The Federal Employees’ Compensation Act (FECA): Workers’ Compensation for Federal Employees

Abstract

[Excerpt] The Federal Employees’ Compensation Act (FECA) is the workers’ compensation program for federal employees. Like all workers’ compensation programs, FECA pays disability, survivors, and medical benefits, without fault, to employees who are injured or become ill in the course of their federal employment and the survivors of employees killed on the job. The FECA program is administered by the Department of Labor (DOL) and the costs of benefits are paid by each employee’s host agency. Employees of the U.S. Postal Service (USPS) currently comprise the largest group of FECA beneficiaries and are responsible for the largest share of FECA benefits. The modern FECA program can trace its roots to 1916 but has not been significantly amended since 1974. Today, the FECA program pays a basic disability benefit equal to two-thirds of an injured worker’s pre-disability wage, which rises to 75% of the pre-disability wage if the worker has any dependents. Benefits continue for the duration of disability or the life of the beneficiary and in cases of traumatic injuries, beneficiaries can receive a continuation of their full pay for the first 45 days. Persons with specific permanent partial disabilities, such as the loss of a limb, are entitled to disability benefits for a set number weeks provided by schedules set by statute and regulation. All medical costs associated with covered conditions are provided by the FECA program without any copayments, cost-sharing, or use of private insurance by the beneficiaries. The survivors of employees killed on the job are entitled to cash benefits based on the worker’s wages and a modest benefit for funeral costs. Beneficiaries are also entitled to vocational rehabilitation services to assist them in returning to work. In the 112th Congress, several committees have held hearings on the FECA program. These hearings have identified several key policy issues facing the program, including the disproportionate share of claims and program costs attributed to postal workers, the payment of FECA benefits after retirement age, the overall generosity of FECA disability benefits as compared with those offered by the states, and the administration of the FECA program. To address some of these policy issues, committees in the House and Senate passed legislation that would make changes to the FECA program. In the House, H.R. 2309 would set financial conditions under which the USPS would be required to create a new workers’ compensation system for its employees. Additional bills, H.R. 2465, passed by the House, and S. 1789, would make changes to the FECA program for all federal employees with the Senate legislation reducing benefit levels for beneficiaries over retirement age and eliminating augmented compensation for dependents. This report will be updated to reflect major legislative activity