More Claims, Broader Coverage: How Two Iowa Cases Reshaped the Second Injury Fund

The Second Injury Fund (“SIF”) has been a staple of Iowa workers’ compensation law for decades. Developed in the wake of World War II, it incentivized employers to hire disabled employees by limiting the amount of liability they would incur in the event that employee became injured at work. If an employee has a pre-existing disability that affects a scheduled body part—which, in Iowa, includes arms, hands, legs, feet, and eyes—and then suffers a work injury that combines with the first disability to create a greater level of impairment, the employer is only liable for the compensation attributable to the work injury itself. The SIF pays the additional compensation resulting from the combined disabilities. 

Historically, Iowa courts held that a workplace accident had to result in a scheduled injury before the SIF would pay any additional compensation for a combined disability. If a workplace accident resulted in an unscheduled injury—which, in Iowa, is defined as an injury to a body part or organ other than those explicitly listed as scheduled—the SIF was not liable for any additional payments. Two recent cases, however, have resulted in significant changes to this framework—and have drastically increased the amount of claims that are eligible for reimbursement from the SIF. 

In Delaney v. Second Injury Fund of Iowa, decided by the Supreme Court of Iowa on 5/10/2024, the Court held that an employee who sustained an injury to her vascular system was nonetheless potentially eligible for benefits from the SIF. Delaney, 6 N.W.3d 714, 719 (Iowa 2024). Injuries to the vascular system are considered unscheduled by the Iowa Workers’ Compensation Commission; however, in this case, the injury to the vascular system was a lymphedema in the workers’ right leg. Id. at 718. Since the vascular system injury was localized to a scheduled body part, the Court held that it was sufficient to entitle the claimant to SIF benefits, specifically stating that “an injury to a bodily system may result only in localized loss to use of a scheduled member” and thus trigger eligibility for SIF benefits. Id. at 720. On 12/13/2024, the Court doubled down on this decision in Strable v. Second Injury Fund, specifically stating that the SIF’s liability depends on the specific parts of the body that are permanently injured in subsequent injuries—and not on “how they are compensated.” Strable, 14 N.W. 3d 742, 748.

As a result of this, the landscape of SIF liability looks very different in 2026. Now, any injury to an arm, hand, leg, eye, foot, or eye can trigger SIF liability if the injured employee has a qualifying pre-existing disability. Given the burden this could potentially impose upon the SIF, a state-run organization with limited funds, it is possible that future legislation could change this. For now, employees with pre-existing disabilities have more avenues to receive compensation for their injuries than ever before.