Workers’ compensation claims for U.S. federal employees, some contractors, and volunteers are out of control. Some employees have been on compensation for years while others are receiving money they don’t deserve because their injuries have healed. Something must be done. This blog post includes my experiences with the issues and control measures bringing this program under control.
These people are covered by the Federal Employees’ Compensation Act (FECA), Title 5 Part III, Subpart G, Chapter 81, Subchapter I. The requirements for this program are further codified in 20 Code of Federal Regulations, Part 1-199. The FECA provides workers’ compensation coverage to three million Federal and Postal workers including wage replacement, medical and vocational rehabilitation benefits for work-related injury and occupational disease (FECA, 2008).
The federal employee must file a claim for injury or illness. Once the claim is approved the compensated recipient’s medical expenses are paid in full, while income compensation is at 66.67% of gross wages for employees with no dependents, and 75% for those with dependents (Injury Compensation for Federal Employees, 2007).
Each federal agency relies on the Department of Labor (DOL) to administer the FECA program but incurs the costs of its own workers’ compensation recipients. Agencies provide the DOL with detailed information about compensation recipients. The DOL then processes the claims and bills the agencies quarterly for reimbursement through the use of “charge back” reports.
The FECA also includes Scheduled Awards. These are awards paid to a worker due to loss of eyesight, lost use of a body part, lost body part, or loss of life. DOL pays a predetermined amount and bills back the agency. For the loss of life, an award can be paid as well as monthly payments to eligible dependents. This usually includes an unmarried spouse and children under 18 years of age.
Even though the program is managed by DOL, the agency must take action to keep the program efficiently run (Fanning, 2010). The agency develops injury and illnesses prevention as well as workers’ compensation training for all supervisors. Good training can equip supervisors with tools to resolve the issues, especially returning the compensated recipient to work.
There are a number of complications within the realm of workers’ compensation including (Fanning, 2010):
- Third party involvement in injuries or deaths;
- Deceased compensation recipients who continue to receive benefits;
- Surviving spouses of deceased compensation beneficiaries who have remarried and are no longer eligible for benefits, but still receiving them;
- Missing medical documentation needed to determine if an employee can return to work;
- Compensated recipients working a job while receiving benefits;
- Return to work of able-bodied compensated recipients; and
- Investigation of fraud.
- Claimants not returned to work when able.
Third party involvement is best described as a third individual that caused or contributed to the injury or illness. The best example is a federal sector survey taker that is hit by a car while crossing the street. If the survey taker correctly used the crosswalk, the driver should pay all or part of the compensation. Most times this involves taking the driver to court, which must be initiated by the federal sector survey taker. To control third party involvement, the agency must notify the solicitor general of the DOL. This forces the solicitor general to work with the compensated recipient to take action against third parties involved in the accident. It may sound odd to some that the solicitor general will not take this action without being asked by the agency.
To control payments when a compensated recipient has died requires the agency to periodically check to ensure the compensated recipient is alive. This can be done by checking the Social Security Death Rolls. When the agency identifies a compensated recipient that has died, they must notify the DOL to stop payments. Financial institutions or individuals with improper payments must return the money.
Controlling the payments to surviving spouses and children is another area that must be addressed. Spouses receive payments as long as they do not remarry under the age of 55. After that, the spouse may continue to receive payments and marry. This is a more delicate situation. It requires periodically checking on the spouse to determine if they have remarried. If the spouse has remarried under age 55, the agency must notify DOL to stop payments.
The children are eligible for compensation until they are 18 years of age or 24 years of age when they remain in school. Simply tracking the age of children can let agency staff know when to notify the DOL to check on the status of the children.
To obtain missing medical documentation, the agency must send a benefits specialist to the DOL regional offices to review the files of compensated recipients to identify missing documents. There is no single location of claims paperwork. This requires traveling to each of the six DOL regional offices. The agency must then notify DOL that the documents are missing and ask them to undertake the appropriate exams and appointments to obtain the proper paperwork. Appropriate and complete paperwork is absolutely necessary so that an informed decision can be made about a compensated recipient’s ability to return to work.
There is fraud in the system. By staying on top of the entire compensation process, potential fraud can be identified. If and when fraud is spotted, the agency must ask the solicitor general of the DOL to investigate. The DOL has final say in all fraud cases.
Returning compensation recipients is messy and must be done to control the cost of compensation. Most Occupational Safety and Health (OHS) Offices have a database of claims that allows them to track the expenses associated with compensation; however, this database is normally not adequate to conduct the analysis needed to return compensation recipients to work (Ankel, et al., 2006). For that, the OHS office must first acquire or develop a single user-friendly database of the pool of compensated recipients who are on permanent leave. This database should include the following parameters for each compensation recipient listed in the original database:
- Likelihood of return to work, given what is known about the compensation recipient;
- The estimated work capacity (percent of full-time labor) that would be expected if the compensated recipient returns to work;
- Categories of necessary adjustments to the work environment,g. work at home, special equipment, restriction on hours;
- Salary level; and
- Expected duration of employment.
