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Congress considers taking over Workers’ Compensation under the Defense Base Act October 18, 2008

Posted by Herb Chestnut in Uncategorized.
Tags: , ,

I read recently that Congress was considering a proposal that the federal government take control of the administration, funding and all other aspects of the Defense Base Act.  While I think that we all agree that AIG is not the most efficient and fair manager of the Act, just ask anyone who has ever had a claim under the Federal Employees’ Compensation Act (FECA) how they feel about the government getting in the game.

FECA applies generally to all federal employees working in the U.S. who do not come under the Non-Appropriated Fund (NAF) extension to the Longshore and Harbor Workers’ Compensation Act (LHWCA).  Therefore, if you work for at the Post Exchange, the commisary, the golf course or anywhere else that derives its funds from sources besides Congress, you come under the NAF and the LHWCA.  Most of these workers are employed by AAFES or the Navy Exchange Service.  Practically everyone else, postal workers, employees of the DOL, federal court employees, any employee of a federal agency, come under the FECA.  The easy test is, if you are a civil servant, you have the pleasure of having coverage under the FECA.

What is so bad about the FECA you ask? 

First, the District Officesin a Longshore case serve as mediators and assist both sides in following the Act. Under the FECA, they become the advocate for the employer.  If you can ever find out who your claims examiner (CE) is, you can certainly never get him or her on the phone.  They are so swamped that all mail to any disctict office goes to a central mailing/scanning facility in London, Kentucky.  Theoretically, it is scanned into the system.  However, with the volume of mail, the chances of you having to send something three or four times is frighteningly high.  Once the CE finally gets your document, there is no guarentee that anyone will take any action on it.  The only way to get anything done is to get your Congressman involved.  I like to think that my Congressman has more important things on his or her plate than whether I get reimbursed for mileage.

My point is, if Congress basically “insures” these companies and administers the Defense Base Act, it will be worse than it is now plus the taxpayers will be forced to pay not only for benefits but for the massive expansion of the District Offices handling Longshore cases.  If you are skeptical or curious, next time you are on the phone with the District Office, ask them how many claims examiners they have.  Also, ask if they know how many claims examiners are on the FECA side (it is the same District Office) and ask for the phone number.  Call the FECA office and see how long it takes for someone to even answer the phone.

Secondly, this action would make it very difficult for the CEs to remain impartial when one of the parties would be the federal government.  Even if the CE is successful in remaining neutral, the appearance of bias is just as bad as bias itself.  Under the FECA, the CE acts as an advocate for the employer and you have to argue with the district office to obtain benefits.  If you do not like the decision of the district office, you have a limited right to a hearing.  However, the hearing is not conducted by a judge but a “hearing officer” who also works for the Department of Labor .  Most of these hearing officers used to be, you guessed it, claims examiners at the District Office.  If you do not like the hearing officer’s decision, you can appeal to an entity called the “Employees Compensation Appeals Board” (ECAB).  However, good luck getting a decision, much less a favorable one.  According to the Acting Inspector General, Department of Labor, the admitted backlog of the ECAB is 16 months.  The actual backlog may be worse.  Furthermore, a whopping 89% of the claimants who patiently wait two years for a decision, lose

As unfair and incompetent the insurers can be in this area, their behavior is offset by the fairness and competency of the claims examiners at the District Offices and the Administrative Law Judges at the OALJ.  I would rather take my chances any day in a true adversary system with the OWCP and the OALJ in the middle as mediators and judges.  If these claims are handled by the government, whether under the FECA or a bastardized version of the LHWCA, we will suffer – we, the claimants, we, the advocates and we, the taxpayers.

Write your Congressman and tell them “NO.”  Defense Base Act cases are good where they are.  Why should we create a new bureaucracy when the current system, while not perfect, works?

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1. Jana Crowder - October 18, 2008

The backlog for Injured contractors wait is 4+ years in the DBA system for medical and disability benefits. Furthermore, a whopping 80-90% of the claimants who patiently wait for a decision, lose. Even if the ALJ awards benefits to the Injured, the Review board comes back and reverses the judges decision. The Defense Base Act set out rules and regulations for the injured to abide by, but there isn’t much oversight in enforcement of regulations for the Insurers like AIG. They can file a LS-207 and just deny & STOP benefits as they see fit, (approved by DOL). It is up to the injured to fight for their entitlements under the ACT, Which is what the ACT is supppose to provide!

