Workers' Compensation: Selected Comparisons of Federal and State Laws
(Letter Report, 04/03/96, GAO/GGD-96-76).
Concerns have been raised that workers' compensation benefits authorized
under the Federal Employees' Compensation Act may provide federal
workers having job-related injuries with more generous benefits than
other federal or state workers' compensation programs. This report
compares (1) monetary benefits authorized by the act with those
authorized by other workers' compensation laws and (2) other significant
benefit provisions of federal and state workers' compensation laws, such
as those involving waiting periods, physician choice, and coverage of
occupational diseases.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-96-76
TITLE: Workers' Compensation: Selected Comparisons of Federal and
State Laws
DATE: 04/03/96
SUBJECT: Workers compensation
Disability benefits
Federal employees
State programs
State law
Labor law
Federal employee disability programs
Compensation claims
Dependents
Employee medical benefits
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Cover
================================================================ COVER
Report to Congressional Requesters
April 1996
WORKERS' COMPENSATION - SELECTED
COMPARISONS OF FEDERAL AND STATE
LAWS
GAO/GGD-96-76
Workers' Compensation
(966638)
Abbreviations
=============================================================== ABBREV
AWW - average weekly wage
BLS - Bureau of Labor Statistics
COP - continuation of pay
D.C. - District of Columbia
ECAB - Employees' Compensation Appeals Board
FECA - Federal Employees' Compensation Act
FERS - Federal Employees' Retirement System
GS - general schedule
HMO - health maintenance organization
LHWCA - Longshore and Harbor Workers' Compensation Act
PPO - preferred provider organization
OALJ - Office of Administrative Law Judges
OSHA - Occupational Safety and Health Administration
OWCP - Office of Workers' Compensation Programs
SSA - Social Security Administration
WCRI - Workers Compensation Research Institute
Letter
=============================================================== LETTER
B-260237
April 3, 1996
The Honorable Thad Cochran
The Honorable Joseph I. Lieberman
United States Senate
Because of concerns that workers' compensation benefits authorized
under the Federal Employees' Compensation Act (FECA) (5 U.S.C. 8101
et seq., as amended) may provide federal workers having job-related
injuries with more generous benefits than other federal or state
workers' compensation programs, you\1 asked us to compare (1)
monetary benefits authorized by FECA with those authorized by other
workers' compensation laws and (2) other significant benefit
provisions of federal and state workers' compensation laws, such as
those involving waiting periods, physician choice, and coverage of
occupational diseases.
This report presents factual comparisons of benefit and other
provisions of federal and state workers' compensation laws. Most of
these comparisons were current as of January 1, 1995. As agreed, we
did not assess the rationale, fairness, or equity of the level of
benefits under any of the jurisdictions' workers' compensation laws.
--------------------
\1 The Chairman and Ranking Minority Member of the former
Subcommittee on Regulation and Government Information, Senate
Committee on Governmental Affairs, initially requested this review.
Although the Subcommittee was eliminated in early 1995 when the new
Congress reorganized some Senate committees, we agreed with the
former Chairman's office to continue our efforts to compare FECA
provisions with other federal and state workers' compensation laws.
BACKGROUND
------------------------------------------------------------ Letter :1
In the United States, workers' compensation legislation was initially
enacted by most state legislatures and the federal government in the
first part of the 20th century. By 1912, several states had enacted
workers' compensation legislation, while FECA was not enacted until
1916.\2 FECA covers all federal employees as well as selected other
groups of individuals. In 1927, Congress enacted the Longshore and
Harbor Workers' Compensation Act (LHWCA), another workers'
compensation law that covers employees engaged in maritime
employment.
One of the principal aims of workers' compensation programs was to
provide adequate benefits to injured workers while at the same time
limiting employers' liabilities strictly to workers' compensation
payments. Payments were to be prompt and predetermined to relieve
employees and employers of uncertainty and to eliminate wasteful
litigation.
The types of workers' compensation benefits that are paid depend on
the nature and extent of the injury and the ability of injured
employees to continue working. For many employees whose injuries are
not serious, the only benefits received are those of a medical
nature. Employees with more serious injuries or illnesses also may
be entitled to wage-loss benefits, vocational rehabilitation
benefits, or "schedule awards," which are benefits for the permanent
loss of, or loss of use of, certain parts or functions of the body.
In addition, survivors of an employee can receive death benefits if
the employee's death resulted from a job-related injury or illness.
The Department of Labor's Office of Workers' Compensation Programs
(OWCP) is responsible for adjudicating FECA claims and administering
workers' compensation activities authorized by LHWCA. Under state
laws, insurance carriers, self-insured employers, third-party
administrators, or state workers' compensation agencies generally act
as the reviewing and approving entities responsible for adjudicating
injured employees' claims.
--------------------
\2 An earlier workers' compensation act passed in 1908 limited
coverage to federal workers in hazardous occupations.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
FECA generally provides the same types of benefits to injured federal
workers as those provided to injured workers covered under LHWCA,
states, and the District of Columbia (D.C.) workers' compensation
laws. The principal workers' compensation benefits paid under all of
these laws are compensation benefits for wage loss and benefits for
medical care. FECA compensation benefits differ from those of other
laws in three principal ways. In each of these cases, levels of
benefits available under FECA are generally greater than those
available under other workers' compensation laws.
First, although the formula for calculating benefits under FECA is
similar to the formulas of most other laws, FECA's authorized
maximum weekly benefit amount is greater. However, less than 1
percent of the beneficiaries on the long-term compensation rolls
actually receive compensation benefits based on the authorized
maximum benefit amount, according to OWCP.
Second, FECA provides claimants with one or more dependents an
additional benefit of 8-1/3 percent of salary. While seven
states authorize additional dependent benefits, increased
benefits are generally for a fixed amount ranging from $5 to $10
per week for a spouse and/or each child. Increased benefits for
dependents are generally provided only when authorized maximum
benefit levels are not exceeded. LHWCA and the laws of the
other 43 states and D.C. do not provide increased compensation
benefits for injured workers with dependents.
Finally, FECA provides eligible federal workers who suffer
traumatic injuries\3 with salary continuation benefits for a
period not to exceed 45 days. After the 45th day, there is a
3-day waiting period before wage-loss benefits begins. Under
LHWCA and all state workers' compensation laws, injured workers
must be out of work for a 3- to 7-day waiting period before they
can receive wage-loss benefits. If these workers continue to be
out of work for specified periods of time, ranging from 5 to 42
days, they are generally eligible for benefits retroactive to
the date of injury. In cases where employees are not eligible
for retroactive wage-loss benefits, some employers may provide
their employees with salary continuation benefits or may allow
them to receive paid sick leave or other types of leave for days
absent from work.
Other similarities and differences in federal and state workers'
compensation laws exist. While, in our opinion, these differences
may be less substantive than those highlighted above, it is these
differences that make each workers' compensation system unique.
--------------------
\3 OWCP defines traumatic injury as a wound or other condition of the
body caused by external force that is identifiable by time and place
of occurrence and part of the body affected. It must be caused by a
specific event or incident, or series of events or incidents, within
a single day or work shift.
COMPARISON OF PRINCIPAL
PROVISIONS
------------------------------------------------------------ Letter :3
A comparison of the principal statutory provisions of FECA, LHWCA,
and state workers' compensation laws showed that
formulas for calculating workers' compensation benefits were
similar under most laws. As of January 1, 1995, FECA, LHWCA, 35
states, and D.C. calculated benefits based on 66 2/3 percent of
wages,\4 subject to specified maximums. Formulas used in other
jurisdictions ranged from either 60 to 72 percent of wages or 75
to 80 percent of spendable earnings. Spendable earnings take
into consideration applicable standard deductions for federal
and state income taxes and withholdings for Social Security
benefits.
maximum benefits authorized by FECA exceeded those authorized under
other workers' compensation statutes. Under FECA in 1995,
maximum weekly compensation benefits could not exceed $1,274 (75
percent of the maximum base pay of a GS-15 employee). Less than
1 percent of the FECA beneficiaries received maximum benefits,
according to OWCP. Maximum weekly benefits under LHWCA were
$761. State maximum weekly benefits ranged from $253 to $817
based on either (1) a percentage (from 66-2/3 to 200 percent of
the state's average weekly wage (AWW)) or (2) some fixed dollar
amount.
in 1995, minimum weekly FECA benefits of $197 were greater than the
minimum benefits of all but three states. FECA minimum benefits
were based on 75 percent of the minimum base salary of a GS-2
employee or actual pay, whichever was less. Eight states did
not have statutory minimums for weekly benefits. Minimum weekly
benefits under LHWCA were $190. State minimum weekly workers'
compensation benefits ranged from $20 to $283, or actual wages
if less, based on either (1) a percentage (from 15 to 60 percent
of the state's AWW) or (2) some fixed dollar amount.
because FECA's maximum authorized benefits exceeded those under
LHWCA, all states, and D.C. and because workers' compensation
benefits have not been subject to federal income taxes, income
replacement rates\5 for higher-paid federal workers were more
likely to be higher than the rates for similarly paid injured
workers receiving state workers' compensation benefits. In some
cases, these federal workers could have income replacement rates
in excess of 100 percent.
FECA benefits for the permanent loss of, or loss of use of,
specific body parts were calculated on the basis of schedules in
the law that specify the number of weeks employees are to
receive benefits and their salaries. While LHWCA and most
states also compute these schedule awards using employees' wages
and the schedules, awards paid to some injured federal employees
could be higher because of the higher maximum compensation rates
authorized by FECA.
death benefits under FECA and LHWCA and in 22 states and D.C.
varied on the basis of the number of surviving dependents. In
the remaining states, death benefits were the same regardless of
the number of dependents. All workers' compensation laws
authorized burial expenses in cases where death was caused by a
job-related injury. FECA's maximum authorized burial benefits
were lower than those authorized by all but one state. In 1995,
FECA's maximum burial expenses were $800 compared with state
maximums, which ranged from $700 to $7,500.
in administering the FECA program, OWCP has implemented, at least
in part, various medical cost containment methods, including fee
schedules, utilization reviews, and managed care through
intervention of rehabilitation nurses. Under LHWCA and most
state workers' compensation programs, some of these methods, as
well as other medical cost containment measures, have also been
mandated by either law or regulation.
injured federal employees and injured employees in 25 states may
choose their treating physicians without restriction. In other
states, employees or their employers may select physicians from
state agency-approved lists of physicians.
under FECA, eligible employees with traumatic injuries are to
continue receiving their regular pay for the first 45 days they
are out of work as long as certain conditions, such as the claim
being timely filed and the employing agency not controverting
the claim, are met. FECA's 3-day waiting period for receiving
wage-loss benefits follows the 45-day continuation of pay (COP)
period. Under LHWCA and all state workers' compensation laws,
injured employees must have been absent from work for 3 to 7
days before compensation for lost wages could be initiated.
Workers covered by other workers' compensation laws who returned
to work after a few days absence following their injury would
not receive compensation for this period unless their employer
allowed them to use sick leave or other types of leave while
they were absent or provided them with salary continuation
benefits.
In addition to the differences described above, other differences
between FECA, LHWCA, and state workers' compensation programs are in
the manner in which these programs are funded and administered and
the procedures injured workers are to follow to appeal claims
decisions. Details on these and other provisions of federal and
state workers' compensation laws are discussed in appendix I.
--------------------
\4 Injured federal workers with dependents receive benefits based on
75 percent of wages.
\5 Income replacement rates compare employees' workers' compensation
benefits with their spendable earnings while they were working.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :4
In comparing FECA provisions with those of LHWCA and state workers'
compensation statutes, we relied extensively on tables of information
published by Labor and the U.S. Chamber of Commerce that covered the
50 states and D.C. We did not review state workers' compensation
laws. Other sources of information for our comparisons included the
1972 Report of the National Commission on State Workmen's
Compensation Laws, the 1973 Compendium on Workmen's Compensation,
Workers Compensation Research Institute (WCRI)\6 publications, John
Burton's Workers' Compensation Monitor, the National Conference of
State Legislators, the American Insurance Association, the Texas
Workers' Compensation Research Center, and Towers Perrin, an employee
benefits consulting firm. We did not independently verify the
information obtained from these sources.
