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POSSIBLE BENEFIT CHANGE FOR RETIREMENT-AGE CLAIMANTS

Potential changes in federal workers’ compensation law may significantly affect older injured federal workers who currently receive compensation. And change may come as a result of the president’s budget proposal.

Senator Susan Collins (R; Maine) has introduced legislation that will attempt to reduce federal workers’ compensation costs. (S. 261 A bill to amend Chapter 81 of Title 5, United States Code) The bill would convert retirement-eligible compensation claimants to retirement benefits when they reach age 65.

President Obama’s proposed budget has the following provisions to amend the Federal Employee’s Compensation Act:

1. streamline the claims process;
2. increase submission of claims electronically and facilitate the uploading of documents, such as medical reports, directly into the claimant’s file to make them immediately available to the claims examiner;
3. enhance the use of a new interactive response system that would give claimants better access to claims examiners;
4. cross match federal compensation records with social security records to reduce improper payment;
5. add an administrative surcharge to the amount billed to federal agencies for federal compensation costs for their employees; and
6. convert retirement-age claimants to a retirement-annuity-level benefit.

What the proposed legislation and budget have in common is the conversion of workers’ compensation benefits to retirement benefits at retirement age. For most, if not all, that would mean a reduction of benefits. For some, the reduction would be dramatic, if they worked for the federal government a relatively short time in terms of earning retirement benefits.

Senator Collins framed her proposed legislation by saying:

FECA pays monthly benefits to about 49,000 federal employees who are on its "periodic roll." From July 1, 2009 to June 30, 2010, the cost was $2.78 billion. Of that dollar amount, nearly half—or $1.1 billion—went to U.S. Postal Service employees.

At the U.S. Postal Service, for example, more than 2,000 employees currently receiving federal workers' compensation benefits are 70 years or older. Nearly 1,000 employees are 80 years or older. Incredibly, 132 of these individuals are 90 and older and there are three who are 98. This abuse may extend across the government. If recipients are gaming this crucial benefit at taxpayers' expense, they must be exposed and the underlying program must be reformed. [from the senator’s website]

Senator Collins sees the issue as one of fraud or abuse. In my experience, a person past retirement age receives wage-loss and medical compensation simply because OWCP has not terminated his compensation. OWCP reminds claimants that workers’ compensation is not a retirement program, but a claimant may assume or hope he will be perpetually eligible. He may continue to be disabled from his work-related injury. He doesn’t engage in shady schemes to stay on compensation. If he receives a notice of proposed termination of compensation or a notice of termination, he responds to and appeals the decisions—rights all federal workers’ compensation claimants have.

I do not know if the changes, through new law or budget measures, will ever happen—there are many steps between suggestions and implementation, and I don’t know when any change will go into effect. However, in the present fiscal and political environment, I anticipate there will be changes for federal compensation claimants.

Right now it is difficult to know the final details of the bill or budget. I’ve heard from people wondering if current retirement-age claimants will be grandfathered into the old law and continue to receive wage-loss compensation. I also heard from government workers who are entitled to little federal retirement benefits and who worry no provisions will be made for them. If concerned, this would be a good time for claimants to contact congresspersons and senators to tell their story and explain what the changes would do to their lives.

March 2011

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