Federal government seeks to take workers' comp off 'autopilot'

As many state legislatures are looking at ways to revamp their workers' comp systems, a similar move is afoot at the federal level. Earlier this month a congressional committee passed legislation to overhaul the federal workers' comp program -- the first such action in nearly 40 years.

Meanwhile, the Government Accountability Office has been asked to conduct the second investigation into the federal program this year.

The Federal Employees' Compensation Act of 1916 established the program that now covers an estimated 3 million federal employees. Under the tutelage of the Department of Labor, the system doled out nearly $3 billion in benefits during the last fiscal year.

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Supporters of the reform effort say waste and inefficiencies have taken over the program. Examples they cite include:

More than 1,000 employees at the U.S. Postal Service alone currently receive benefits even though they are 80 years of age or older and have no intention of returning to work, according to Sen. Susan M. Collins, R-Maine.
A lack of benefit caps and requirements for regular third-party certifications of continued need has led to some beneficiaries getting more from workers' comp than they would through the federal retirement system, Collins said.
Cases where employees can receive compensation in excess of their total wages, "creating a strong disincentive for those employees to return to work," said Rep. Tim Walberg, R-Mich.

Following a recent hearing by Walberg's Subcommittee on Workforce Protections, the House Committee on Education and the Workforce unanimously passed H.R. 2465, the Federal Workers' Compensation Modernization and Improvement Act. Proponents say the measure would encourage best practices in medical treatment and developments, grant greater authority to the DOL to verify the earnings of workers using Social Security records, modernize the benefits workers receive, streamline the claims process for workers who sustain traumatic injuries in designated zones of armed conflict, and increase benefits for funeral expenses.

Committee Chairman John Kline, R-Minn., said government programs can no longer be left on "autopilot." He and Walberg were among four sponsors of the legislation who also have asked for a GAO study of the program.

In a letter this month, the sponsors asked the agency to examine key questions associated with provisions included in draft reforms proposed by the DOL. Earlier this year, Sen. Collins asked the GAO to conduct a thorough review of the FECA program with an eye toward fraud and abuse.

Read more at the WorkersComp Forum homepage.

July 21, 2011

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