The statutory and regulatory provisions that we compared included
those relating to benefit levels, waiting periods, physician
selection processes, medical cost containment measures, vocational
rehabilitation activities, and coverage of occupational diseases. We
also developed information on OWCP's and other jurisdictions'
adjudication processes, administrative practices, and mechanisms for
financing their workers' compensation programs. Because many
jurisdictions' workers' compensation laws contain distinctive and
unique features and because uniform reporting requirements do not
exist for workers' compensation data, we did not attempt to compare
the relative efficiency, effectiveness, or costs of each
jurisdiction's program.
For presentations on income replacement rates (see pp. 20-23) and
medical cost containment measures (see pp. 35-38), we relied
extensively on WCRI publications entitled Designing Benefit
Structures for Temporary Disability, A Guide for Policy Makers
(WCRI-89-4, Dec. 1989) and Managed Care and Medical Cost Containment
in Workers' Compensation: A National Inventory, 1995-1996
(WCRI-95-4, Dec. 1995), respectively.
We did our work in Washington, D.C. between November 1994 and
December 1995 in accordance with generally accepted government
auditing standards.
--------------------
\6 WCRI is a nonpartisan, not-for-profit research organization whose
mission is to provide objective information about public policy
issues involving workers' compensation systems.
AGENCY COMMENTS
------------------------------------------------------------ Letter :5
We requested comments on a draft of this report from the Secretary of
Labor. In a February 13, 1996, letter (see app. III), Labor's
Assistant Secretary for Employment Standards characterized the report
as a balanced summary of the provisions of FECA, LHWCA, and state
workers' compensation laws. The Assistant Secretary said that Labor
was in general agreement with the factual information contained in
the report and added that it is inherently difficult to compare one
workers' compensation system or law with another, because the
interrelationship of the various provisions has an important effect
on the outcome for individuals. Labor provided technical changes,
which we made where appropriate.
---------------------------------------------------------- Letter :5.1
We are sending copies of this report to interested congressional
committees, the Secretary of Labor, the Director of the Office of
Personnel Management, and the Director of the Office of Management
and Budget. Copies will also be made available to others upon
request. The major contributors to this report are listed in
appendix IV. If you have questions about this report, please contact
me on 202-512-8676.
L. Nye Stevens
Director
Federal Management
and Workforce Issues
COMPARISONS OF STATUTORY
PROVISIONS
=========================================================== Appendix I
The Federal Employees' Compensation Act (FECA), the Longshore and
Harbor Workers' Compensation Act (LHWCA), and the workers'
compensation statutes of all 50 states and the District of Columbia
(D.C.) authorize workers' compensation programs for employees who
suffer temporary or permanent disabilities resulting from
work-related injuries and diseases. These statutes\7 define the
benefits provided and describe program features and the manner in
which the programs are administered in various jurisdictions.
--------------------
\7 We did not review states' workers' compensation laws but relied
extensively on tables of information published by the U.S.
Department of Labor and the U.S. Chamber of Commerce that covered
the 50 states and D.C.
BENEFITS PROVIDED BY STATUTES
--------------------------------------------------------- Appendix I:1
Benefits authorized by federal and state workers' compensation
statutes include payments for (1) loss of wages when an employee
cannot work because of a work-related disability, (2) occupational
diseases, (3) schedule awards for loss of, or loss of use of, a body
part or function, (4) vocational rehabilitation, (5) death benefits
for survivors, (6) burial allowances, and (7) medical care for
injured workers. Federal and state statutes also include provisions
regarding physician selection, waiting periods, and other elements
related to the implementation and operation of workers' compensation
systems. Although most jurisdictions provide each of the above
benefits, the specifics vary.
COMPENSATION BENEFITS FOR
WAGE LOSS
------------------------------------------------------- Appendix I:1.1
All jurisdictions authorize workers' compensation benefits for loss
of wages to employees who are absent from work because they were
injured in job-related accidents or suffered from job-related
illnesses. As of January 1, 1995, FECA, LHWCA, and the laws in 44
states and D.C. paid wage-loss benefits in an amount equal to a
percentage of the injured employee's wages subject to maximum and
minimum amounts. Six states used spendable earnings\8
rather than wages as a basis for calculating wage-loss benefits.
Figure I.1 shows the different bases used by the states to calculate
wage-loss benefits. FECA, LHWCA, and D.C.'s laws use 66-2/3 percent
of wages as the basis for determining compensation amounts.
Figure I.1: Bases Used to
Calculate Wage-Loss Benefits
for Temporary Total Disability,
as of January 1, 1995
(See figure in printed
edition.)
Source: GAO analysis of Office
of Workers' Compensation
Programs (OWCP) data.
(See figure in printed
edition.)
Most jurisdictions and FECA use the same formulas for calculating
benefits for temporary total and permanent total disability. In
Ohio, Texas, and Wyoming, the bases for calculating benefits for
permanent total disability differed slightly. For example, Ohio
calculated benefits for individuals with temporary total disabilities
as 72 percent of wages. Individuals with permanent total
disabilities received benefits based on 66-2/3 percent of wages.
Both temporary and permanent disability benefits are subject to
maximums in all jurisdictions and minimums in most.
FECA and seven states also authorized additional compensation
benefits for injured employees with spouses and/or dependents. These
additional benefits are discussed beginning on page 17.
--------------------
\8 Spendable earnings for working employees are computed by taking an
employee's preinjury before-tax earnings and subtracting Social
Security taxes and federal and state income taxes. The taxes are
taken from published withholding tables that are based on average tax
rates given an employee's actual exemptions and a standard deduction.
MAXIMUM AND MINIMUM
WEEKLY BENEFITS
----------------------------------------------------- Appendix I:1.1.1
As of January 1, 1995, weekly authorized benefits for wage loss were
subject to (1) maximum amounts under FECA, LHWCA, and the laws in all
50 states and D.C., and (2) minimum amounts under FECA, LHWCA, and
the laws in 42 states, and D.C.\9
Maximum weekly benefits authorized by FECA were $1,274, which is 75
percent of the general schedule (GS) base salary of a GS-15, step 10
($1,699 per week in 1995). Maximum weekly benefits authorized by
LHWCA were $761 or 200 percent of the national average weekly wage
(AWW) of production or nonsupervisory workers on private
nonagricultural payrolls ($380 per week in 1995). Maximum weekly
benefits authorized by the statutes in 43 states (see app. II, table
II.1) and D.C. were based on a percentage of the state AWW. These
percentages ranged from 66-2/3 to 200 percent, with 21 states and
D.C. using 100 percent of their state AWW to determine maximum
benefits. In 1995, state AWW amounts ranged from $349 in South
Dakota to $702 in D.C. For the seven remaining states,\10 maximum
weekly benefit amounts were established by statute at fixed amounts.
Figure I.2 shows the maximum weekly authorized benefits as of January
1, 1995, provided for by the federal and state workers' compensation
statutes.
Figure I.2: Maximum Authorized
Weekly Benefits, as of January
1, 1995
(See figure in printed
edition.)
Note 1: The bars labeled "top fifth," etc. represent averages of
the maximum weekly benefits. For example, top fifth is the average
of the 10 states with the highest weekly benefits, second fifth is
the average of the 10 states with the second highest weekly benefits,
etc. Appendix II, table II.2 identifies the states included in each
group of states.
Note 2: Of the 50 states and D.C., Iowa and Mississippi had the
highest and lowest authorized maximum weekly benefits, respectively.
Source: GAO analysis of OWCP data.
FECA's authorized maximum weekly benefit exceeded the maximum weekly
benefits authorized by other federal and state workers' compensation
statutes because (1) FECA's base salary for computing maximum
authorized benefits was higher than the base salaries used by other
jurisdictions and (2) maximum FECA benefits include an additional
8-1/3 percent for dependent benefits.
According to OWCP, as of September 30, 1995, 171 of the 53,547 FECA
beneficiaries (about 0.3 percent) on the long-term rolls received
maximum benefits. For the year that ended June 1994, average
compensation benefits for selected beneficiaries on the long-term
compensation roll was about $22,900, or $440 per week. As of March
31, 1994, the average annual base salary for federal employees was
$38,223 or $735 per week, according to the Office of Personnel
Management. For 1995, the national AWW under LHWCA was $380.
Injured federal employees earning $735 per week with no dependents
would have been eligible to receive about $490 per week in FECA
benefits ($735 times 66 2/3 percent) and injured federal employees
with dependents would have been eligible to receive $551 per week
($735 times 75 percent).
As of January 1, 1995, the minimum weekly benefit authorized by FECA
was $197, based on the lesser of the employee's actual wage or 75
percent of the base annual salary of a GS-2, step 1 ($263). FECA's
minimum weekly benefit was greater than all but 3 of the 42 states
that have established minimum benefit amounts. According to OWCP, of
the 38,022 employees on FECA's long-term rolls as of September 30,
1995, whose benefits were not adjusted to reflect partial disability,
49 received less than minimum FECA benefits.\11
For 1995, minimum weekly benefits authorized by LHWCA were $190 or 50
percent of the national AWW of production or nonsupervisory workers
on private nonagricultural payrolls. Minimum weekly benefits
authorized by state workers' compensation laws ranged from $20 to
$283 or, actual wages if less, based on either (1) a percentage (from
15 to 60 percent of the state's AWW) or (2) some fixed dollar amount.
In many states, benefits may be limited to actual wages if the wages
are less than authorized minimums. Minimum benefits authorized by
Pennsylvania, North Dakota, and Vermont statutes exceeded FECA's
minimum. Eight states did not have statutory minimum weekly benefits
(see footnote 9). Figure I.3 shows the minimum weekly authorized
benefits provided by both federal and state workers' compensation
statutes.
Figure I.3: Minimum Authorized
Weekly Benefits, as of January
1, 1995
(See figure in printed
edition.)
Note 1: The bars labeled "top fifth," etc. represent averages of
the minimum weekly benefits. For example, top fifth is the average
for the nine states with the highest minimums, second fifth is the
average for the nine states with the second highest minimums, etc.
Appendix II, table II.3 identifies the states included in each group
of states.
Note 2: Of the 50 states and D.C., Pennsylvania had the highest
authorized weekly minimum benefit; Arkansas and Florida had the
lowest.
Source: GAO analysis of OWCP data.
--------------------
\9 Eight states (Arizona, Colorado, Maine, Michigan, Montana, Nevada,
Rhode Island, and Wyoming) did not have statutory weekly minimum
benefits.
\10 Alaska, Arizona, Georgia, Indiana, Nebraska, New York, and
Tennessee.
\11 Individuals can receive benefits less than $197 per week. For
example, OWCP could have reduced claimants' benefit amounts to
reflect partial disability by establishing a partial wage earning
capacity or benefits could be based on actual pay that was less than
the minimum. Beneficiaries for whom OWCP has established a partial
wage earning capacity are not included in this figure.
DEPENDENT BENEFITS
----------------------------------------------------- Appendix I:1.1.2
As of January 1, 1995, FECA and seven states authorized additional
compensation benefits for injured workers with dependents. FECA
benefits increased from 66-2/3 to 75 percent of wages for injured
employees with one or more dependents. Table I.1 describes
additional benefits for employees with dependents as provided for by
FECA and the seven states that authorize dependent benefits.
Table I.1
Basis for Calculating Compensation
Benefits and Additional Benefits for
Dependents, as of January 1, 1995
Effect of
Percentage of dependent
employee's Additional benefits on
wages on which benefits for a maximum
Program or benefits are spouse and/or authorized
state based dependent weekly benefit
---------------------- -------------- -------------- --------------
FECA 66 2/3 8 1/3 percent Maximum
benefit
includes
dependent
allowance
Arizona 66 2/3 $25 per month Not subject to
maximum
benefit
North Dakota 66 2/3 $10 per week Total benefits
per child not to exceed
worker's take-
home pay
Utah 66 2/3 $5 per week Total benefits
for spouse and not to exceed
each state
child authorized
maximum of
$417 per week
Vermont 66 2/3 $10 per week Total benefits
per may not exceed
child preinjury
wages
Massachusetts 60 $6 per week Dependent
per benefits paid
child if weekly
benefits do
not exceed
$150 per week
or 100 percent
of wages
Washington 60 5 percent for Total benefits
spouse and 2 not to exceed
percent for state
each child authorized
maximum of
$546 per week
Rhode Island 75\a $9 per week Total benefits
per not to exceed
child 80 percent of
worker's
preinjury wage
----------------------------------------------------------------------
\a Rhode Island's benefits were based on a percentage of spendable
income rather than wages.
