Following is the portion of recent testimony from the Congressional Research Service at a House hearing describing the FECA injury compensation program.

Program Financing
Benefits under FECA are paid out of the federal Employees’ Compensation Fund. This fund is financed by appropriations from Congress that are used to pay current FECA benefits and that are ultimately reimbursed by federal agencies through the chargeback process in which the costs of benefits are annually charged back to each beneficiary’s host agency. The FECA statute requires that each agency and instrumentality of the federal government include in its annual budget estimate for the next FY a request for an appropriation in the amount of its chargeback benefit costs. Thus, the ultimate cost of injuries, illnesses, and deaths of federal employees falls on each employee’s host agency, not DOL.

The administrative costs associated with the FECA program are provided to the DOL through the appropriations process. In addition, the U.S. Postal Service (USPS) and certain other non-appropriated entities of the federal government are required to pay for the “fair share” of the costs of administering benefits for their employees.

FECA Benefit Costs
During the period between July 1, 2016, and June 30, 2017 (Chargeback Year 2017), the FECA program paid out $2.946 billion in benefits to 222,616 beneficiaries. These benefits included approximately $1.852 billion in disability benefits, $936 million in medical benefits, and $157 million in benefits to the survivors of federal employees killed on the job.

Employees Covered by FECA
The FECA program covers all civilians employed by the federal government, including employees in the executive, legislative, and judicial branches of the government. Both full-time and part-time workers are covered, as are certain volunteers and all persons serving on federal juries. Coverage is also extended to certain groups, including state and local law enforcement officers acting in a federal capacity, Peace Corps volunteers, students participating in Reserve Officer Training Corps (ROTC) programs, and members of the Coast Guard Auxiliary and Civil Air Patrol.

Conditions Covered by FECA
Under FECA, workers’ compensation benefits are paid to any covered employee for any disability or death caused by any injury or illness sustained during the employee’s work for the federal government. There is no list of covered conditions nor is there a list of conditions that are not covered. However, no injury, illness, or death may be compensated by FECA if the condition was

* caused by the willful misconduct of the employee;
* caused by the employee’s intention to bring about the injury or death of himself or another person; or
* proximately caused by the intoxication of the employee.

In addition, any person convicted of a felony related to the fraudulent application for or receipt of FECA benefits forfeits his or her rights to all FECA benefits for any injury that occurred on or before the date of conviction. The benefits of any person confined in jail, prison, or an institution pursuant to a felony conviction are suspended for the duration of the incarceration and may not be recovered.

FECA Compensation Benefits

Continuation of Pay
In the case of a traumatic injury, an employee is eligible for continuation of pay. Continuation of pay is paid by the employing agency and is equal to 100% of the employee’s rate of pay at the time of the traumatic injury. Since continuation of pay is considered salary and not compensation, it is taxed and subject to any deductions normally made against the employee’s salary. Any lost work time beyond 45 days, or lost time due to a latent condition, is considered either a partial or total disability under FECA.

Employees of the USPS must satisfy a three-day waiting period before becoming eligible for continuation of pay. All other employees must satisfy this waiting period before receiving disability benefits. The waiting periods are waived in cases of permanent disability or temporary disability exceeding 14 days.

Partial Disability
If an employee is unable to work full-time at his or her previous job, but is able to work either part-time or at a job in a lower pay category, then he or she is considered partially disabled and eligible for the following compensation benefits:
* if the employee is single, a monthly benefit equal to two-thirds of the difference between the employee’s pre-disability and post-disability monthly wage, or
* if the employee has at least one dependent, a monthly benefit equal to 75% of the difference between the employee’s pre-disability and post-disability monthly wage.
The compensation benefits paid for partial disability are capped at 75% of the maximum basic pay at rate GS-15 (GS-15, step 10), are not subject to federal taxation, and are subject to an annual cost-of-living adjustment. Benefits are paid for the duration of the disability or the life of the beneficiary.
If an employee’s actual wages do not accurately represent his or her true wage-earning capacity, or if he or she has no wages, then his or her partial disability benefit is based on his or her wage-earning capacity as determined by OWCP using a combination of vocational factors and “degree of physical impairment.”

Scheduled Benefits
In cases in which an employee suffers a permanent partial disability, such as the loss of a limb, he or she is entitled to a scheduled benefit. The scheduled benefit is in addition to any other partial or total disability benefits received. An employee may receive a scheduled award even if he or she has returned to full-time work. A scheduled award is generally paid on a periodic basis, but may be paid as a lump sum in certain circumstances. If an employee suffers a disfigurement of the face, head, or neck that is of such severity that it may limit his or her ability to secure or retain employment, the employee is entitled to up to $3,500 in additional compensation.