You want to talk about Bias and impartial, how about Attorneys for AIG and CNA along with Attorneys for the Injured get together and write a book called the ” The Defense Base Act and War Hazards Compensation Act Handbook” then THE UNITED STATES DEPARTMENT OF LABOR, OFFICE OF WORKERS’ COMPENSATION PROGRAMS presents a DBA conference in Washington,D.C. on Oct. 23 & 24, which includes a copy of the “NEW Defense Base Act and War Hazards Compensation Act Handbook” How does this program work for the injured? Seems we already have what you called Bias in the DBA system.

See Waxmans hearing from May, 2008 on the DBA. 284 million premium for workman’s comp coverage, KBR contract which is a cost plus contract gets up to 8 million dollar mark up at tax payers expense! Total for taxpayers 292 million dollars! Out of this amount ONLY 73 million actually goes to the INJURED contractors.

AIG and KBR pocket over 100 million EACH as PURE PROFIT.


Let me say this, statue of Limitation for the injured is 1 yr. to file a claim under the DBA act.. what is the fines and penilities for the employer and/or the Insurer for not Informing the injured of their rights under the DBA within a timely manner, “lets say 3 months after 1st injury report if file just for aurgument ?”
If someone who is injured doesn’t know about their rights and how to file or even that they are entitled to free attorney? What happens to the timeline according to the DBA? Does the injured lose?

2. Jana Crowder - October 18, 2008

When you have a court order for a depo. for a doctor who is paid by the Insurer…AIG, how does AIG get away with violating this court order. Or better, your attorney is trying to get a depo. and the Insurer flat refuses to allow it, what law gives the insure that right? Many cases are being Postponed or delayed due to this Tatic that AIG is using. Abusing our court system isn’t right. Penatilites should be dished out to these Insurers. Yet the injured is bound by law!

3. Jana Crowder - October 18, 2008

OK I admit you got me going on this one. But really, here is how it was explained to me. When you run empty convoys acorss Iraq, it puts more contractors at risk, which then raises the Premiums. Premiums go up! Which then cost the tax payers. For every contractors who get injured, the more money the Insurers and Contractors employers make! Then the profits come in and they aren’t going to the injured, the profits go to ??? Yeap you guess it , everyone , but injured. Under the War Hazard Act. the insurer can get a reimburstment 0f 15% back on what they had to pay out, weahter they win or lose. It’s a incentive to litagate,(drag it out… to bill for their hours) which is then called administration fee.
Arn’t attorneys fees paid out through the WHA? And if they settle, how are the attorneys paid? Is it taken out of the injured settlement, war hazard act, or does the Insurer pay the injured attonrey fees?

4. Jana Crowder - October 18, 2008

What board decides what to publish, the Zimmerman case needs to be published, so it can’t be questioned anymore about it Precedential value. This is how the DBA works! The cases that win and could help the next one, are hidding and not made published!
When a court sets a Precedent in a case those cases MUST be made Public! Many of these contractors are facing the same issue when it come to weekly cal. of benefits.

5. Marcie Hascall Clark - October 19, 2008

The employer is relieved of all responsibility to provide a safe workplace or even to disclose this to the employee.
The insurance companies are allowed to deny medical and wage benefits or to just stop paying them on a whim, ruining the employees credit rating and/or causing them to lose their homes and families.
The defense lawyers are allowed to translate the law to the insurance companies benefit and the DoL promotes these opinions.
DBA Casualties are expected to live on wages determined at the time they were injured with never an increase for inflation for the rest of their lives.
As we step into an era of hyper inflation and fewer jobs available even to the able bodied I have a difficult time seeing how the current system works at all.
I’m not sure that a new beauracracy that eliminates the blood sucking insurance companies could be much worse?