Source: GAO analysis of OWCP data.
Because additional dependent benefits under FECA are based on a
percentage of wages, higher paid employees would receive a larger
dependent benefit. For example, the additional dependent benefit for
a GS-13, step 1 employee would be about $78 per week in 1995, while
the dependent benefit for a GS-5, step 1, employee would be about $30
per week.
BENEFIT LEVEL ADJUSTMENTS
----------------------------------------------------- Appendix I:1.1.3
In most jurisdictions, maximum and minimum benefit amounts change
periodically because (1) AWW amounts change, (2) cost-of-living
adjustments take place, or (3) legislation affecting benefit amounts
is enacted. FECA's maximum and minimum authorized benefits have
generally increased each year due to federal salary increases or
cost-of-living adjustments. Under LHWCA, the national AWW for
nonagricultural workers has been adjusted annually. D.C. and 40
states (see app. II, table II.4) adjust their AWW at least once a
year. Oklahoma makes the adjustment every 3 years, and Delaware
adjusts its AWW at the discretion of the governor. Benefits in the
remaining states are not tied to AWWs.
According to the U.S. Chamber of Commerce, as of January 1, 1995,
FECA, LHWCA, 13 states (see app. II, table II.5), and D.C.
authorized automatic cost-of-living increases for beneficiaries who
had been receiving benefits for a specified time period. For
example, FECA's annual cost-of-living adjustment becomes effective
March 1 after beneficiaries have had a compensable disability for at
least 1 year. LHWCA and statutes in Illinois, Maryland,
Massachusetts, and Rhode Island provide cost-of-living increases only
to beneficiaries with permanent total disabilities. In recent years,
some states (Connecticut, Hawaii, and Maine) have discontinued the
practice of providing automatic cost-of-living increases.
Maximum and minimum benefit amounts could also change through
legislation. According to Labor, between 1991 and 1994, three states
that did not automatically adjust their AWW--California, Georgia, and
Nebraska--enacted legislation to increase their maximum benefit
amounts. Three states that regularly adjusted their AWW--Minnesota,
Oklahoma, and Virginia--increased their maximum authorized benefits
by increasing the percentage of the state AWW on which the maximums
were based. Further, one state--Connecticut--that regularly adjusted
its AWW enacted legislation that decreased its maximum authorized
benefits by decreasing the percentage of the state AWW on which the
maximum was based. Benefit level changes in these states were part
of comprehensive reform of their state workers' compensation
statutes. Other issues addressed in these reforms related to medical
cost containment, returning injured employees to work, workers'
compensation fraud, and job safety.
DURATION OF WAGE-LOSS
BENEFITS
----------------------------------------------------- Appendix I:1.1.4
Most jurisdictions pay wage-loss benefits to injured employees for
the duration of their disability. As of January 1, 1995, FECA,
LHWCA, 34 states (see app. II, table II.6) and D.C. were paying
employees with temporary total disabilities wage-loss benefits for
the duration of their disability. In 16 states (see app. II, table
II.7), the number of weeks an injured employee could receive benefits
for temporary disability was limited to between 100 and 500 weeks.
If employees continued to be disabled after the limit was reached in
states with limits, they could have their temporary total wage-loss
benefits terminated or be moved to the permanent disability rolls.
If an employee was permanently and totally disabled, all
jurisdictions, except three states, could pay wage-loss benefits for
the duration of the disability until death. In Mississippi, South
Carolina, and Tennessee the duration of wage-loss benefits is limited
either to (1) maximums ranging from 400 to 500 weeks, (2) age 65, or
(3) specified dollar amounts. According to staff from these states,
after limits have been reached, injured employees would no longer be
entitled to workers' compensation benefits. These employees might
then be entitled to Social Security benefits or other
employer-provided benefits.
INCOME REPLACEMENT RATES
----------------------------------------------------- Appendix I:1.1.5
In addition to comparing the dollar value of benefits, another method
of comparing federal and state benefit provisions uses income
replacement rates. These rates reflect the percentage of a worker's
after-tax income (spendable earnings) that is replaced by workers'
compensation benefits. Whether income replacement rates for injured
federal employees are similar to or greater than income replacement
rates of workers covered by other jurisdictions' workers'
compensation programs depends, in large part, on (1) whether federal
workers have a dependent or (2) a worker's wages.
Income replacement rates\12 for federal employees without dependents
are the same as rates for employees in other jurisdictions\13 that
use 66-2/3 percent of wages as the basis for determining compensation
benefits, at least up to the point at which employees' wages are in
amounts which would result in authorized maximum benefits. Injured
federal employees who receive workers' compensation benefits based on
75 percent of salary because they are married or have at least one
dependent have higher income replacement rates than their
counterparts in other jurisdictions whose benefits are based only on
66-2/3 percent of wages.
FECA's authorized maximum benefits are greater than the maximums
authorized under other jurisdictions' workers' compensation laws. As
such, eligible federal employees with higher salaries have more of
their after-tax income replaced by workers' compensation wage-loss
benefits than workers residing in the same jurisdiction who were paid
the same and whose benefits were affected by the states' authorized
maximum benefit levels. When employees earn wages that are greater
than the wages needed to be eligible for maximum benefits, income
replacement rates begin declining because increases in workers' wages
and spendable incomes do not result in larger workers' compensation
benefits.
Table I.2 shows annual salary equivalents to receive maximum weekly
workers' compensation wage-loss benefits for employees covered by
FECA, LHWCA, and selected state workers' compensation laws.
Table I.2
Annual Salary Equivalents for Employees
to Receive Maximum Weekly Workers'
Compensation Benefits (various
jurisdictions)
Annual salary
Maximum Bases for equivalent
weekly computing needed to
workers' maximum receive
compensati compensation maximum
Jurisdiction on benefit benefits benefits\a
-------------------------- ---------- -------------- --------------
FECA $1,274 75 percent of $88,326
base pay for
GS-15, step 10
($1,699)
LHWCA 761 200 percent of 59,349
national AWW
($380) for
nonagricultura
l workers
Iowa\b 817 200 percent of 53,105\a\
state AWW
($409)
Average for 10 states with 663 Various-- $40,950 to
highest maximums ranging from $57,362
100 percent of
state AWW to
200 percent of
state AWW
Average for 10 states with 311 Various-- $19,702 to
lowest maximums ranging from $27,222
66-2/3 percent
of state AWW
to 100 percent
of state AWW
Mississippi\b 253 66-2/3 percent $19,702
of state AWW
($379)
----------------------------------------------------------------------
\a For states such as Iowa that use spendable earnings as the basis
for computing workers' compensation benefits, annual salaries would
be greater than the amounts used to compute maximum workers'
compensation benefit amounts.
\b States with the highest and lowest maximum weekly benefits,
respectively.
Source: GAO computations based on OWCP data.
For those jurisdictions that base their workers' compensation
benefits on a percentage of wages, income replacement rates increase
as wages increase because workers' compensation benefits are not
subject to income taxes and the differential between spendable
earnings and workers' compensation benefits narrows. Table I.3 shows
that income replacement rates for higher-paid federal employees are
greater than the rates of most lower-paid federal employees\14
because higher-paid federal employees have a higher percentage of
their after-tax income replaced with untaxed workers' compensation
benefits.
Table I.3
FECA Income Replacement Rates for
Different Size Families
---------------------- ------ ------ ------ ------ ------ ------
Salary $20,00 $40,00 $20,00 $40,00 $20,00 $40,00
0 0 0 0 0 0
Less:
Federal income taxes 2,062 6,492 1,312 4,312 577 3,577
Federal Employee 1,690 3,380 1,690 3,380 1,690 3,380
Retirement System
(FERS) deductions
State income Amount deducted depends on state of residence\a
taxes
----------------------------------------------------------------------
Spendable earnings 16,248 30,128 16,998 32,308 17,733 33,043
FECA benefits 13,334 26,667 15,000 30,000 15,000 30,000
Income replacement 82.07 88.52 88.25 92.86 84.59 90.80
rates
----------------------------------------------------------------------
\a State income tax deductions reduce spendable earnings and increase
income replacement rates.
Source: GAO computations based on 1994 federal income tax tables and
FERS deductions of 8.45 percent of pay.
At higher salary levels, workers' compensation benefits may actually
exceed spendable income. In these cases, income replacement rates
would be greater than 100 percent. In general, income replacement
rates of over 100 percent occur when injured employees (1) with low
pay receive workers' compensation benefits that are affected by the
jurisdictions' minimum benefit level or (2) in the higher tax
brackets receive nontaxable workers' compensation benefits that are
based on salaries. For example, a married federal employee living in
Virginia earning $60,000 annually who is injured on the job would be
eligible to receive nontaxable FECA benefits of $45,000. If this
employee had not been injured, he or she would have received
take-home pay for workers' compensation purposes\15 of $43,407
($60,000 less deductions for (1) FERS benefits ($5,070), (2) state
income tax withholdings ($2,813), and (3) federal income tax
withholdings ($8,710). In this example, the income replacement rate
(FECA benefits divided by take-home pay) is nearly 104 percent.
Six states use spendable earnings as the basis for computing workers'
compensation benefits. In these states, unless benefit levels are
affected by a statutory minimum, injured workers' income replacement
rates are less than 100 percent of spendable earnings. In addition,
income replacement rates are the same for employees whose rates are
not affected by minimums or maximums, even though their salaries are
different because benefits are based on the same percentage of
spendable earnings.
The "correct" level of workers' compensation wage-loss benefits has
been argued by observers and legislators for decades. If workers'
compensation benefits replace too much after-tax income, there are
disincentives to returning to work following recovery from a
job-related injury. If workers' compensation benefits do not replace
enough after-tax income, injured workers and their families could
suffer economic hardships. The 1972 Report of the National
Commission on State Workmen's Compensation Laws recommended that,
subject to a state's maximum weekly benefit, workers' weekly benefits
replace at least 80 percent of spendable weekly earnings. A 1985
WCRI publication indicated that as benefits increased following the
National Commission's report, an issue arose on whether benefits were
so high that incentives for injured employees to return to work might
be impaired. According to WCRI, legislatures in many states must
walk a fine line between benefits that are high enough to provide
adequate income but not so high as to discourage return to work.
--------------------
\12 In developing income replacement rate information for federal
employees, we did not use all the information that the Workers
Compensation Research Institute (WCRI) used because of the detailed
information that would have been required. For example, we did not
consider state and local income taxes, waiting periods, continuation
of pay provisions, the effects of not receiving pay for days absent
from work, or average numbers of days of disability for federal
workers. To the extent that the above information is not considered,
income replacement rates would be affected. For example, if state
income taxes are considered, take-home pay decreases and income
replacement rates increase.
\13 Assuming wages and deductions for income and social security
taxes were the same.
\14 Some injured federal employees who receive wage-loss benefits
based on FECA's authorized minimum benefit amounts would also be
likely to receive workers' compensation benefits that exceed their
after-tax income.
\15 Actual take-home pay could be different.
OCCUPATIONAL DISEASE
COVERAGE
------------------------------------------------------- Appendix I:1.2
Although workers' compensation laws initially did not specify
provisions for occupational diseases, all jurisdictions now recognize
them as compensable injuries. However, legal standards that must be
met before compensation benefits can be approved for some
occupational diseases vary among jurisdictions.
Several of the more common occupational diseases for which workers'
compensation benefits are paid include asbestosis and pulmonary
diseases, hearing loss, skin diseases, carpal tunnel syndrome, heart
conditions, and psychiatric illnesses. OWCP defines occupational
diseases as conditions produced in the work environment over a longer
than 1-workday shift. Occupational diseases may result from (1)
systemic infection; (2) repeated stress or strain; (3) exposure to
toxins, poisons, fumes, or other continuing conditions of the work
environment.
