Workers' Compensation

FECA Reform Proposals

A Second Congressional Hearing Provides More Details on a Framework for Legislation

The Subcommittee on Workforce Protections, Committee on Education and the Workforce, U.S. House of Representatives, held a hearing on May 12, 2011, about updating and reforming the Federal Employees' Compensation Act (FECA) to address various concerns, including that older injured workers currently receiving FECA benefits at retirement age receive unintended incentives to continue receiving FECA benefits instead of traditional federal retirement benefits (through two retirement systems). The witness testimony is summarized below:

Daniel Bertoni, Director, Education, Workforce, and Income Security Issues, U.S. Government Accountability Office, provided details about a 1996 report from the GAO which proposed two changes to FECA at retirement age: (1) converting FECA benefits to retirement benefits; and (2) changing FECA wage loss benefits by creating a new FECA annuity. Bertoni provided a framework for legislators to consider when crafting legislation to change FECA for older workers (i.e., consider how benefits would be computed, which beneficiaries would be affected, what criteria would be used to initiate changed benefits, how other FECA benefits would be treated and administered, and how benefits would be funded). Bertoni concluded by suggesting that legislators consider the implications of changing FECA on beneficiaries and federal agencies.

Susan M. Carney, Director, Human Relations Department, American Postal Workers Union, AFL-CIO, testified about potential changes to FECA and about the proposed Federal Injured Employees Re-employment Act, from the union's perspective. She stated the union's belief that certain aspects of both statutes, if adopted as written, would negatively impact public servants and their families. She described some of the problems with the current FECA procedures, including finding and keeping treating doctors, reduction of contributions to retirement plans during disability periods, some adversarial aspects, and job offers that may not be suitable. She then testified about the union's position (including objections) on various proposals, including proposals for vocational rehabilitation, assisted re-employment programs, reduced disability payments at retirement age, payments into federal retirement systems, injured workers with and without dependents, calculating scheduled permanent impairment awards using set pay level instead of the injured worker's actual pay level, definition of new claims for disability, three-day waiting period for benefits, burial expenses, sanction for non-cooperation with nurses, and compensation for foreign nationals. She suggested that a more accurate method to rate permanent impairment was to use the AMA Guides, 5th Edition, instead of the latest edition of the AMA Guides. Finally, Ms. Carney recommended that OWCP continue to administer FECA with the goal of being a model workers' compensation program rather than to imitate insufficient state workers' compensation systems. She also recommended that OWCP hire more claims examiners and give the claims examiners more training, including on appellate level decisions interpreting FECA.

Elliot P. Lewis, Assistant Inspector General for Audit, Office of the Inspector General, U.S. Department of Labor, first gave background about FECA, including the initial funding of benefits and later charge backs reimbursing the fund by the agency which employed the injured worker who received FECA benefits. He supported changes to FECA, including having a three-day waiting period before an injured worker receives continuation of pay benefits, changing benefit payments beyond federal or Social Security retirement age, and giving FECA administrators access to federal databases to assist in detecting fraud. With regard to DOL's proposal to set a 70 percent level of benefits for all claimants regardless of whether they have dependents, Lewis pointed out the challenges of obtaining documentation of dependents. Lewis also pointed out the results of an audit that showed lax monitoring of cases by claims adjusters and the need to improve return to work processes and incentives.

Gary Steinberg, Acting Director, Office of Workers' Compensation Programs, U.S. Department of Labor, detailed the proposals to make amendments to FECA in three categories: (1) return to work and rehabilitation, in which participation in vocational rehabilitation would be required of injured workers as early as six months after injury, among other things; (2) updating benefit structures, including eliminating the disparity in schedule awards for employees based on their salaries, and allowing injured workers to receive schedule award benefits in lump sums concurrently with wage loss benefits, among other things; and (3) modernizing and improving FECA, including implementation of a three-day waiting period after a work-related injury for all covered employees, amending subrogation provisions, matching Social Security wage data with FECA files, and improving access to medical care, among other things.

Scott Szymendera, Analyst in Disability Policy, Congressional Research Service, testified about the origins of workers' compensation systems in the United States and the details of some of the state systems. He also discussed the original intent of Congress in creating FECA (to maintain a workers' compensation system for federal employees that is consistent with principles of workers' compensation in the U.S. for a century and to bring the federal system in line with systems of the majority of the states as of 1916). He described the creation of FECA in 1916 legislation and subsequent amendments in 1949, 1960, 1966, and 1974. He noted recent updates to statutes for waiting periods for postal workers and death gratuities for federal civilian workers who died overseas in hostile areas. Finally, he described details of the current FECA programs and procedures, including statutes and regulations, financing, coverage of employees, conditions for coverage, claims processes, time limits to file claims, and available benefits.

View the hearings and access the witness statements:
"Reviewing Workers' Compensation for Federal Employees".

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