in excess of three thousand dollars during the first seventy-eight weeks following the injury and then reimbursement of all medical benefit payments payable subsequent to the first seventy-eight weeks following the injury; provided, however, in order to obtain reimbursement for medical expense during the first seventy-eight weeks following the subsequent injury, an employer or carrier must establish that his liability for medical payments is substantially greater, by reason of the combined effects of the preexisting impairment and subsequent injury or by reason of the aggravation of the preexisting impairment, than that which would have resulted from the subsequent injury alone.
(b) If the subsequent injury of such an employee shall result in the death of the employee, and it shall be determined that the death would not have occurred except for such preexisting permanent physical impairment, the employer or his insurance carrier shall in the first instance pay the compensation prescribed by this Title; but he or his insurance carrier shall be reimbursed from the Second Injury Fund created by Section 42-7-310, for all compensation payable in excess of seventy-eight weeks.
(c) In order to qualify under this section for reimbursement from the Second Injury Fund, the employer must establish when claim is made for reimbursement thereunder, that the employer had knowledge of the permanent physical impairment at the time that the employee was hired, or at the time the employee was retained in employment after the employer acquired such knowledge. Provided, however, the employer may qualify for reimbursement hereunder upon proof that he did not have prior knowledge of the employee's preexisting physical impairment because the existence of such condition was concealed by the employee or was unknown to the employee.
(d) As used in this section, "permanent physical impairment" means any permanent condition, whether congenital or due to injury or disease, of such seriousness as to constitute a hindrance or obstacle to obtaining employment or to obtaining reemployment if the employee should become unemployed.
1. (1) Epilepsy
2. (2) Diabetes
3. (3) Cardiac disease
4. (4) Arthritis
5. (5) Amputated foot, leg, arm or hand
6. (6) Loss of sight of one or both eyes or partial loss of uncorrected vision of more than seventy-five percent bilateral
7. (7) Residual disability from Poliomyelitis
8. (8) Cerebral palsy
9. (9) Multiple sclerosis
10. (10) Parkinson's disease
11. (11) Cerebral vascular accident
12. (12) Tuberculosis
13. (13) Silicosis
14. (14) Psychoneurotic disability following treatment in a recognized medical or mental institution
15. (15) Hemophilia
16. (16) Chronic ostemyelitis
17. (17) Ankylosis of joints
18. (18) Hyperinsulinism
19. (19) Muscular dystrophy
20. (20) Arteriosclerosis
21. (21) Thrombophlebitis
22. (22) Varicose Veins
23. (23) Heavy metal poisoning
24. (24) Ionizing radiation injury
25. (25) Compressed air sequelae
26. (26) Ruptured intervertebral disc
27. (27) Hodgkins disease
28. (28) Brain damage
29. (29) Deafness
30. (30) Cancer
31. (31) Sickle-cell anemia
32. (32) Pulmonary disease
33. (33) Mental retardation provided the employee's intelligence quotient is such that he falls within the lowest percentile of the general population. However, it shall not be necessary for the employer to know the employee's actual intelligence quotient or actual relative ranking in relation to the intelligence quotient of the general population.
34. (34) Any other pre-existing disease, condition or impairment which is permanent in nature and which:
  1. (a) Would qualify for payment of weekly disability benefits of seventy-eight weeks or more under Section 42-9-30 exclusive of benefits payable for disfigurement; or
  2. (b) Would support a rating of seventy-eight or more weeks of weekly disability benefits when evaluated according to the standards applied to Workers' Compensation claims in South Carolina, or combines with a subsequent injury to cause a permanent impairment rated at seventy-eight weeks or more under Section 42-9-30.
When an employer establishes his prior knowledge of the permanent impairment, then there shall be a presumption that the condition is permanent and that a hindrance or obstacle to employment or reemployment exists when the condition is one of the following impairments:
(e) The Second Injury Fund shall not be bound as to any question of law or fact by reason of any compensation agreement, settlement, award, and adjudication to which it was not a party, or in relation to which it was not notified at least twenty days prior to a hearing on liability that it might be subject to liability for the injury or death.
(f) An employer or his carrier shall notify the Industrial Commission and the Director of the Second Injury Fund in writing of any possible claim against the fund as soon as practicable but in no event later than after the payment of the first seventy-eight weeks of compensation.
Failure to comply with the provisions of this subsection shall bar an employer or his carrier from recovery from the fund.
(g) If the employee has a permanent physical impairment, as defined in this section and the prerequisites for reimbursement have been met, and if it can be shown that the subsequent injury most probably would not have occurred "but for" the presence of the prior impairment, then reimbursement will be granted as provided in this section even if the combined effects or the aggravation of the preexisting condition by the subsequent injury does not cause the employer's liability for compensation and medical benefits to be substantially greater than that which would have resulted from the subsequent injury alone.
(h) When a third party is deemed to be an employer for the purposes of paying workers' compensation benefits that third party will be entitled to reimbursement from the Second Injury Fund if either he or the employer of record have met the knowledge requirements outlined in this section, as well as all other requirements.
(i) The Second Injury Fund is entitled to a credit for sums recovered by the employer or his workers' compensation carrier from third parties, after the employer or his workers' compensation carrier have been reimbursed for the moneys paid out by them and not reimbursed by the fund.
(j) The Second Injury Fund can enter into compromise settlements at the discretion of the director with approval of a majority of the Industrial Commission, provided a bona fide dispute exists.
(k) Any employer operating in violation of Section 42-5-20 is not eligible for reimbursement from the South Carolina Second Injury Fund.
(l) As a prerequisite to reimbursement from the fund, the insurer shall be required to certify that the medical and indemnity reserves have been reduced to the threshold limits of reimbursement.