RAND Estimates $7.9B SIBTF Liabilities: A RAND Corporation report estimates that the Subsequent Injuries Benefits Trust Fund (SIBTF) carries a staggering $7.9 billion in liabilities, with the potential to climb as high as $10.5 billion. This estimate, based on a 12-year review of claims, highlights the growing financial strain on California employers who fund the program through assessments.
Alarming Growth in SIBTF Liabilities
RAND’s analysis revealed a significant increase in SIBTF payments, jumping from $13.6 million in 2010 to $232 million by 2022. Despite these rising costs, the estimate does not account for claims filed since May 2023, which add 2,000 to 2,500 cases annually. Without intervention, these growing liabilities threaten to overwhelm the system and further escalate costs for employers. RAND Estimates $7.9B SIBTF Liabilities
Factors Driving Higher Liabilities
Several factors contribute to the escalating liabilities:
- Increased claim volumes with little oversight.
- Settlements leveraged by applicant and defense counsel without adequate regulation.
- Administrative inefficiencies in evaluating claims and managing the program.
Unless policymakers introduce meaningful reforms, SIBTF costs will continue rising, resulting in higher assessments and financial burdens on employers.
Implications for Employers and the System
The mounting liabilities not only increase employer assessments but also signal potential insolvency for the SIBTF system if corrective actions are delayed. Employers face a 13.3% increase in assessments to cover growing costs, with DIR collecting $488 million from all payers to fund the program and establish reserves.
RAND’s Call for Urgent Reforms
RAND’s report emphasizes the need for structural reforms to contain costs and manage SIBTF liabilities effectively. Without decisive policy changes, the system risks becoming unsustainable, jeopardizing its ability to support injured workers with pre-existing disabilities.
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