FECA Charge-Back Targeted Again

The Bush administration once again is seeking to change the

way costs are accounted for in the Federal Employees

Compensation Act program, a system that long has been

nettlesome to federal managers who have employees go out

on injury compensation.


Under current policy, most of the costs of FECA benefits–

which go to employees who suffer job-related injuries or

illnesses–the first 45 days of disability typically are

covered by keeping those workers in pay status with their

employing agencies, called the continuation-of-pay period.

For longer-term compensation, most of the costs are charged

back to the beneficiaries’ employing agencies.


Managers have long complained that due to this system, their

budgets are reduced for employees on FECA, even long after

the employee would normally be in retirement–where the

employing agency no longer bears costs. The budget estimates

that in 2006, 163,000 employees will file claims and 57,000

of them will receive long-term benefits at a cost of some

$234 million.


The administration proposes, as it has before, to convert

prospectively retirement-age beneficiaries to an annuity

benefit, as well as to impose an up-front waiting period

before benefits begin, which it says is the rule in state

injury compensation programs. It also seeks to allow the

Department of Labor, which oversees FECA, to recapture

compensation costs from any third parties that might be

held responsible for federal worker injuries or illnesses.


Similar provisions were considered last year as part of

legislation to reform the U.S. Postal Service, although

that bill never reached final enactment due to other issues;

sponsors expect to try again in the current Congress.

Beyond a few hearings, though, Congress has shown only

minimal interest in the FECA program in general and in those

proposals in particular.

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