Workers' compensation benefits for occupational diseases can vary
significantly from the benefits that are paid for traumatic injuries
depending on the date a jurisdiction uses to determine benefit
amounts. Under FECA,\16 LHWCA, and about two-thirds of the states'
laws (see app. II, table II. 8), benefit amounts are based on a
worker's wages as of the date of disability or knowledge or
manifestation of the disease. In the remaining states, benefits are
determined as of the date of last exposure or last injurious
exposure. These benefits could be significantly less than benefits
for traumatic injuries because long latency periods may exist between
the time the employee was last exposed to the conditions that caused
the disease and the time of disease onset.
The judicial treatment of selected occupational diseases, such as
those associated with job-related stress\17 can also vary depending
on such factors as the type of disability an employee has suffered,
the laws of the jurisdictions in which the employee lived, and how
the courts have interpreted these laws.
For example, even though FECA does not specifically mention stress as
a covered occupational disease, OWCP treats a job-related stress
claim as a compensable injury as long as the claimed condition is
causally related to factors of federal employment and is not
self-generated and therefore not compensable.\18 Similarly, 29 states
(see app. II, table II.9) and D.C. provide for the compensability
of job-related stress based on case law rather than specific
statutory provisions, according to information from the National
Conference of State Legislatures. The remaining states impose
specific statutory restrictions with respect to compensability for
stress claims. For example, according to the National Conference of
State Legislatures, six states\19 specifically exclude stress as a
compensable disease if it was related to a lawful personnel action
such as a performance rating or reduction-in-force. Five states
(Alaska, Arizona, California, Louisiana, and Maine) also specify
statutorily that stress must be extraordinary and must be related to
employment conditions. The remaining 11 states\20 have specific
statutory restrictions on occupational disease claims ranging from
excluding injuries that occur as a result of nonphysical stimulus or
activity to mental conditions that must be permanent in nature.
Although FECA does not contain specific statutory language that would
impose restrictions on the compensability of stress claims, the
general requirement that an injury be causally related to employment
factors (particularly as this is interpreted through ECAB case law)
effectively eliminates coverage for stress arising out of such
legitimate personnel actions as promotions and performance
appraisals.
Occupational disease rates in the federal and private sectors range
from about 10 to 14 percent of job-related injuries. FECA statistics
show that 12.6 percent of the nearly 187,700 cases created in
calendar year 1992 were occupational disease cases\21 and that claims
for job-related stress conditions were one of the most frequently
mentioned categories of occupational disease claims filed.
Occupational disease statistics are not maintained for employees
covered under LHWCA. The Bureau of Labor Statistics (BLS) reported
that in 1992, nearly 9.6 percent of the 2.3 million nonfatal
occupational injuries and illnesses with days away from work in
private industry involved occupational diseases. We recognize that
comparisons of different jurisdictions' injury rates should be viewed
with caution because differences exist between the federal and
private sector in terms of the kinds of jobs that are available and
the number of employees in these jobs.
--------------------
\16 Unlike employees covered by FECA who suffer traumatic injuries,
employees who file claims for occupational diseases are not entitled
to continuation of pay (COP) benefits for the first 45 days of
absence from work.
\17 Job-related stress can cause physical symptoms such as
exhaustion, ulcers, headaches, and hypertension or certain
psychological injuries such as post-traumatic stress disorder and
depression.
\18 According to the FECA procedure manual, the distinction between a
"factor of employment" and a "self-generated" factor can be difficult
to make. The Employees' Compensation Appeals Board (ECAB) has ruled,
in a number of cases, on work-related events that are not factors of
employment.
\19 Maine, Massachusetts, New Mexico, New York, North Dakota, and
Texas.
\20 Colorado, Florida, Michigan, Minnesota, Montana, New Hampshire,
Ohio, Oregon, Rhode Island, Washington, and Wisconsin.
\21 In fiscal years 1993 and 1994, OWCP reported that occupational
disease cases represented 13.8 and 13.5 percent, respectively, of the
cases created in those years.
SCHEDULE AWARDS
------------------------------------------------------- Appendix I:1.3
As of January 1, 1995, FECA, LHWCA, and the workers' compensation
statutes in 38 states (see app. II, table II.10) and D.C. contained
specific language that authorized schedule awards for the permanent
loss of, or loss of use of, specific body parts. While the remaining
12 states (app. II, table II.11) also authorized compensation for
such losses, the award amounts were not based on specific schedules.
Schedule awards are so named because the statutes contain lists that
specify the number of weeks' compensation that will be awarded to
employees for the permanent loss of, or loss of use of, a specific
body part (e.g., hand, arm, leg). For example, under FECA, federal
employees who lose their hand, or use of their hand, in a
work-related accident would be eligible to receive compensation
payments equal to 66-2/3 percent of their salary (75 percent if they
have one or more dependents) for 244 weeks. Schedule awards may be
prorated for partial losses of a permanent nature. For example,
employees who have suffered some permanent restriction in leg motion
as a result of a job-related leg injury would be eligible to receive
a schedule award for that portion of the loss of use of the leg.
The 12 states without statutory schedules also authorized
compensation for loss of, or loss of use of, body parts.
Compensation amounts in these 12 states were calculated (1) as a
percentage of permanent total disability, (2) as a degree of
impairment of the body part, (3) on the basis of a wage-loss formula,
(4) on the basis of the state AWW and paid in a lump sum, or (5) as
fixed sums for specified injuries. For example, Massachusetts' law
provided for lump-sum payments, which are determined by multiplying
the state AWW by a certain number specified in the law, depending on
the affected body part. Thus, a worker in Massachusetts who loses an
arm, or loses the use of an arm, would be eligible to receive the
state AWW ($585.67) multiplied by 43 ($25,184 as of January 1, 1995).
In Washington, workers who lose a hand (or the use thereof) would be
eligible to receive a fixed amount specified in the law ($65,962 as
of January 1, 1995) in monthly payments or a lump-sum payment.
Under FECA, LHWCA, the laws in D.C., and the 38 states with statutory
schedules, schedule award amounts authorized to be paid to injured
employees would vary, depending on the part of the body that is
affected and the employees' wages at the time of injury. Under FECA,
for example, an employee with a spouse and/or dependent(s) and an
annual salary of $13,650 (GS-2, step 1) would be eligible to receive
a schedule award totaling $61,425 over a 312-week period for the
permanent, total loss of use of an arm. An employee with a spouse
and/or dependent(s) and an annual salary of $88,326 (GS-15, step 10)
would be eligible to receive a schedule award totaling $397,469 over
the same 312-week period.
Like wage-loss benefits, maximum authorized schedule awards for
injured federal employees were generally higher than maximum
authorized schedule awards for nonfederal employees covered by other
workers' compensation statutes, because the maximum compensation
amounts on which schedule awards are based were greater under FECA.
For example, schedules under FECA and New York's statute specified
that loss of an arm would result in 312 weeks of compensation.
Because the maximum authorized weekly benefit under FECA in 1995 was
$1,274, the FECA maximum award for loss of an arm was $397,469
($1,274 for 312 weeks). In New York, where the maximum authorized
weekly benefit was $400 in 1995, the maximum schedule award for loss
of an arm would have been $124,800 ($400 for 312 weeks). However,
schedule awards for employees whose earnings did not reach the
maximum levels would have been more similar. For example, the 1995
compensation rate for an employee earning $500 per week in New York
and a federal employee with no dependents earning $500 per week would
be $333 per week (66-2/3 percent of $500). These two employees would
have each been eligible to receive the same schedule award of
$104,000 paid over 312 weeks (66-2/3 percent of $500 for 312 weeks).
In some jurisdictions, maximum authorized amounts for schedule awards
varied because of differences in the number of weeks of compensation
authorized for the same injury. For example, both Arizona and
Louisiana authorized the same maximum weekly compensation benefits
for employees who lost arms as the result of work-related accidents
($323 as of January 1, 1995). However, Arizona authorized
compensation benefits for 260 weeks up to a maximum of $83,980 ($323
for 260 weeks), while Louisiana authorized benefits for 200 weeks or
a maximum of $64,600 ($323 for 200 weeks). Figure I.4 shows the
number of weeks authorized for payment of selected schedule awards
under FECA, LHWCA, and the 38 states and D.C.
Figure I.4: Maximum Number of
Weeks for Benefits for Schedule
Awards, as of January 1, 1995
(See figure in printed
edition.)
Note 1: The bars labeled "Average:..." represent averages of the
maximum authorized schedule awards for the 38 states and D.C. For
example, "Average: top fourth..." is the average of the 10 states
with the highest authorized schedule award amounts.
Note 2: Of the 38 states, 7 did not have statutory schedules for
hearing loss in 1 ear. Appendix II, table II.12 identifies the
states included in each group of states.
Source: GAO analysis of OWCP data.
According to the information we reviewed, both federal and nonfederal
employees may continue to receive schedule awards as well as their
regular pay when they return to work. As of January 1, 1995, under
federal and most nonfederal workers' compensation programs, injured
employees receive wage-loss benefits for the initial period of
disability (the healing period). Subsequently, schedule awards would
be paid to these employees for their permanent impairments. In four
states--Delaware, New Hampshire, North Dakota, and Rhode
Island--schedule awards are to be paid concurrently with wage-loss
benefits for the same injury. In three states (Louisiana, Michigan,
and Oklahoma), wage-loss benefits for the initial periods of
disability are deducted from schedule award amounts. Under FECA and
LHWCA programs and, according to Larson, Workmen's Compensation Law,
some state programs, awards for actual wage loss are made when wage
loss in fact persists after the expiration of the schedule award
period.
VOCATIONAL REHABILITATION
------------------------------------------------------- Appendix I:1.4
All jurisdictions provide vocational rehabilitation benefits. Both
FECA and LHWCA specify that vocational rehabilitation services may be
provided only to permanently disabled workers. As of 1993, workers'
compensation statutes in 43 states (see app. II, table II.13) and
D.C. specifically addressed vocational rehabilitation; such services
were also available in the other 7 states.\22
Both federal and state workers' compensation programs emphasize
returning employees to work with their original employers.\23
Under FECA and LHWCA, if the original employer cannot accommodate the
employee, vocational rehabilitation services, including testing,
counseling, training, and placement assistance, are authorized.
Rehabilitation specialists in OWCP district offices oversee
rehabilitation activities, which are generally provided by private
sector contractors.\24 Under both FECA and LHWCA, employees in
vocational rehabilitation programs can receive wage-loss compensation
benefits as well as a maintenance allowance for the cost of
transportation, meals away from home, and other program-related
expenses. Payment of compensation at the total rate is mandated by
FECA while the employee is in an approved rehabilitation program.
States also emphasize returning employees to work with their original
employers. Vocational rehabilitation services available to employees
covered by state workers' compensation statutes are generally
provided through private rehabilitation firms, public rehabilitation
agencies, or state workers' compensation agencies. The services
provided include assessment, counseling, training, labor market
analysis, and placement. Some states offer financial incentives to
employers to induce them to hire injured workers, including (1)
providing reimbursement to employers for some or all job site
modification and on-the-job training costs and (2) offering workers'
compensation premium discounts to employers who hire or rehire
injured workers.
As part of its effort to return injured federal employees to the
workforce, OWCP administers a program called the Assisted
Reemployment Project. Congress authorized this demonstration project
in Labor's fiscal year 1992 appropriations bill. According to OWCP,
the program is mainly confined to a small number of cases--those
involving injured but motivated employees who face special obstacles
to reemployment and cannot be placed through routine vocational
rehabilitation and placement efforts. Under this program, OWCP may
reimburse an employer (other than the original employer) for up to 3
years for a portion of the injured federal employee's salary. OWCP
placed 153 of the 207 participating employees by the end of fiscal
year 1994. According to a Texas Workers' Compensation Research
Center study,\25 some states also authorize employer subsidies.