Total Disability
If an employee is unable to work at all, then he or she is considered totally disabled and eligible for the following compensation benefits:
* if the employee is single, a monthly benefit equal to two-thirds of the employee’s pre-disability monthly wage, or
* if the employee has at least one dependent (including a spouse), a monthly benefit equal to 75% of the employee’s pre-disability monthly wage.
The compensation benefits paid for total disability are capped at 75% of the maximum basic pay at rate GS-15 (GS-15, step 10), are not subject to federal taxation, and are subject to an annual cost-of-living adjustment. Benefits are payable until it is determined that the employee is no longer totally disabled and may continue until the employee’s death.
A FECA beneficiary who is blind, paralyzed, or otherwise disabled such that he or she needs constant personal attendant care may receive an additional benefit of up to $1,500 per month.
Death
If an employee dies in the course of employment or from a latent condition caused by his or her employment, the employee’s survivors are eligible for the following compensation benefits:
* if the employee had a spouse and no children, then the spouse is eligible for a monthly benefit equal to 50% of the employee’s monthly wage at the time of death or
* if the employee had a spouse and one or more children, then the spouse is eligible for a monthly benefit equal to 45% of the employee’s monthly wage at the time of death and each child is eligible for a monthly benefit equal to 15% of the employee’s monthly wage at the time of death, up to a maximum family benefit of 75% of the employee’s monthly wage at the time of death.
Special rules apply in cases in which an employee dies without a spouse or children or with only children.
If a spouse remarries before the age of 55, then he or she is entitled to a lump-sum payment equal to 24 months of benefits, after which all benefits cease. If a spouse remarries at the age of 55 or older, benefits continue for life. A child’s benefits end at the age of 18, or age 23 if the child is still in school. A child’s benefits continue for life if the child is disabled and incapable of self-support.
The compensation benefits paid for death are capped at 75% of the maximum basic pay at rate GS-15, are not subject to federal taxation, and are subject to an annual cost-of-living adjustment.

Additional Death Benefits
The personal representative of the deceased employee is entitled to reimbursement, up to $200, of any costs associated with terminating the deceased employee’s formal relationship with the federal government. The personal representative of the deceased employee is also entitled to a reimbursement of funeral costs up to $800, and the federal government will pay any costs associated with shipping a body from the place of death to the employee’s home. An employee killed while working with the military in a contingency operation is also entitled to a special gratuity payment of up to $100,000 payable to his or her designated survivors.

Vocational Rehabilitation
The Secretary of Labor may direct any FECA beneficiary to participate in vocational rehabilitation, the costs of which are paid by the federal government. While participating in vocational rehabilitation, the beneficiary may receive an additional benefit of up to $200 per month. However, any beneficiary who is directed to participate in vocational rehabilitation and fails to do so may have his or her benefit reduced to a level consistent with the increased wage earning capacity that likely would have resulted from participation in vocational rehabilitation.

FECA Medical Benefits
Under FECA, all medical costs—including medical devices, therapies, and medications—associated with the treatment of a covered injury or illness are paid for, in full, by the federal government. A FECA beneficiary is not responsible for any coinsurance or any other costs associated with his or her medical treatment, and does not have to use any personal insurance for any covered medical costs. A published fee schedule is used by OWCP to determine the rate or reimbursement paid to medical providers.
Generally, a beneficiary may select his or her own medical provider and is reimbursed for the costs associated with transportation to receive medical services. Medical providers must be authorized by OWCP and can have their authorization removed if it is determined that they are violating program rules or are involved in fraud.

Statutory Requirement of Necessity for Medical Benefits
The FECA statute includes the following specific language regarding the scope of medical benefits that are to be provided to injured workers:
The United States shall furnish to an employee who is injured while in the performance of duty, the services, appliances, and supplies prescribed or recommended by a qualified physician, which the Secretary of Labor considers likely to cure, give relief, reduce the degree or the period of disability, or aid in lessening the amount of the monthly compensation…
In its implementing regulations for this provision, DOL provides the following regarding the entitlement of FECA beneficiaries to medical benefits:
The employee is entitled to receive all medical services, appliances or supplies which a qualified physician prescribes or recommends and which OWCP considers necessary to treat the work-related injury…
In a 2016 notice in the Federal Register, OWCP provided the following explanation of the medical necessity provision in regards to the provision of medical benefits under FECA:
The FECA statute grants OWCP discretion to provide an injured employee the ‘‘services, appliances, and supplies prescribed or recommended by a qualified physician’’ which OWCP considers ‘‘likely to cure, give relief, reduce the degree or the period of disability, or aid in lessening the amount of the monthly compensation.’’ In other words, OWCP is mandated to provide medical supplies and services—including prescription drugs such as opioids and compounded drugs—that it considers medically necessary.