President's workers' comp proposals would save 'more than $500 million'
The president's budget proposal for FY 2014 directly targets the Federal Employees' Compensation Act and the Defense Base Act.
FECA covers federal civilian employees while DBA covers federal contract employees working overseas on military bases and public work projects. All told, the reforms would save more than $500 million over 10 years, according to the proposal. Additionally, the changes would "improve the operation of these programs for workers and families who suffer injuries and fatalities in the line of duty."
"FECA benefits typically exceed federal retirement benefits, which creates an incentive for beneficiaries to remain on FECA beyond their normal retirement age," the proposal states. "In addition, while state workers' compensation systems have waiting periods for benefits to discourage less serious claims, FECA has a three-day waiting period for non-Postal employees that is imposed too late in the claims process to be effective."
The proposal would amend FECA to convert future retirement-age beneficiaries to a retirement annuity-level benefit. It would also impose an upfront waiting period for benefits for all beneficiaries.
Additional provisions include:
- Allow the Department of Labor, which oversees the programs, to recapture compensation costs from responsible third parties.
- Give DOL additional tools to reduce improper payments.
- Make other changes to improve the program.
The proposed changes are based on "longstanding recommendations from the Government Accountability Office, the Congressional Budget Office, and DOL's Inspector General, as well as numerous Securing Americans Value and Efficiency Award nominations."
The DBA caseload has increased by nearly 2,600 percent since 2002. "The growth in federal contractors working overseas has brought into sharp focus the need for a more efficient approach to the DBA," the proposal says. "The budget proposes a new government-wide fund to replace the patchwork of contract coverage now in effect under DBA."
There have increasingly been a number of administrative challenges, according to the proposal. For example, there are difficulties in obtaining necessary documentation from foreign workers and delays in processing cases originating from war zones. "In addition, under the program's current structure, the costs of DBA insurance -- which agencies pay through individual contracts -- exceed actual benefits by a significant margin," the proposal says. "Over the past several years, DOL, the Department of Defense, the Department of State, and the U.S. Agency for International Development have been working closely together to reform and improve the operation of the program and the budget reflects the culmination of those collaborative efforts."
The proposal "would replace the current DBA program with a new government-wide benefit program, modeled on FECA, under which benefits would be paid directly from a federal fund administered by DOL and agencies would be billed only for their share of benefits and administrative costs."
Read more at the WorkersComp Forum homepage.
May 21, 2013
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