Whether participation in vocational rehabilitation is mandatory or
voluntary is subject to much discussion by workers' compensation
experts and may depend on whose views are considered--employees or
employers. According to the Texas Workers' Compensation Research
Center study, as of 1993, vocational rehabilitation services provided
to injured employees would be considered mandatory in 14 states\26
and D.C. In these jurisdictions, eligible injured workers are
required to cooperate with vocational rehabilitation efforts,
including placement assistance, or risk losing their wage-loss
benefits. Employers and/or their insurance carriers are typically
required to pay for the services if the injured worker needs such
services to become employable.
In the states where vocational rehabilitation would be considered
voluntary, the employer or insurance carrier is not obligated to pay
for the services. However, the study said that some employers and
carriers voluntarily finance short-term vocational rehabilitation
services because of potential cost savings they may realize by
returning injured employees to work as soon as possible. According
to the Texas study, at least one of the states in which vocational
rehabilitation is considered voluntary--Texas--may restrict wage-loss
benefits for employees who do not cooperate with prescribed efforts
to rehabilitate them to return to work.
Under FECA, federal employees who refuse to cooperate in vocational
rehabilitation programs or to make good faith efforts to obtain
reemployment face the possible reduction or termination of their
compensation benefits by OWCP. LHWCA does not have such a provision.
--------------------
\22 Colorado, Delaware, New Mexico, Pennsylvania, South Carolina,
Tennessee, and Wyoming.
\23 FECA provides that if federal employees overcome their
disabilities within 1 year of the date compensation begins, their
former federal employers must allow them to resume their former
positions or their equivalents. If recovery occurs after 1 year has
passed, former federal employing agencies must generally give
employees priority placement consideration in their former or
equivalent positions or make reasonable efforts to place them in
other federal departments or agencies.
\24 OWCP's vocational rehabilitation efforts for FECA beneficiaries
are discussed more thoroughly in our report Federal Employees'
Compensation Act: Need to Increase Rehabilitation and Reemployment
of Injured Workers (GAO/GGD-92-30, Feb. 28, 1992).
\25 Return-to-Work Programs for Texas Workers' Compensation
Claimants: Suggested Design Parameters, January 1995. The study was
prepared for the Texas Workers' Compensation Research Center, a state
agency established by the Texas legislature to conduct fair and
unbiased research and produce information relevant to workers'
compensation issues.
\26 Alabama, Kentucky, Louisiana, Maine, Massachusetts, Michigan,
Missouri, Montana, New Hampshire, Oklahoma, Oregon, Rhode Island,
Vermont, and Virginia
DEATH BENEFITS
------------------------------------------------------- Appendix I:1.5
All federal and state workers' compensation statutes authorize death
benefits to the surviving spouse and children of an employee whose
death results from a job-related injury or illness. As of January 1,
1995, compensation benefits paid to eligible surviving spouses and
children were generally calculated as a percentage of the deceased
employees' wages (ranging from 32-1/2 percent of wages for a
surviving spouse in Louisiana to 80 percent of wages for a surviving
spouse and children in Delaware and Rhode Island), subject to maximum
and minimum amounts.
FECA, LHWCA, 22 states (see app. II, table II.14), and D.C.
authorized additional benefits to surviving spouses with children.
The amount of benefits authorized by 28 states (see app. II, table
II.15) were the same regardless of whether the deceased employee was
survived only by a spouse or a spouse and children. Death benefits
are generally paid to an eligible spouse until remarriage and to the
children until a specified age. Figure I.5 shows the bases
jurisdictions use to calculate death benefits.
Figure I.5: Bases Used to
Calculate Death Benefits in the
States and D.C., as of January
1, 1995
(See figure in printed
edition.)
Note: Appendix II, tables II.16 and II.17 identify the states.
\a Under FECA and LHWCA, death benefits for a surviving spouse only
were 50 percent of wages.
\b Under FECA, death benefits for a surviving spouse and one child
were 60 percent and for a surviving spouse with two or more children
were 75 percent. Under LHWCA, benefits for a surviving spouse with
one child or more were 66 2/3 percent of wages.
Source: GAO analysis of OWCP data.
BURIAL ALLOWANCES
------------------------------------------------------- Appendix I:1.6
As of January 1, 1995, FECA, LHWCA, and the workers' compensation
statutes of 47 states (see app. II, table II.18) and D.C.
authorized benefits for burial expenses (subject to specific maximum
amounts) if an employee's death was the result of a work-related
injury or illness. In the remaining three states (New York,
Oklahoma, and Utah), burial benefits were authorized, but the
statutes did not specify maximum amounts. As of January 1, 1995,
maximum burial allowances authorized under FECA and LHWCA were $800
and $3,000 respectively, while maximum allowances authorized by the
statutes of the 47 states and D.C. ranged from $700 to $7,500.
FECA's burial allowance benefit was lower than all but Delaware's.
FECA and five states (Kentucky, Idaho, Nevada, South Dakota, and
Virginia) authorized additional payments for transporting the
decedent's body to the residence or place of burial. Figure I.6
shows the maximum burial allowances authorized by the state workers'
compensation statutes.
Figure I.6: Maximum Burial
Allowances, as of January 1,
1995
(See figure in printed
edition.)
Source: GAO analysis of OWCP data.
MEDICAL BENEFITS AND COST
CONTAINMENT MEASURES
------------------------------------------------------- Appendix I:1.7
FECA, LHWCA, and most state workers' compensation statutes provide
for medical services for work-related injuries and illnesses.\27 As
of January 1, 1995, FECA, LHWCA, and the statutes in 45 states (see
app. II, table II.19) and D.C. provided for full medical benefits
for work-related injuries or illnesses with no limitations on amounts
or time. The remaining five states (Arkansas, Florida, Montana, New
Jersey, and Ohio) provided for almost unlimited medical care but had
special provisions such as requiring copayments from employees after
a specified time or imposing a maximum amount for medical benefits
unless the employer elects to extend the dollar amount. For example,
Florida required a $10 copayment for all medical services after
maximum medical improvement was reached.
--------------------
\27 Medical services include examination, treatment, and related
services, such as hospitalization, medications, medical equipment,
and supplies.
MEDICAL COST CONTAINMENT
MEASURES
----------------------------------------------------- Appendix I:1.7.1
In an attempt to control the rate of growth of workers' compensation
medical expenditures, which, generally during the 1980s and
particularly from 1985 to 1990, had been increasing faster than
national health expenditures, the federal government and many states
initiated or planned to initiate medical cost containment
measures.\28 The measures included (1) medical fee schedules; (2)
bill reviews; and (3) managed-care programs, which include
utilization reviews, health maintenance organizations (HMO),
preferred provider organizations (PPO), and 24-hour coverage.\29
Limiting an employee's choice of medical services provider is also
considered a cost containment measure by some workers' compensation
experts and is discussed in more detail starting on page 38.
--------------------
\28 Much of the information presented here on cost containment
measures in the states is from WCRI's Managed Care and Medical Cost
Containment in Workers' Compensation: A National Inventory,
1995-1996, which contains information on initiatives in place or
planned as of January 1995.
\29 WCRI's December 1995 report on managed care and medical cost
containment contains comprehensive information on states' managed
care policies.
MEDICAL FEE SCHEDULES
----------------------------------------------------- Appendix I:1.7.2
OWCP uses a fee schedule to establish maximum allowable charges for
most medical services provided to injured federal employees. OWCP's
medical fee schedule is also used in LHWCA cases to determine
criteria for reasonable and customary medical charges when there are
disputes. According to WCRI, as of January 1995, 41 states (see app.
II, table II.20) used or were developing medical fee schedules that
listed maximum reimbursement levels for health care services provided
by hospitals, physicians, or other practitioners.
The methodology for developing reimbursement levels, coding schemes
to identify procedures, the services covered, and the frequency of
fee schedule updates vary widely among the jurisdictions. For
example, fee schedules may express fees as dollar amounts or relative
value units with dollar conversion factors.\30 Some jurisdictions
have an all inclusive fee schedule for hospital and nonhospital care.
OWCP's fee schedule for FECA claimants covers services provided by
physicians or other medical professionals in a hospital or nursing
home but does not cover inpatient services and supplies provided and
billed by hospitals. OWCP is in the process of developing fee
schedules for hospital services and pharmaceuticals.
Evidence that fee schedules are effective in controlling medical
costs is contradictory. Advocates argue that fee schedules control
prices for medical services, and thus, should slow down the rate of
growth of these prices. Others have cautioned that physicians may
react to price controls by increasing the number of services
performed. Studies on the effect of fee schedules on workers'
compensation costs have had different outcomes. The results of one
study of 17 states (see app. II, table II.21), based on over 350,000
workers' compensation claims with dates of injury from 1979 to 1987,
suggest that states with fee schedules have health expenditures that
are almost 4 percent lower than states without fee schedules.\31
However, the study's author noted that there was considerable
variation in both the magnitude and direction of the impact of fee
schedules on medical cost growth from year to year, and average
growth rates were only slightly higher in states without fee
schedules. A 1989 WCRI study concluded that fee schedules have had
no effect on average medical costs.
--------------------
\30 Medical services receive a value that reflects, relative to other
services, the work and other services needed to furnish it. The
values are adjusted for relative geographic differences in the costs
of inputs, such as staff salaries and office rental costs.
\31 Health Care Costs in Workers' Compensation Programs: An
Assessment of Cost Containment Policy Initiatives (Cornell
University, 1993), a dissertation by Silvana Pozzebon and summarized
in John Burton's Workers' Compensation Monitor, May/June 1993.
BILL REVIEWS
----------------------------------------------------- Appendix I:1.7.3
Neither FECA nor LHWCA mandate bill review procedures. According to
WCRI, as of January 1995, 16 states (see app. II, table II.22) had
bill review programs in place. In these 16 states, (1) the workers'
compensation agency routinely examined all medical bills or bills
that met specific criteria to verify their conformance to fee
schedules or (2) state law mandated that payers examine bills.
Although FECA does not require specific bill review procedures,
OWCP's automated medical bill pay system is designed to (1) check all
bills for duplicates, (2) check to ensure that the procedures being
paid for relate to the claimant's diagnosis, (3) ensure that only
authorized providers are paid, and (4) ensure that bills are paid
according to the OWCP fee schedule.
UTILIZATION REVIEWS
----------------------------------------------------- Appendix I:1.7.4
FECA and LHWCA do not mandate the use of utilization reviews--which
assess the necessity and appropriateness of admissions and
procedures, lengths of hospitalizations, and consultations by
specialists before, during, or following an inpatient admission--as a
means for controlling medical costs. As of January 1995, 22 states
(see app. II, table II.23) had implemented or were developing
utilization review programs, which typically covered inpatient
hospital care, according to WCRI. Utilization reviews may be part of
an overall managed-care program, which seeks to ensure the necessity
of treatment and to deliver care cost effectively.
State workers' compensation statutes can prohibit, authorize,
encourage, or mandate utilization review. WCRI considered
jurisdictions to have a utilization review program if (1) the
workers' compensation statutes mandated that payers review claims for
proper medical utilization, (2) the workers' compensation agency
reviewed the utilization of medical care for all claims or for those
claims where benefits or time lost from work had reached certain
levels, or (3) the state agency reviewed utilization on a regular
basis.
Although FECA does not specifically mandate utilization reviews as
such, OWCP does use a type of utilization review in some cases.
Since the beginning of fiscal year 1994, all FECA district offices
have used registered nurses to intervene in disability cases. More
recently, OWCP's Boston and Kansas City district offices have been
testing the use of nurses during the COP period. Nurses are to be
assigned to cases that have the potential for long-term disability
and are to immediately begin working with the injured employee to
ensure proper medical management of the case and a safe return to
work at the earliest possible time.
USE OF HMOS AND PPOS
----------------------------------------------------- Appendix I:1.7.5
FECA and LHWCA do not address the issue of using HMOs or PPOs.
