National Nuclear Security Administration contractor sites provided disincentives to employees to return to work by paying them more while they were on disability than if they were not, the Energy inspector general has said.
It said the National Nuclear Security Administration had not ensured that its contractor sites always managed their disability plans effectively and reduced costs by implementing return-to-work programs.
The Lawrence Livermore National Laboratory, Sandia National Laboratories, and the Y-12 National Security Complex supplemented worker compensation with payments that gave employees more net income when they were on disability payments than when they were working, according to the IG.
It said for example, Livermore purchased guaranteed cost workers’ compensation insurance with no deductible, which may not be the most cost-effective plan available, and Livermore incurred, charged and was subsequently reimbursed approximately $1.26 million by NNSA in potentially unallowable broker compensation for fiscal 2008 through 2011.
The IG found that the sites did not implement best practices associated with non-occupational disabilities, and that two of them did not adopt some other best practices that can reduce workers’ compensation costs.
NNSA, NNSA site offices, and contractor officials did not exercise adequate oversight of, or provide resources necessary to improve, contractor disability plans, the IG said, adding that by increasing its oversight of contractor disability programs and implementing a consultant’s recommendations, NNSA could save more than $3.3 million annually.
Management generally agreed with the findings and indicated that site officials had discussed the issues with the contractors and planned corrective actions.
