April 23, 2025 | MedLegalNews.com — California lawmakers are advancing Assembly Bill 1329 (Ortega) to confront the mounting challenges facing the Subsequent Injuries Benefits Trust Fund (SIBTF). With costs skyrocketing and inconsistent standards driving litigation, the bill aims to strengthen oversight, tighten eligibility rules, and ensure the Fund’s future viability.
Why SIBTF Needs Urgent Reform
Between 2010 and 2022, annual SIBTF payouts jumped from $13.6 million to $232 million. In 2024, a RAND Corporation study commissioned by the Department of Industrial Relations (DIR) projected that recent claims could saddle the Fund with $7.9 billion in future liabilities.
Lawmakers point to vague statutory language, questionable disability ratings, and a lack of standard procedures as major drivers of this fiscal crisis.
Without swift legislative action, the Fund risks becoming unsustainable—threatening support for genuinely disabled workers and creating uncertainty for employers.
How AB 1329 Changes the Game
AB 1329 delivers a suite of targeted reforms to restore fairness, credibility, and financial discipline to the SIBTF process:
- Clarifying What Qualifies as a Pre-Existing Disability
To receive benefits, applicants must now demonstrate that their prior disability actually impaired their ability to work or perform daily activities, with substantial evidence like medical records or sworn testimony from before the new injury.
This helps filter out opportunistic claims while safeguarding access for truly impacted workers.
- Ending “Evaluator Shopping” with QME Oversight
Previously, injured workers could handpick medical evaluators, often leading to inflated assessments. AB 1329 requires all evaluations to go through Qualified Medical Evaluators (QMEs) selected via the existing DWC panel system.
DIR is also directed to create a specialized QME list for SIBTF cases, improving expertise and consistency.
- Standardizing Permanent Disability Ratings
The bill eliminates confusion over how permanent disabilities should be rated:
For injuries between 2005 and 2013, ratings must reflect diminished future earning capacity (DFEC).
For injuries after January 1, 2013, the formula includes a 1.4 multiplier per existing law.
These changes codify case law and reduce disputes over rating methodology.
- Centralizing Administration Under DIR
Rather than funneling benefits through the State Compensation Insurance Fund, AB 1329 shifts responsibility directly to the DIR.
This change eliminates redundant reimbursements, shortens delays, and improves administrative efficiency.
What It Means for Employers and Workers
For employers, AB 1329 could reduce SIBTF assessments by 20–25%, easing the cost of hiring individuals with prior disabilities and encouraging workforce inclusivity.
The bill preserves long-term access to benefits for injured workers while reinforcing due process. The reforms prioritize fairness by requiring evidence-based evaluations and preventing system abuse.
Support and Skepticism from Stakeholders
Supporters—including labor advocates and public agencies—say the bill takes a decisive step toward restoring trust in the system. They praise its focus on transparency, fraud prevention, and fiscal accountability.
Still, some business groups, like the California Chamber of Commerce, believe more expansive reforms are needed to address RAND’s recommendations fully.
The Road Ahead
AB 1329 passed its initial hearing in the Assembly Insurance Committee on April 23, 2025, and is now moving through the legislative process. If enacted, it could reshape how California handles subsequent injury claims and help preserve a crucial safety net for injured workers.
Assembly Bill Policy Committee Analysis