[Congressional Record Volume 157, Number 15 (Wednesday, February 2, 2011)]
[Senate]
[Pages S485-S486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS:
  S. 261. A bill to amend chapter 81 or title 5, United States Code, to 
provide for reform relating to Federal employees workers compensation; 
to the Committee on Homeland Security and Governmental Affairs.
  Ms. COLLINS. Mr. President, I rise this evening to introduce the 
Federal Employees Compensation Reform Act of 2011. This bill would 
preserve the essential purpose of the Federal Workers' Compensation 
Program, which is to ensure income for injured Federal and postal 
workers, while at the same time it would protect the program from fraud 
and abuse.
  The Federal Employees Compensation Act, which is known as FECA, 
provides benefits that serve as a safety net for Federal employees and 
postal employees who are injured on the job, providing income until the 
healing process and rehabilitation allowed them to return to work. 
Obviously, we want to support those employees until they can return to 
work. That is both humane and just.
  Over the years, however, this program has unintentionally morphed 
into an alternative retirement program that is far more financially 
lucrative for recipients than the standard Federal retirement system. 
Because of the way the program is structured, for some individuals, 
FECA has become a gold-plated retirement system, tainted by unfairness, 
perverse incentives, and the potential for abuse and fraud.
  This program pays monthly benefits to about 49,000 recipients. Those 
are recipients who have suffered a work-related injury and have been 
approved for workers' comp benefits.
  In the past fiscal year, this program cost $2.78 billion. Of that 
amount, nearly $1.1 billion went to Postal Service employees receiving 
these benefits.
  This program has become increasingly expensive and requires some 
commonsense reforms--reforms that many States have already implemented 
in their own workers' comp programs.
  As it currently operates, FECA includes a perverse financial 
incentive that encourages older employees who otherwise would have 
retired to continue to receive workers' comp benefits.
  Remember, these payments are designed as a bridge to help injured 
workers until they are able to return to work. That is the important 
phrase--``return to work.'' This program was never intended to serve as 
a higher paying alternative to the Federal retirement system.
  Federal employees on FECA receive an average of 73 percent of their 
gross pay. Moreover, these workers' comp benefits are tax free--another 
substantial benefit.
  By contrast, a Federal employee, with 30 years of service under the 
Civil Service Retirement System, would average slightly more than 56 
percent of his or her gross pay as a retirement benefit, and these 
retirement benefits are taxed. It pays then to stay on workers' comp 
for as long as possible, since many recipients receive more money under 
that program than they would if they were to retire.
  Let me again emphasize that these workers' comp payments are tax 
free--another big difference.
  In fact, according to the numbers produced by the Department of 
Labor, nearly 30 percent of the current workers' comp recipients are 
age 66 and older, while the average retirement age for both Federal 
employees and postal workers is age 60.
  With no mandatory Federal retirement age, FECA recipients are allowed 
to stay on workers' comp rolls for their entire lifetimes, even when 
there is no expectation that they will return to work because of their 
advanced age.
  Some employees have continued to receive Federal workers' comp 
benefits into their hundreds. For the U.S. Postal Service alone, let's 
look at the statistics.
  As we can see, there are more than 15,000 recipients in total. Of 
those, more than 2,000 recipients are age 70 or older; 927 recipients 
are age 80 or older; 132 recipients are age 90 or older; and 
astonishingly enough, 3 postal employees receiving workers' comp are 
age 98 or older.
  Mr. President, it is obvious these workers are not going back to 
work. They clearly should be transitioned to the retirement system. I 
must ask the obvious question: Is there any likelihood at all these 
recipients are ever going to return to the workforce? No. Then why 
aren't they transitioning to the retirement system when they reach 
retirement age? Think how unfair that is to the worker who does retire, 
say, at age 65 and gets a lesser amount.
  Right now, the way the system is structured it does not encourage 
people to go back to work or to transfer to retirement at an age when 
most of their fellow workers would have retired. To prevent this 
continued abuse, my bill would convert retirement-eligible postal and 
Federal employees on workers' compensation to the retirement system 
when they reach age 65.
  Now, that is generous, Mr. President, because we know the average 
retirement age is actually 60. I would choose age 65. This is a 
commonsense change that would save millions of dollars that the Postal 
Service, the Federal Government, and the American taxpayer cannot 
afford to spend. It is also a matter of fairness, Mr. President. But we 
must also examine other elements of the FECA program to determine 
whether there are some additional improvements that are necessary.
  Unlike many State programs, the Federal workers' compensation program 
has no cap nor time limits on benefits. Moreover, the Federal 
Department of Labor acknowledges a 2- to 3-percent fraud rate in the 
program. I suspect it may be even higher. We need to reduce this rate 
of fraud by examining whether the medical certification requirements 
and other internal controls should be strengthened. Are we doing 
medical reviews to see if these individuals could go back to work?
  For example, a former postal worker was sentenced just a week or so 
ago to 5 months in jail after pleading guilty to workers' compensation 
fraud. The employee claimed he was unable to walk from his parked car 
to the post

[[Page S486]]

office. But at the same time he was receiving tax-free workers' 
compensation benefits, he was also operating a snow removal and lawn 
care business.
  In addition, about 100 other claimants per year are prosecuted by the 
Department of Labor's Office of Inspector General because they received 
workers' compensation and their retirement pay. These are the so-called 
``double-dippers.''
  Mr. President, as part of my effort to strengthen oversight of this 
program, I have asked the Government Accountability Office, along with 
Senator Coburn and Senator McCaskill, to audit the FECA program and 
report on the length of time individuals remain on the program, the 
number of recipients who exceed the standard Federal retirement age, 
and how the Federal program compares to State workers' compensation 
best practices. I expect these findings will lead to additional reform 
proposals as the bill proceeds through the Senate.
  I also intend to work with stakeholders to determine if changes in 
the Federal Employees Retirement System, the FERS system, as opposed to 
the old Civil Service Retirement System are necessary to make sure that 
workers' compensation recipients would be treated fairly when they are 
converted to FERS retirement benefits under this bill.
  For example, this may require the Department of Labor to administer 
the Thrift Savings Plan contributions for recipients or to require 
Social Security contributions from workers' compensation recipients.
  What is clear, however, is that this program is in need of urgent 
reform. The program is costing too much, injured workers are not being 
monitored sufficiently and helped to return to productive work, 
recipients who should be in the retirement system are instead receiving 
tax-free benefits, and some agencies have high claim rates, suggesting 
that safety improvements are needed.
  For the sake of fairness and fiscal responsibility, we must reform 
this program now. Not doing so is an affront to the thousands of 
Federal employees who enter the retirement system. It is a disservice 
to those Federal and postal employees who truly need workers' 
compensation benefits, and it is an unnecessary burden on taxpayers.

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