State Accident Fund to cut budget by $1.46 million after claims system implementation; administered two first‑responder death benefits

The State Accident Fund told the Senate Finance subcommittee it will reduce its budget authorization for fiscal 2025–26 by $1,462,839 as the agency finishes implementing a new claims and billing system.

Erin Farthing, director of the State Accident Fund, said the fund provides workers’ compensation coverage for state agencies and optional coverage for other governmental entities. She said the State Accident Fund and the uninsured employers fund are entirely other‑funded: the State Accident Fund by premiums from policyholders and the uninsured employers fund by transfers from the Department of Insurance and the Workers’ Compensation Commission.

Farthing said the agency does not have carryforward authority for unexpended appropriations; unspent appropriated funds revert to their respective funds at year‑end and do not increase next‑year authorization. She said the budget reduction reflects the tail end of a multi‑year claims management implementation: the agency had increased authorization in prior years to pay for the project and now expects administrative spending to return to normal levels.

Farthing also provided an update on a newly created statutory first‑responder death benefit. The fund was asked to administer claims for people not covered by PEBA retirement plans or other policies and has processed two claims after the agency established procedures and coordinated with the attorney general’s office and the treasurer. Farthing said the benefit is statutorily mandated and typically is either $75,000 or $150,000 depending on circumstances; she said the agency worked with PEBA and other offices to process payments quickly.

Senator Garrett thanked the agency for rapid processing and noted the families’ need for assistance; the committee recorded no formal action.