6. Herbert J. Chestnut - October 22, 2008

What concerns me is, under the FECA, you cannot appeal to the Office of Administative Law Judges or the Federal courts. I agree that these insurance companies do not care what happens to the injured workers in these cases. The answer is for Congress to enact stiffer penalties for failure to commence benefits, failure to authorize medical, and for improperly suspending benefits and for the DOL, OALJ and the Federal Courts to begin to hammer the insurer with penalties, fines, fees, interest and costs. If an insurer has no legitimate reason for not accepting a case, hit them with a 25% penalty paid to the claimant. If a medical appointment or procedure is not approved or paid for, another 25% on top of the bill.

The loophole that allows the insurer to simply stop paying benefits at any time must be closed. Under most state systems, an insurer cannot suspend benefits based on an independent medical exam without an order from a judge. Nor should an insurer be allowed to suspend benefits based on an invalid labor market survey.

The Longshore Act is not the problem; it simply needs to be tweaked to take away some of the discretion of the insurer. Also, regarding the cost of insurance, the longer this goes on, other insurers will get into the game and many companies will look at the efficacy of self insurance. Also, if you are injured, GET AN ATTORNEY. You cannot play the game if you do not know the rules. It does not cost anything to hire most attorneys. If an attorney wants an injured worker to put up money, go to someone else. Make sure he or she knows the DBA. I can assure you that it does not take our clients an average of four years to get benefits and our success rate is certainly not 10-20%.

Another suggestion that I have heard to solve the problem is to have a single insurer, in essence to create a monopoly, in DBA claims. How would this be any different than what we have now, except that an insurance monopoly would be more powerful. This cannot be the answer.

There are many people who comment on this blog who have come to know powerful people and are well respected for their work. We need to get together, network and effect some positive change in the system.

7. Jana Crowder - October 29, 2008

Thank you for your answer.

One guy I talk to was shot in the chest, one entry wound, no exit wound. Here it is 3years later, and AIG attorneys are playing games with his life, just so they can WIN? This poor man was even offered “job placement” after he got home by the employer/insurer, and he took the job, and low and behold he Passed out on the job and that company had to have him lifeflighted to a medical center. Doctors there couldn’t do the test needed, due to the bullet still inside him. (still there today) still have no idea what is causing him to passout. (maybe lack of blood flow to somewhere?) His attoney is trying to get a depo on the doctor for the other side, yet the insurer just doens’t abid. Yet the contractors is forced to abid to and be seen by their doctors for questioning? I bet they get his his court date POSTPONED again. How is he suppose to have a chance in the court room when his attoney can’t even cross examin the Insures doctor. He is suffering, yea he gets pick of 1st doctor, but even though he is intitled to treatment,and the company is to “forthwith treatment” all they have to do is question it, and not approve it, file a LS 207 and stop payment! This is not fair and is medical neglect. To top it off this guy might suffer from PTSD. How would one think that a person with a daily reminder in him of what happen could even begin to start getting “so called over it” with this bullet inside him? Weather or not this bullet is life threatening, (we don’t know yet) don’t you think it might just help him and his PTSD if their is a chance it can be removed, Don’t you think that should be the right of the one carrying the bullet and his mental status. It’s not like he’s not trying to work and do everything possiable to better his life, he didn’t ask to be shot!

8. DBA coverage + New administration - November 11, 2008

As a widow that receives survivor’s “benefits” under the Defense Base Act or War Hazard Compensation Act (WHCA), what are the chances that this payment will be discontinued? The way that the new administration has been talking they are going to clean house even with programs like the DBA that has been in effect since 1942.

9. nakah al-enezi - January 28, 2009

i got injured when i was in iraq i have a PTSD iam getting paid untill now , but i cant stop the medicine so my question is do i have get pay for rest of life ?

10. The Department of Defense may be pondering changes in Defense Base Act coverage « The Defense Base Act Blog - March 11, 2009

[…] Or might it mean that the government could take direct charge and responsibility over this program as they do for direct employees of the federal government (like Postal Workers).  Please read this posing on why our federal government taking over Defense Base Act claims and acting as the insurer AND the judge/jury might be a huge mi…. […]

11. Anonymous - August 26, 2009

Has Roger A. Levy been disbarred? I found this link and thought it was interesting:


Herb Chestnut - August 26, 2009

I think that is a different Roger Levy.

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