According to OWCP, as of October 1994, the use of HMOs/PPOs for
workers' compensation medical services was authorized by statute,
employer, or insurer in at least 33 states (see app. II, table
II.24). In the HMO/PPO setting, primary care physicians generally
control the health care services provided to their patients by
serving as gatekeepers who are responsible for making referrals to
all other health care providers.\32
Towers Perrin, a national employee benefits consulting firm, surveyed
employers about their use of workers' compensation cost containment
measures. The respondents were 1,050 private and local government
employers representing 8.2 million employees. The survey found that
the use of HMOs and PPOs by the respondents jumped from 20 percent in
1991 to 50 percent in 1993.\33
--------------------
\32 WCRI defines managed care as a program, or more specifically, an
organization, referred to as a managed care organization, that seeks
to deliver cost-effective and quality care. These organizations,
which may include HMOs and PPOs, often employ case management,
utilization review, bill review, and other programs as part of the
services they provide.
\33 Regaining Control of Workers' Compensation Costs: The Second
Biennial Towers Perrin Survey Report, 1993, p. 7.
24-HOUR COVERAGE
----------------------------------------------------- Appendix I:1.7.6
Twenty-four hour coverage plans were not widely used in any of the
jurisdictions. These plans integrate the medical component of
workers' compensation insurance with health insurance for off-work
injuries, resulting in plans that would cover injured workers around
the clock, regardless of the origin of their impairments. According
to a 1993 article in a health policy issues journal, some states had
considered 24-hour coverage plans and passed legislation authorizing
such plans on a pilot basis, although 24-hour coverage had not been
implemented in any state. OWCP reported in 1994 that California had
authorized 24-hour pilot programs for a 3-year period beginning in
1994.
PHYSICIAN SELECTION
------------------------------------------------------- Appendix I:1.8
As of January 1, 1995, FECA, LHWCA, and 25 states (see app. II,
table II.25) allowed injured employees to choose their initial
physician or medical care provider without restriction. The other 25
states (app. II, tables II.26 and II.27) and D.C. restricted
employees' initial choice of medical care provider. Figure I.7 shows
the method of initial physician selection provided for by the state
workers' compensation statutes in the states and D.C.
Figure I.7: Method of Initial
Physician Selection Provided
for by the Workers'
Compensation Statutes in the
States and D.C., as of January
1, 1995
(See figure in printed
edition.)
Source: GAO analysis of OWCP data.
In 5 of the 17 states where the employer chooses the initial
provider, the state agency may change the medical provider on the
basis of an employee's appeal, petition, or request. In 4 of these
17 states, the employee may change the selection after a specified
time period.
WCRI considers the practice of limiting employees' choice of medical
provider as a medical cost containment measure and that the
effectiveness of HMOs/PPOs as a cost control measure is seriously
reduced if there is unlimited initial choice. The 1972 Report of the
National Commission on State Workmen's Compensation Laws recommended
that workers be permitted the initial selection of physicians, either
from among all licensed physicians in the state or from a panel of
physicians selected or approved by the state workers' compensation
agency.
Policymakers, insurers, and others have argued that limiting
employees' choice of physician will help control costs by steering
injured workers to providers who practice in a cost-effective way.
However, evidence about the financial impact of limiting an
employee's choice of provider has been mixed. Studies by the
National Council on Compensation Insurance, WCRI, and others have
shown conflicting evidence that choice-of-physician provisions result
in reduced medical costs.
WAITING AND RETROACTIVE
PERIODS
------------------------------------------------------- Appendix I:1.9
As of January 1, 1995, LHWCA and the workers' compensation statutes
of all 50 states and D.C. provided that employees must be out of
work during a waiting period--ranging from 3 to 7 days--before
compensation benefits for lost wages can be paid.\34 FECA differs
from LHWCA and state and D.C. statutes in that FECA's 3-day waiting
period begins to run after the expiration of any COP to which the
worker may be entitled. COP is a unique feature of FECA. FECA
authorizes federal agencies to continue paying employees, who are
absent from work due to work-related traumatic injuries, their
regular salaries for up to 45 days before the 3-day waiting period
begins.\35 COP benefits are not payable in occupational disease
cases. Figure I.8 shows the number of days for waiting periods in
the states and D.C.
Figure I.8: Waiting Periods in
the States and D.C., as of
January 1, 1995
(See figure in printed
edition.)
Note: Appendix II, table II.28 identifies the states. Under FECA
and LHWCA, waiting periods are 3 days.
Source: GAO analysis of OWCP data.
If disabilities that result in an employee's absence from work
continued for 5 to 42 days after the date of injury, all
statutes--except Montana's--provide for payment of wage-loss benefits
retroactive to the date of injury. Montana's law has no provision
for a retroactive period. Under FECA, wage-loss benefits for the
3-day waiting period are payable if an eligible employee remains out
of work for 59 days, or 14 days after the end of the COP period. The
1972 Report of the National Commission on State Workmen's
Compensation Laws recommended that the waiting period for benefits be
no more than 3 days and that a period of no more than 14 days be
required to qualify for retroactive benefits for days lost.
Figure I.9 shows the number of days employees must be out of work to
receive compensation benefits for all days of disability, including
the waiting period.
Figure I.9: Number of Days
Employees Must Be Absent From
Work\ a to Receive Compensation
Benefits for All Days of
Disability, as of January 1,
1995
(See figure in printed
edition.)
Note: Appendix II, table II.29 identifies the states.
\a Under FECA, eligible employees receive their regular pay for the
first 45 days they are out of work due to traumatic injuries.
Source: GAO analysis of OWCP data.
LHWCA and the statutes in the 50 states and D.C. do not have
COP-type provisions. However, some nonfederal employers may provide
their employees with additional benefits while they are receiving
workers' compensation benefits. These additional benefits may
include sick leave during the waiting period, salary continuation
during the waiting period and beyond, and short- and long-term
disability insurance. Under FECA, federal employees cannot charge
sick leave during the waiting period.
Unless nonfederal employees are covered by supplemental benefits,
they may lose more income from short-term, work-related injuries than
eligible federal employees who have continued to receive their
regular pay under FECA's COP provision. A study of 1991 and 1992
workers' compensation claims in Texas found that the most frequent
duration of temporary income benefits for injured workers receiving
wage-loss benefits was 1 week and the median duration was 8.3 weeks.
Federal workers who are absent from work for 8 weeks would receive
their full salary for about the first 6-1/2 weeks of the absence,
because of FECA's COP provision, before they would start receiving
wage-loss benefits.\36 Unlike federal workers who would continue to
receive their salaries, injured workers in Texas would receive
workers' compensation wage-loss benefits subject to maximum
authorized weekly benefit limits.
--------------------
\34 Medical benefits are not subject to waiting periods and are
provided immediately.
\35 Injured workers must file their claims within 30 days of the
traumatic injury and meet several other criteria before becoming
eligible for COP benefits.
\36 If disabled for 59 days or less, the injured employee would not
receive compensation for the first 3 days of the compensation period.
OTHER WORKERS' COMPENSATION
PROGRAM CHARACTERISTICS
--------------------------------------------------------- Appendix I:2
In addition to benefit provisions previously discussed, workers'
compensation statutes contain provisions that deal with matters such
as coverage, benefit and program funding, claims processing, and
claims adjudication and appeals. Sufficient differences generally
exist to make each jurisdiction's administration and implementation
of its workers' compensation programs unique. Examples of
differences in the implementation and administration of FECA and
other jurisdictions' workers' compensation statutes are discussed in
the following sections.
COVERAGE UNDER WORKERS'
COMPENSATION LAWS
------------------------------------------------------- Appendix I:2.1
While FECA covers all federal civilian employees as well as several
other groups of workers, coverage under other federal and state
workers' compensation laws is not generally as comprehensive. LHWCA
covers workers engaged in maritime employment and several other
groups of workers. State workers' compensation laws vary in
designating which employees have coverage because (1) employers may
not have a sufficient number of employees to require coverage, (2)
selected occupations may be exempt, (3) coverage may not be required
for sole proprietors, and (4) employers in some states may have a
choice in providing workers' compensation coverage.\37
Under FECA, approximately 3 million federal civilian workers in all
branches of the government have workers' compensation insurance
coverage. These workers include (1) blue- and white-collar workers,
(2) workers paid under pay systems such as the general schedule, the
federal wage system, and other federal pay laws, and (3) workers
employed in the legislative, judicial, and executive branches of the
government, including the Postal Service. In addition, legislation
also extends FECA coverage to other individuals such as Peace Corp
and VISTA volunteers, Job Corps enrollees, and nonfederal law
enforcement officers in certain circumstances.
LHWCA provides workers' compensation coverage to longshore, harbor,
and other maritime workers as well as a variety of other workers
covered under acts such as the Defense Base Act of August 16, 1941;
the Nonappropriated Fund Instrumentalities Act of June 19, 1952; and
the Outer Continental Shelf Lands Act of August 7, 1953.
State workers' compensation laws generally designate which workers
have coverage. Some states exclude domestic and agricultural workers
from coverage and allow employers with only a few employees to opt
out of providing workers' compensation coverage. Figure I.10
contains information on the minimum number of employees an employer
must have before coverage is required.
Figure I.10: Minimum Number of
Employees Required Before
States Require Workers'
Compensation Coverage\a
(See figure in printed
edition.)
Note: Appendix II, table II.30 identifies the states.
\a Several states have exceptions based on factors such as type of
business or size of payroll.
Source: GAO analysis of OWCP data.
--------------------
\37 In three states (New Jersey, South Carolina, and Texas),
employers are not required to provide their employees with workers'
compensation coverage. These states, which are referred to as
elective states, give employers the option of providing coverage.
Employers who do not provide coverage are considered to have given up
their right to use the common law defenses available to them when
injured employees file lawsuits against them.
METHODS FOR FUNDING WORKERS'
COMPENSATION BENEFITS AND
ADMINISTRATIVE EXPENSES
------------------------------------------------------- Appendix I:2.2
Differences exist in (1) how various jurisdictions allow employers
and insurance carriers to fund workers' compensation benefit payments
and (2) how administrative costs incurred by various workers'
compensation agencies or commissions are funded. Methods used in
various jurisdictions for funding benefit payments and administrative
costs include insurance premiums, general appropriations,
assessments, fines, penalties, and fees.
Under FECA, benefit payments to injured employees and service
providers, such as physicians and vocational rehabilitation
contractors, are funded through a "chargeback system." On the basis
of benefits paid by OWCP from the Employees' Compensation Fund, OWCP
charges agencies for whom injured employees worked. These agencies
subsequently reimburse the Employees' Compensation Fund from their
next annual appropriation. For example, for the chargeback year
ended June 30, 1994, OWCP billed agencies and departments over $1.8
billion for compensation and medical benefits. In turn, agencies and
departments included this amount in their fiscal year 1995
appropriation requests. The Postal Service, mixed-ownership
government corporations, and certain other government corporations
are to reimburse Labor for their shares of OWCP's administrative
costs, as well as contributing amounts to the Employees' Compensation
Fund for benefits paid. OWCP's expenses for administering FECA in
fiscal year 1994 were $63.4 million. In addition, employing agencies
use their staff to assist OWCP in managing claims.
Under LHWCA, in calendar year 1993, self-insured employers or
insurance carriers who provided employers with workers' compensation
insurance coverage paid compensation and medical payments of $506.1
million on behalf of eligible injured workers, according to OWCP. In
selected cases involving employees who had second injuries\38 or who
worked for insolvent firms, LHWCA benefits of $118.4 million were
paid to eligible beneficiaries from a special fund. The special fund
is administered by OWCP and is financed by annual assessments on
authorized insurance carriers and self-insured employers and by
fines, penalties, and death benefit levies. Total expenditures for
program operations and administration of LHWCA in fiscal year 1994
were $20.5 million of which $9.2 million was for direct costs and
$11.3 million was for legal, audit, and investigative support
provided by other Labor components.\39 In addition, half the costs
($4 million) of automatic annual increases paid to beneficiaries in
cases of permanent total disability or death that occurred on or
before October 27, 1972, were funded through appropriations.
Under various states' workers' compensation programs, employers or
their insurance carriers are responsible for paying compensation and
medical payments to or on behalf of injured employees who worked for
them. Employers in these jurisdictions fund workers' compensation
benefit payments either through self-insurance or by paying insurance
premiums to private insurers or to a state agency responsible for
administering the states' workers' compensation program and paying
program beneficiaries.\40 Six states are "exclusive states" in that
the states provide workers' compensation insurance to employers
without competition from private insurance carriers; five of these
states allow qualified employers to self-insure.