The compensated recipient who best meets these parameters becomes the target group for a return to work. Once the target group has been identified the OHS office should work with human resources, supervisors, legal staff, and budget officers to develop strategies and methods to bring these compensated recipients back to work. The consequences of these actions will then serve as valuable feedback to help improve the database, develop a reproducible methodology, improve identification of the target group, and improve the strategies and methods used to return compensated recipients to work (Ankel, et al., 2006).
The return to work processes can be improved through more and better communication that leads to greater understanding among: the physicians responsible for treating compensated injuries or illnesses, the offices within the employer organization that process workers’ compensation paperwork, the specific work site where the injury occurred, and where the work site that the compensation recipient is likely to return. Supervisors must know the compensation recipient’s ability to perform the “essential functions” of his or her job. To do this, the supervisor must know the physical and mental condition of the compensation recipient following the illness or injury. This calls for collaboration between the physician and supervisor, during which the full knowledge of the workplace and the compensation recipient’s physical state can be known and assessed with the intent of developing a plan for the recipient’s future return to work.
There is usually some form of work that the compensated recipient can resume that he or she is physically capable of doing. Physicians need to understand the employee’s job function and explore the possibilities of modified duties. Likewise, supervisors should have some sense, from the medical community, whether light or modified duties would be feasible for the employee, and if so, they should establish them. This will enable the employee to return soon and with a positive perspective on returning to work (LRP, 2005). Some disabilities may require workplace adjustments or “job site modifications” before a compensated recipient can return to work. These typically fall into three categories (LRP, 2005):
- Site adjustment – changing the layout of the work area;
- Job restructuring – changing the employee work hours, adding rest periods, to his daily schedule, having him trade jobs with other workers, or limiting or modifying duties; and
- Ergonomic tools – modified hand tools equipment and appliances designed with ergonomic in mind.
For obvious reasons, employers have a greater interest in returning high paid compensated recipients to work than low paid recipients. Employers are also more interested in returning compensated recipients who can work at full, or near full capacity, instead of a one whose work hours would be substantially less than full time. The reason is basic economics.
Once it is known which compensated recipients will return to work, jobs must be identified and approved human resources and legal staff. The compensated recipient must be given an official job offer. If and when the compensated recipient accepts the offer, they return to work and receive a paycheck. Compensation is stopped.
Hopefully, the compensated recipient can be returned to his or her previous position. If this cannot be done, they must be offered a position they qualify for with equal pay and prestige to be a valid job offer.
If the employee doesn’t believe the job offer is valid, he or she can request a DOL review. If DOL approves the job offer, the compensated recipient is not given an alternative. If they do not take the job, they lose compensation and the job offer. Most compensated recipients accept a valid job offer rather than lose their compensation and the job offer. There are also some who fight the process and win. This is usually the result of the job offer not being valid. Returning the compensated recipient to work stops the cost of compensation, but medical payments may be incurred in the future. More importantly, returning the compensated recipient to work gives them a better life situation.
This blog post identified the need for a methodology for ranking desirability of a return to work. The end result is a methodology for a return to work that is as smooth and cost-effective as possible. The author used the methods in this paper for over a year and reduced costs were seen.
Akel, P., Brown, B., Payson, S., and Pierson, J. Strategic Efforts to Maximize the Return to Work of Workers’ Compensation Recipients in the U.S. Department of Commerce, July 2006.
Department Commerce Supervisors Workers’ Compensation Handbook, version 1.0, Retrieved from http://ohrm.os.doc.gov/s/groups/public/@doc/@cfoasa/@ohrm/documents/content/prod01_001248.pdf on February 25, 2008.
Federal Employees Compensation Act Fact Sheet. Retrieved from URL http://www.dol.gov/esa/regs/compliance/owcp/fecafact.htm, on February 25, 2008.
Fanning, Fred. A Risk Management Approach to Public Sector Worker’s Compensation, Professional Development Conference, 2010, American Society of Safety Engineers, Des Plaines, USA.
Injury Compensation for Federal Employees, Department of Labor, September 25, 2007. Retrieved from http://www.dol.gov/esa/regs/compliance/owcp/DFEC%20Folio/agencyhb.pdf, on February 25, 2008.
Maximizing Return to Work in the Federal Sector: How to Design, Implement, and Maintain a Successful Program, 2005, LRP Publications, Palm Beach Gardens, FL, USA.
Title 5-Government Organization and Employees, Part III–Employees, Subpart G-Insurance and Annuities, Chapter 81- Compensation for Work Injuries. Retrieved from http://www.access.gpo.gov/uscode/title5/partiii_subpartg_chapter81_.html on February 25, 2008.