September 15, 2025 | SIBTF.org — SIBTF reform is at the center of a new report from the Legislative Analyst’s Office (LAO), which warns that the Subsequent Injuries Benefits Trust Fund (SIBTF) has moved away from its original mission of helping workers with serious preexisting disabilities who sustain additional workplace injuries. Instead, the program has become more costly and, in the view of policymakers, overly generous.
The report emphasizes that SIBTF reform is not only a fiscal necessity but also a matter of fairness to injured workers and employers contributing to the fund. Lawmakers are increasingly concerned that unchecked growth in liabilities could weaken confidence in California’s workers’ compensation system, with billions already at stake. By drawing attention to the fund’s drift from its original intent, the LAO seeks to spark legislative action that balances financial sustainability with continued protection for the most vulnerable workers.
Key Recommendations from the LAO
- The LAO outlines several reforms aimed at restoring balance to the system. Among them are:
- Implementing stricter eligibility criteria for claimants with preexisting conditions.
- Requiring joint physician reviews to standardize medical evidence.
- Prioritizing backlogged claims for the most severely injured workers to reduce wait times.
These measures are intended to reduce costs while ensuring the program remains focused on workers most in need of support.
According to the LAO, these proposed changes to SIBTF reform would not only streamline the claims process but also improve consistency in how cases are evaluated across the state. By tightening eligibility and requiring joint medical reviews, policymakers aim to curb inconsistent awards and prevent the system from being strained by questionable claims. The focus, the report stresses, must remain on workers who face the greatest barriers to earning a livelihood due to combined disabilities.
Rising Costs Demand Policy Action
SIBTF liabilities have already exceeded $20 billion, raising alarms among lawmakers and stakeholders. Without significant reforms, the LAO warns, the program risks becoming financially unsustainable, undermining benefits for those it was designed to protect.
The rapid escalation of SIBTF liabilities has also placed pressure on employer assessments, which have risen sharply in recent years to cover the growing obligations. Business groups warn that without timely SIBTF reform, the mounting financial strain could ripple across California’s workers’ compensation system, ultimately affecting both employers and injured workers. Policymakers view immediate action as critical to preventing further instability and preserving the fund’s long-term viability.
Balancing Fairness with Sustainability
While some advocacy groups fear that stricter eligibility rules may limit access, policymakers argue that reform is necessary to keep the program viable. The LAO’s recommendations are expected to influence ongoing legislative debates, including discussions around AB 1329 SIBTF reforms.
Stakeholders on both sides acknowledge that SIBTF reform raises difficult trade-offs between protecting access to benefits and ensuring fiscal responsibility. Worker advocates caution that overly restrictive measures could discourage claims from legitimately injured employees, while legislators stress that without structural adjustments, the fund’s escalating costs could jeopardize benefits for everyone. The outcome of this debate will likely set the tone for how California balances equity and sustainability in its broader workers’ compensation policies.
For the full report, visit the Legislative Analyst’s Office.
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Read More from SIBTF.org:
- SIBTF Liabilities Soar Past $20 Billion: AB 1329 Seen as Partial Fix
- AB 1329 Tightens Standards: Proof of Preexisting Disability’s Impact Now Required
- Senate Committee Takes Up AB 1329 as SIBTF Costs Continue to Climb
FAQs: SIBTF Reform Recommendations
Why did the LAO issue recommendations for SIBTF?
The LAO concluded that SIBTF has become overly costly and generous, drifting from its original purpose of supporting workers with severe preexisting disabilities.
What are the main recommendations in the LAO report?
The report suggests stricter eligibility requirements, joint physician reviews, and prioritizing claim backlogs for the most seriously injured workers.
How do these recommendations affect ongoing reforms like AB 1329?
The LAO’s analysis complements AB 1329 but suggests that additional, broader reforms may be required to fully address the fund’s financial instability.
What risk does SIBTF face without reform?
Without significant changes, unpaid liabilities could continue to grow, jeopardizing the fund’s ability to provide future benefits.
What is SIBTF?
The Subsequent Injuries Benefits Trust Fund (SIBTF) helps California workers who suffer a new workplace injury and already had a prior disability. It offers supplemental compensation when combined impairments severely limit earning capacity.