JUNEAU – The Alaska Senate moved Friday to better ensure injured workers receive timely benefits payments with the passage of Senate Bill 183 by a vote of 17 to 1. Sponsored by the Senate Labor and Commerce Committee, the bill would allow the Workers’ Compensation Benefits Guarantee Fund to retain its fiscal year-end balance to be available for benefits payments the following year.  

“It is unacceptable that injured workers must wait months to receive benefits from the Fund to cover medical costs and lost wages,” said Senator Jesse Bjorkman, Chair of the Senate Labor and Commerce Committee. “SB 183 changes how the year-end balance is managed to ensure that there are funds available to make the timely payments to workers in need.”

The Legislature created the Fund in 2005 to pay the benefits due employees under the Alaska Workers’ Compensation Act when their employer is uninsured and fails to pay their claim. The Fund is seeded with civil penalties assessed against uninsured employers and any reimbursements the State is able to recover from employers for claims paid from the Fund. 

The timing of inflowing revenues and outflowing payments may not align, sometimes leaving the Fund empty when benefit claims are submitted. Through careful management, the Fund had been built to a sufficient balance prior to FY21 such that it was able to make timely payments to injured employees. Unfortunately, this many-year effort was nullified when year-end sweeps started sending the Fund’s balance to the State’s General Fund. SB 183 would better ensure timely payment of workers’ compensation claims benefits by making the Fund no longer subject to the sweep provision in Article IX, Section 17 of the Alaska Constitution. 

“While the Constitutional sweep provision is intended to help maintain Alaska’s long term fiscal stability, including the Workers’ Compensation Benefits Guarantee Fund in the sweep can have significant impacts to the intended beneficiaries of the Fund while providing minimal benefit for the State’s savings account,” said Senator Bjorkman. 

Senate Bill 183 now goes to the House for consideration.

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