Administrative expenses incurred by state workers' compensation
agencies are generally funded through one or more of the following
mechanisms: (1) general appropriations; (2) assessments against
insurance carriers and self-insured employers; and (3) collections of
fines, penalties, and fees.
For 1993, the Social Security Administration (SSA) estimated workers'
compensation benefit payments in the United States at $42.9
billion.\41 Of that amount, medical expenses were $17.5 billion and
compensation benefits were $25.4 billion. On the basis of SSA data,
we calculated expenses to administer workers' compensation activities
at $14.4 billion in 1993. This figure included amounts for sales
costs, claims administration, rehabilitation costs, profit, taxes,
and reserves.
--------------------
\38 LHWCA and some state workers' compensation programs have
second-injury funds, which are used to pay compensation benefits when
a preexisting injury is combined with a second injury to produce a
disability that is greater than that caused by the second injury
alone. Under FECA, there is no second-injury fund and the employing
agency is fully liable for compensation due to the resulting
disability.
\39 Office of Administrative Law Judges, Benefits Review Board,
Office of the Solicitor, and Office of the Inspector General.
\40 All jurisdictions have included security or insurance provisions
in their statutes to require employers to demonstrate their ability
to satisfy their potential obligations to pay workers' compensation
benefits. While the nature of these requirements, how they are
enforced, the operations and regulations of private insurers, state
funds, and self-insured employers are critical elements in a workers'
compensation program, we did not attempt to address these differences
because they generally do not apply in the case of FECA. The 1973
Compendium on Workmen's Compensation contains a discussion of these
elements.
\41 This figure includes $3.2 billion primarily for FECA and federal
black lung program benefits as well as amounts paid by employers and
insurance carriers for LHWCA benefits. Social Security Bulletin,
Summer 1995, Vol. 58, No. 2.
CLAIMS FILING
------------------------------------------------------- Appendix I:2.3
The path that an employee's claim for workers' compensation benefits
takes depends on factors such as the role of the jurisdiction in
adjudicating the claim and whether the employer decides to contest
the employee's claim. Most workers' compensation experts agree that
the great bulk of cases are handled in a satisfactory and prompt
manner, especially where the injuries are minor and involve no time
lost from work and only a small amount of medical or cash benefits.
In most cases, the claims process starts when an employee (or someone
acting on behalf of the employee) reports a work-related injury,
disease, or death, and files a notice of injury or a claim for
benefits with, (1) an employer, (2) an insurance carrier or a
third-party administrator representing an employer, or (3) a
governmental agency that administers the jurisdiction's workers'
compensation statute. Time frames for submitting notice of injury
reports are established by statute and, in most jurisdictions, are
excusable or may be extended for cause. The types of injuries that
employees are required to report and the time frames in which they
are required to report them vary.
Under FECA and LHWCA, notices of injury must be reported to the
employer within 30 days after the injury. Time limits for filing
notices of injury varied considerably in the states, ranging from
"immediately" in five states (Arizona, Arkansas, Hawaii, Washington,
and West Virginia) to 2 years in Florida and New Hampshire.
According to the U.S. Chamber of Commerce, 38 states (see app. II,
table II.31) and D.C. required these notices to be filed within 30
days or less. In Ohio, only employees who worked for self-insured
employers were required to file notices with their employer, others
would file their notices with the state workers' compensation agency.
In North Dakota, before August 1, 1995, injured employees were not
required to file a notice of injury with their employer but had to
file their claim for benefits with the state workers' compensation
agency within 1 year.
As with notice-of-injury reports, all jurisdictions have statutory
time limits on filing claims for workers' compensation benefits.
Under FECA, employees or their representatives must have filed a
claim for benefits within 3 years after injury or death. LHWCA
required that a claim be filed within 1 year of injury or death or 2
years after awareness of an occupational disease. In the states,
time limits for filing benefit claims ranged from 60 days after the
disability begins, such as in Maryland, to 6 years after the date of
injury in Utah and Minnesota. Forty-five states (see app. II, table
II.32) and D.C. required benefit claims to be filed within either 1
or 2 years after the injury or death,\42 according to the U.S.
Chamber of Commerce. The majority of states allow up to 2 years for
filing claims related to occupational diseases. Wisconsin is the
only state that does not have a time limit for filing claims for
occupational diseases.
--------------------
\42 In many jurisdictions, time frames can be excused or extended for
cause.
ADJUDICATION AND APPEALS
------------------------------------------------------- Appendix I:2.4
Claims adjudication under a particular jurisdiction's workers'
compensation system depends on factors such as the jurisdiction's
involvement in determining the claim's merit and whether employers
contest employees' claims for benefits. When disputes arise,
employees and employers may exercise appeal rights provided to them
under their states' workers' compensation laws. However, as provided
for under FECA regulations, proceedings conducted with respect to
claims filed under the act are to be nonadversarial in nature.
Accordingly, agencies for whom injured employees worked are not
allowed to appeal OWCP claims decisions.
Under FECA, OWCP claims examiners are to review and decide whether to
accept claims for compensation benefits filed by federal employees on
the basis of information submitted by them or their representatives
and by their supervisors or employers. According to OWCP procedures,
claims that do not involve time lost from work, have medical expenses
under $1,000, and are not contested by the employing agency for whom
the injured employee worked are to be routinely accepted. A claimant
who is not satisfied with his or her claims examiner's decision can
appeal.
FECA provides three avenues of appeal to such claimants--hearing,
reconsideration by OWCP, and review by ECAB.\43 One type of appeal
allows an injured employee to request either an oral hearing by an
OWCP representative or a review of the written record (but not both)
within 30 days from the date of a formal decision by OWCP as long as
a reconsideration has not already been requested. Another type of
appeal allows an employee to ask an OWCP district office to
reconsider its decision. The request for reconsideration must be
requested within 1 year of the date the formal decision was issued
and be based on (1) relevant evidence not previously submitted, (2) a
showing that OWCP erroneously applied or interpreted a point of law,
or (3) advancing a point of law or fact not previously considered by
OWCP. A third type of appeal allows a claimant to request a review
of a decision by ECAB, normally within 90 days, but this period may
be extended for up to 1 year for good cause. ECAB review is based
solely on the case record; new evidence is not considered. ECAB
decisions are final and are not reviewable by other officials of the
United States or by the courts.
FECA's appeals provisions differ from those in other workers'
compensation laws in that injured federal employees' appeals are not
adjudicated by the courts. Also, employing agencies cannot appeal
OWCP claims decisions either administratively to OWCP, to ECAB, or to
the courts. The lack of judicial review by the courts is referred to
by some workers' compensation experts as indicative of a
nonadversarial system. Further, federal regulations (20 C.F.R.
10.140) state that "proceedings conducted with respect to claims
filed under [FECA] are nonadversary in character. Accordingly, a
claimant's employing agency shall not have the right, except as
provided in [the section on COP], to actively participate in the
claims adjudication process."
Although employers cannot appeal claims decisions under FECA, they
can controvert an employee's right to COP benefits. In taking
controversion action, an employing agency submits evidence to OWCP
disputing or challenging the validity of the injured employee's
claim. If certain conditions are met (e.g., work stoppage occurred
90 days or more following the injury or the injury was reported after
the employee was terminated), the employing agency shall not pay COP
benefits if it controverts the claim. In other cases, the employing
agency may controvert an employee's right to COP, but the employee's
regular pay shall not be interrupted during the 45-day COP period
unless the controversion is sustained by OWCP and OWCP notifies the
employing agency of its decision.
Under LHWCA, injured employees generally file claims for benefits
with their employers or employers' representatives (i.e., insurance
carriers or third-party administrators). When injured employees
covered by LHWCA and their employers cannot agree on a claim's merit,
OWCP becomes involved to help mediate disputes. If disputed claims
filed by workers covered under LHWCA cannot be resolved through an
informal conference at which an OWCP claims examiner acts as a
mediator, the case is referred to an administrative law judge in
Labor's Office of Administrative Law Judges (OALJ). The parties can
appeal an OALJ decision to Labor's Benefits Review Board, which is
composed of five permanent members appointed by the Secretary of
Labor to indefinite terms. If the case is still disputed, the
parties can further appeal it to the U.S. Court of Appeals and
ultimately to the U.S. Supreme Court.
Under states' laws, insurance carriers, self-insured employers,
third-party administrators, or state workers' compensation agencies
generally act as the reviewing and approving entities responsible for
adjudicating injured employees' claims. In those states that provide
workers' compensation benefits through an exclusive state fund,\44
the adjudication processes are somewhat similar to FECA's in that
claims are to be initially reviewed and approved by claims examiners
employed by state workers' compensation agencies rather than
insurance carriers or third-party administrators. Claimants or
employers who are not satisfied with the decision usually can appeal
the decision through informal administrative processes such as
hearings or other dispute resolution processes. If the parties
cannot reach resolution through these informal processes, more formal
appeals before either a board, panel, commission, or administrative
law judge are authorized. If the parties still dispute the case,
appeals are generally authorized through the state court system.
Only six states (Alabama, Maryland, Ohio, Texas, Vermont, and
Washington) authorize a trial by jury during the appeal process,
according to U.S. Chamber of Commerce.
Whether a workers' compensation system is considered adversarial or
nonadversarial affects factors such as attorney involvement and
workers' compensation administrative costs. According to some
workers' compensation experts, adversarial systems are more costly
because the involvement of attorneys can cause delays in reaching
claims' decisions.
Under FECA, fees for claimants' attorneys must be approved by OWCP
and must be based on reasonable charges for necessary services on
behalf of a claimant. Unlike under state workers' compensation laws,
OWCP will not approve fees on the basis of a percentage of the amount
of compensation awarded. In the states, attorneys fees may be
contingent on the amount of the compensation awarded and can be
anywhere from one-fourth to one-third of the compensation amount
approved.
--------------------
\43 ECAB is an entity, within Labor but separate from OWCP, that was
established to give federal employees the same administrative due
process of law and right of appellate review that most nonfederal
workers have under various states' workers' compensation laws.
\44 Nevada, North Dakota, Ohio, Washington, West Virginia, and
Wyoming.
REPORTING OF INJURIES
------------------------------------------------------- Appendix I:2.5
In addition to notices of injuries and claims for benefits that
employees file, reports of injuries and illnesses are usually
reported to others. OWCP provides information on injuries and
illnesses to Labor's Occupational Safety and Health Administration
(OSHA). Employers, including those covered under LHWCA, generally
are required to (1) report injuries and illnesses to state workers'
compensation agencies and (2) maintain records on reports of
accidents under the Federal Occupational Safety and Health Act of
1970, if their businesses affect interstate commerce.
The types of injuries that employees are required to report and the
time frames in which they are required to report them vary. Many
jurisdictions also impose fines on employers who fail to report
injuries. Under FECA, an immediate supervisor must report to OWCP
any injury that results in a death or probable disability of an
employee. Under LHWCA, employers must report injuries that cause
time lost from work to Labor within 10 days of the date of injury or
death or knowledge of a disease. State reporting requirements vary
considerably, from no statutory provisions for reporting to reporting
only those injuries that cause time lost from work or claims
resulting in medical expenses. In almost all states, required
reports must be filed within 10 days of the date of injury.
Using information from these reports, OSHA and BLS compute injury and
illness incident rate information for the federal and private sector
workforces, respectively. In 1992, the estimated number and
frequency (incidence rates) of occupational injuries and illnesses
incurred by federal employees (including those who worked for the
Postal Service) was less than the incidence rates for private sector
workers in the United States and private and public sector workers in
selected states. BLS develops incidence rate information for the
private and public (state and local governments) sectors.\45 OSHA
develops incidence rate information for the federal sector. Figure
I.11 compares 1992 incidence rate information.
Figure I.11: Incidence Rates
per 100 Workers in Public and
Private Sectors in Selected
States (1992)
(See figure in printed
edition.)
Note 1: According to BLS a official, states with OSHA-approved
safety plans must collect state and local government injury and
illness rate data. For our comparisons, we selected the above eight
states with OSHA-approved safety plans for which data were available
and that had the largest number of federal employees.
