What if an injured worker in Pennsylvanian is employed by a company who (in direct violation of PA law) fails to carry workers’ compensation insurance? Back in the old days, the injured worker, through no fault of his or her own, would be stuck with whatever assets the employer had. However, in recognizing the pure unfairness of such a situation, several years ago, the Pennsylvania legislature created the Uninsured Employers’ Guaranty Fund (UEGF), essentially functioning as an insurer for the uninsured employers.
While the UEGF is wonderful in theory, it is less so in practice. Funding for the UEGF comes from other insurance carriers, and it is seemingly consistently underfunded. The law holds that the UEGF is NOT an insurance carrier, so it cannot be penalized for violations of the Pennsylvania Workers’ Compensation Act (Act), including the failure to pay an award as ordered by a Workers’ Compensation Judge (WCJ). This makes collecting an award from the UEGF a delicate and diplomatic process.
In the past several years, to protect the limited funds of the UEGF, the PA legislature has tightened the requirements to obtain an award against the UEGF, and made such litigation much more difficult. Timeframes have been drastically shortened and requirements of proof have been significantly increased.
Perhaps the change most impacting an injured worker is the time within which notice must be provided to the UEGF. Initially, the law was that the UEGF was not required to pay benefits until a Notice of Claim was filed. This was fair and made sense. Unfortunately, despite PA courts universally discussing the “humanitarian objectives” of the Act, the law is now that a Notice of Claim must be filed within 45 days of when the injured worker knew the employer failed to carry workers’ comp insurance. If the Notice of Claim is not filed within that time, the claim is entirely barred. Once the Notice of Claim is filed, there are additional time constraints to file the actual Claim Petition against the UEGF.
Recently, the Commonwealth Court of Pennsylvania issued an unreported decision in Swierbinski v. Scranton Restaurant Supply and Uninsured Employers Guaranty Fund (Workers’ Compensation Appeal Board), which dealt with this 45-day limit on filing a Notice of Claim against the UEGF. While the facts are limited to the specific situation in that case (prior to the effective date of the legislative changes to the UEGF rules, the uninsured employer paid “wage in lieu of compensation,” which made the injured worker in that case able to still proceed under the old rule), this case does make clear that the 45 day limit is unavoidable and a complete bar to benefits (after the effective date of the UEGF changes, back in 2018).
We do always try to provide a take-away from our blog entries. As in, what should you get out of this? The UEGF is a minefield which should only be traversed by an experienced workers’ compensation attorney.