MLAC hears Workers’ Benefit Fund status update; $14.68 million transfer noted, future rate rises flagged

The Workers’ Compensation Management-Labor Advisory Committee reviewed the Workers’ Benefit Fund (WBF) status update on April 2, 2026, during a virtual meeting of the committee. Senior economist Kelli Borushko presented the 2025 WBF forecast and explained that the dotted forecast line on the slide represents a level below the four-quarter-expenditure threshold rather than a projected negative fund balance.

Borushko and Director Sean O’Day told the committee that a $14.68 million transfer was made and that the division is managing the fund to draw down excess reserves accumulated during the pandemic era. Borushko said the transfer “did impact the fund balance” but told members it did not bring the fund close to the four-quarter minimum required for operations. O’Day added that DCBS intentionally lowered the contribution rate in recent years to spend down excess balances and that a stable long-run target rate of about 2 cents per hour would better match expected expenditures.

Committee co-chair Patrick Priest pressed officials on whether the cumulative withdrawals (roughly $30 million over two cycles) create a structural gap requiring either revenue increases or expense reductions by 2031. Borushko replied that while the transfer affects the balance, the larger driver is the rate reduction that lowers revenue by roughly $6.5 million per year for each two-tenths of a cent change. She confirmed a two-tenths-cent change yields about $6.5 million annually and $12–13 million per biennium.

Members requested additional analyses to inform future rate-setting: an inflation-adjusted cents-per-hour historical comparison and a clearer presentation of projected total hours worked (the assessment base). Co-chair Scott Strickland suggested the inflation adjustment would show a sharper real decline in contributions over time; Director O’Day and Borushko said hours-worked projections are already part of DCBS’s methodology and that final rate decisions will be made closer to the rate-setting period based on the most recent economic data. The division said it is operating at an approximate $6 million annual deficit now as a deliberate measure to draw down excess reserves, and that any future rate change is dependent on updated analysis and economic conditions.

The committee did not take formal action or a vote during the meeting; staff said any future rate adjustments would be reflected in the formal rate-setting process and, if necessary, could require legislative action for transfers tied to other assessments.