The Difficulties in Handling Cases Against the PA Uninsured Employers Guaranty Fund
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.