Billions in Liabilities
February 11, 2025 – Rising SIBTF Costs: California employers are facing an estimated $7.9 billion in liabilities under the Subsequent Injuries Benefits Trust Fund (SIBTF) program, according to a new Rand Corporation report. The study, based on a 12-year claims review, estimates costs between $6.4 billion and $10.5 billion. These figures do not include claims filed since May 2023, which add 2,000 to 2,500 new cases annually.
Escalating Costs and Employer Concerns
The report, commissioned by the Department of Industrial Relations (DIR) and obtained by Workers’ Comp Executive through a Public Records Act request, highlights a dramatic rise in SIBTF payments. Costs surged from $13.6 million in 2010 to $232 million in 2022. The DIR acknowledged the findings, stating that they are studying the report to ensure the program remains sustainable and fair while recognizing its impact on workers’ compensation premiums. Rising SIBTF Costs
Employers argue that the SIBTF has become a settlement tool, with costs spiraling due to a lack of regulatory oversight. Unlike other parts of the workers’ compensation system, the SIBTF does not have controls on medical-legal evaluations or copy service expenses.
Consequences of Inaction
Rand’s report warns that maintaining the status quo will lead to significant financial consequences. Without intervention, employer assessments will continue to rise to cover liabilities and administrative expenses. The latest assessment included a 13.3% increase from the previous year, requiring $488 million from employers, with $168 million set aside as a reserve.
Potential Reforms and Trade-offs
Possible reforms include tightening eligibility requirements and increasing program oversight. While these changes could lower future costs, they would also raise administrative expenses and limit access for some applicants. The report underscores the difficult choices facing policymakers: “Inaction is, in effect, a choice to maintain a status quo, one with growing financial implications for employers in the state.”
For more information, visit SIBTF.org.
Author: Jonathan Forbes
Directory Developer, SIBTF.org