- Background
Established in 1945, the SIBTF provides additional worker’s compensation benefits when workers with a preexisting injury or disability suffer another injury at work that results in permanent disability. The program provides a key social safety net that helps disabled workers live independent, dignified lives while remaining productive members of society. These benefits are funded through a payroll surcharge levied on all employers in the state: employers cover compensation for the later injury, while SIBTF provides support for the additional disability resulting from the cumulative effects. From 2010 to 2022, SIBTF paid out over $975 million, including $631 million paid directly to workers. Today, almost every state has a similar fund.
The Problem
Despite its effectiveness in supporting workers across California, the SIBTF faces significant financial challenges that threaten its stability in coming years. A recent report published by RAND Corporation estimated that the total liability for claims made against the fund from 2010 to 2022 is at least $7.9 billion, while the SIBTF only collected $488 million from employer payroll assessments in 2024. The sharp rise in claims is attributable to a mix of factors, including legislative changes that have made it easier for worker’s compensation awards to form the basis for qualifying for SIBTF benefits, the lack of a firm statute of limitations for SIBTF claims, and a continued rise in chronic health conditions. Without reform, it will be unavoidable to implement substantial increases in employer assessments to ensure that future SIBTF liabilities are covered.
Ideas for Reform
CCIW members have significant, expansive experience in evaluating applicants seeking SIBTF benefits. We welcome the opportunity to share our insight and suggestions to improve the SIBTF for all parties affected. CCIW has identified several ways in which the SIBTF could be adjusted to maintain solvency while ensuring continued robust support for injured workers, including:
- Updating the statute governing SIBTF eligibility to better define qualifying preexisting disabilities, with an emphasis on clarity and consistency in the evidentiary standards required to support a claim.
- Requiring Qualifying Medical Evaluations for SIBTF claims, adopting the system already used in California for general workers’ compensation claims, to reduce “doctor shopping” practices that increase the state’s liability
- Establishing a medical records clearinghouse, which would streamline the SIBTF claim process by controlling the page counts of the medical records used
- Requiring that medical records submitted be received at least 8 business days before claim evaluation
- Adopting legislation that would exclude an injured worker’s future earning capacity from consideration, as these adjustments drive up the number of eligible applicants
- Adjusting the statute of limitations for SIBTF claims, ideally to 5 years from the date of the subsequent industrial injury, or 2 years from the date of settlement
- Clarifying statutory language to provide that the 35% and 5% opposite and corresponding thresholds are before apportionment
- Implementing new requirements to ensure that injured workers receive notification about available SIBTF benefits
Our Commitment: We recognize the critical role that legislators and the administration play in shaping a benefits system that is both sustainable and just. Our group is committed to working in partnership with lawmakers and other key stakeholders to craft pragmatic, forward-looking reforms that preserve access for injured workers while ensuring long-term fiscal stability. Through constructive dialogue and shared problem-solving, we aim to support legislative efforts that strengthen the program’s integrity, promote transparency, and reflect the evolving realities of California’s workforce and economy.