Note 2: Private and public sector incidence rate data include
full-or part-time workers and are based on calendar year data,
whereas the federal incidence rate includes only full-time workers
and is based on fiscal year data.
Note 3: National private sector and state and local government
incidence rate data are based on a scientifically selected sample of
approximately 280,000 employers collected annually by BLS.
Sources: Data furnished by OSHA for federal incidence rates and BLS
for private sector and state and local government incidence rates.
For the states shown, state government workers in North Carolina were
the only group to have a lower incidence rate than the federal
government in 1992. According to OSHA's analysis of FECA data, in
fiscal year 1992, the incidence rate of injuries and illnesses per
100 federal employees was 5.1 percent based on 158,677 total reported
injuries. The rate for lost time injuries and illnesses was 2.39
percent based on 74,120 reported injuries and illnesses.
BLS' analysis for 1992 showed that the national incidence rate for
nonfatal injuries and illnesses per 100 private industry employees
was 8.9 based on 6.8 million job-related injuries and illnesses
reported. The incidence rate for lost workdays\46 was 3.9 per 100
workers, based on 2.95 million reported nonfatal injuries and
illnesses.
Figure I.11 shows that total case incidence rates for state
government workers in the states for which we obtained information
ranged from a high of 12.3 in New York to a low of 4.8 in North
Carolina, based on 27,300 and 6,200 total reported injuries and
illnesses, respectively. Total case incidence rates for the local
government sectors in the states for which we obtained information
varied from a high of 14.5 per 100 workers in California to a low of
6.5 in North Carolina based on 142,500 and 15,300 reported total
injuries and illness cases, respectively.
While figure I.11 shows incidence rate information for all
occupational groups in each employment sector, it does not attempt to
take into consideration such variables as the number of workers
employed by occupation or the degree of risk associated with each
occupation. According to BLS, because of these factors, comparisons
of different jurisdictions' incident rate information should be
viewed with caution. BLS also indicated that incidence rates could
vary by state because of different industry and occupational mixes
and emphasis on work safety programs.
During 1992, OSHA injury and illness data for FECA on lost-time cases
indicated that letter carriers, postal-distribution workers, and
nurses were the occupational groups in the federal sector with the
most injuries and illnesses. These occupations accounted for 26
percent of the 87,822 lost-time injuries and illnesses. Similar data
collected for 1992 in the private sector for cases involving days
away from work indicated that machine operators, fabricators, and
laborers were the occupational groups with the most injuries,
accounting for about 40 percent of the 2.3 million lost-time injuries
and illnesses.
BLS data for the eight states that we used for our comparison
indicated that nurses and nursing aides, correction officers, and
janitors were the employee occupations with the most reported
injuries and illnesses involving days away from work in state
government, representing 36 percent of the cases reported. Police,
janitors, and bus drivers were the occupations with the most reported
injuries and illnesses involving days away from work for local
government employees during 1992, representing about 25 percent of
the case total.
Most OSHA information on federal government incidence rates is
categorized by department and agency rather than by occupation.
Figure I.12 shows fiscal year 1992 incidence rates for the Department
of Defense and the U.S. Postal Service, the federal agencies with
the most employees. In addition, the figure shows the federal
agencies with over 2,000 employees that had the highest and the
lowest incidence rates during fiscal year 1992.
Figure I.12 Injury and Illness
Incidence Rates for Selected
Federal Agencies in Fiscal Year
1992
(See figure in printed
edition.)
Source: GAO analysis of OSHA data.
--------------------
\45 BLS collects incidence rate data on an annual basis for the
private sector and for state and local government sectors in 23
states that have OSHA approved occupational safety plans. Private
industry data are obtained by surveying 250,000 establishments in 11
private industries and in 50 states and D.C. These sample data are
used to project private industry incident rate data nationally.
\46 Lost workday cases included both cases involving days away from
work and/or restricted workdays.
IDENTIFICATION OF STATES IN
APPENDIX I
========================================================== Appendix II
Table II.1
Forty-three States That Base Their
Maximum Weekly Benefit Amounts on a
Percentage of the State Average Weekly
Wage, as of January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Kansas Nevada South Carolina
Arkansas Kentucky New Hampshire South Dakota
California Louisiana New Jersey Texas
Colorado Maine New Mexico Utah
Connecticut Maryland North Carolina Vermont
Delaware Massachusetts North Dakota Virginia
Florida Michigan Ohio Washington
Hawaii Minnesota Oklahoma West Virginia
Idaho Mississippi Oregon Wisconsin
Illinois Missouri Pennsylvania Wyoming
Iowa Montana Rhode Island
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.2
Groups of States in Figure I.2: Maximum
Authorized Weekly Benefits, as of
January 1, 1995, in Descending Order by
Maximum Authorized Weekly Benefit
Second Third Fourth Bottom
Top fifth fifth fifth fifth fifth
---------------------- ---------- ---------- ---------- ----------
Alaska Hawaii Alabama California Arizona
Connecticut Michigan Colorado Idaho Arkansas
D.C. Minnesota Florida Kentucky Delaware
Illinois Missouri Indiana Montana Georgia
Iowa North Maine New York Kansas
Carolina
Maryland Ohio Nevada North Louisiana
Dakota
Massachusetts Oregon New Jersey South Mississipp
Carolina i
New Hampshire Pennsylvan Texas Tennessee Nebraska
ia
Vermont Rhode Virginia Utah New Mexico
Island
Washington Wisconsin West Wyoming Oklahoma
Virginia
South
Dakota
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.3
Groups of States in Figure I.3: Minimum
Authorized Weekly Benefits, as of
January 1, 1995, in Descending Order by
Minimum Authorized Weekly Benefits
Top
fifth Second fifth Third fifth Fourth fifth Bottom fifth No minimum
----- ------------- ------------- ------------- ------------- -------------
D.C. Alabama Alaska Indiana Arkansas Arizona
Idaho California Illinois Maryland Florida Colorado
Iowa Connecticut Kentucky Missouri Georgia Maine
New Delaware Louisiana Nebraska Kansas Michigan
Hamps
hire
North Hawaii Minnesota New Mexico Mississippi Montana
Dakot
a
Ohio Massachusetts Oregon New York North Nevada
Carolina
Penns New Jersey South Utah Oklahoma Rhode Island
ylvan Carolina
ia
South Virginia Tennessee Washington Wisconsin Wyoming
Dakot
a
Vermo West Virginia Texas
nt
--------------------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.4
Forty States That Adjust Their Average
Weekly Wage at Least Once a Year, as of
January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Kansas Nevada South Carolina
Arkansas Louisiana New Hampshire South Dakota
Colorado Maine New Jersey Texas
Connecticut Maryland New Mexico Utah
Florida Massachusetts North Carolina Vermont
Hawaii Michigan North Dakota Virginia
Idaho Minnesota Ohio Washington
Illinois Mississippi Oregon West Virginia
Iowa Missouri Pennsylvania Wisconsin
Kansas Montana Rhode Island Wyoming
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.5
Thirteen States That Authorized Cost-
of-Living Increases for Beneficiaries
Who Had Been Receiving Benefits for a
Specified Time Period, as of January 1,
1995
---------------------- -------------- -------------- --------------
California Maryland Montana South Dakota
Idaho Massachusetts New Hampshire Vermont
Illinois Minnesota Rhode Island Virginia
Washington
----------------------------------------------------------------------
Source: GAO analysis of U.S. Chamber of Commerce data.
Table II.6
Thirty-four States That Paid Wage-Loss
Benefits for Temporary Total Disability
for the Duration of Disability, as of
January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Illinois Montana Oregon
Alaska Iowa Nebraska Pennsylvania
Arizona Kansas Nevada Rhode Island
California Kentucky New Hampshire South Dakota
Colorado Louisiana New York Vermont
Connecticut Maine North Carolina Washington
Delaware Maryland North Dakota Wisconsin
Hawaii Michigan Ohio Wyoming
Idaho Minnesota
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.7
Sixteen States That Limited Wage-Loss
Benefits for Temporary Total Disability
to Between 100 and 500 Weeks, as of
January 1, 1995
---------------------- -------------- -------------- --------------
Arkansas Massachusetts New Mexico Texas
Florida Mississippi Oklahoma Utah
Georgia Missouri South Carolina Virginia
Indiana New Jersey Tennessee West Virginia
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.8
States That Base Benefits on Workers'
Wages as of Date of Disability or
Knowledge or Manifestation of
Occupational Disease, as of January 1,
1995
---------------------- -------------- -------------- --------------
Alabama Hawaii New Hampshire Pennsylvania
Alaska Idaho New Mexico Rhode Island
Arizona Iowa New York South Carolina
California Maryland North Carolina Tennessee
Colorado Massachusetts North Dakota Utah
Connecticut Mississippi Ohio Vermont
Delaware Montana Oklahoma West Virginia
Florida Nebraska Oregon
----------------------------------------------------------------------
Source: U.S. Chamber of Commerce (1995).
Table II.9
States That Provide for Compensability
of Job-related Stress Based on Case Law
Rather than Specific Statutory
Provisions
---------------------- -------------- -------------- --------------
Alabama Indiana Nebraska South Dakota
Arkansas Iowa Nevada Tennessee
Connecticut Kansas New Jersey Utah
Delaware Kentucky North Carolina Vermont
Georgia Maryland Oklahoma Virginia
Hawaii Mississippi Pennsylvania West Virginia
Idaho Missouri South Carolina Wyoming
Illinois
----------------------------------------------------------------------
Source: National Conference of State Legislatures (June 1995).
Table II.10
Thirty-eight States Whose Statutes
Contain Specific Schedules for Loss, or
Loss of Use, of Specific Body Parts, as
of January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Iowa New Jersey South Carolina
Arizona Kansas New Mexico South Dakota
Arkansas Louisiana New York Tennessee
Colorado Maine North Carolina Texas
Connecticut Maryland North Dakota Utah
Delaware Michigan Ohio Vermont
Georgia Mississippi Oklahoma Virginia
Hawaii Missouri Pennsylvania Wisconsin
Idaho Nebraska Rhode Island Wyoming
Illinois New Hampshire
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.11
Twelve States Whose Statutes Provide
Compensation for Loss of, or Loss of Use
of, Specific Body Parts Based on Factors
Other Than Schedules, as of January 1,
1995
---------------------- -------------- -------------- --------------
Alaska Indiana Minnesota Oregon
California Kentucky Montana Washington
Florida Massachusetts Nevada West Virginia
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.12
Groups of States in Figure I.4: Maximum
Number of Weeks for Benefits for
Schedule Awards, as of January 1, 1995,
in Descending Order by Number of Weeks
------------------------------ -------- -------- -------- --------
Arm
Top fourth Second Third Bottom
fourth fourth fourth
Connecticut Arizona Alabama Louisiana
----------------------------------------------------------------------
D.C. Delaware Arkansas Mississippi
----------------------------------------------------------------------
Hawaii Illinois Colorado New Mexico
----------------------------------------------------------------------
Idaho Iowa Georgia South Dakota
----------------------------------------------------------------------
Maryland Maine Kansas Tennessee
----------------------------------------------------------------------
New Jersey Michigan Nebraska Texas
----------------------------------------------------------------------
New York Missouri New Hampshire Virginia
----------------------------------------------------------------------
Pennsylvania North Carolina Ohio Utha
----------------------------------------------------------------------
Rhode Island North Dakota South
Carolina Wyoming
----------------------------------------------------------------------
Wisconsin Oklahoma Vermont
----------------------------------------------------------------------
Foot
----------------------------------------------------------------------
Top fourth Second fourth Third
fourth Bottom
fourth
----------------------------------------------------------------------
Connecticut Arizona Alabama Colorado
----------------------------------------------------------------------
D.C. Delaware Arkansas New Hampshire
----------------------------------------------------------------------
Hawaii Illinois Georgia New Mexico
----------------------------------------------------------------------
Maryland Iowa Idaho South Dakota
----------------------------------------------------------------------
New Jersey Maine Kansas Tennessee
----------------------------------------------------------------------
New York Michigan Louisiana Texas
----------------------------------------------------------------------
Oklahoma Missouri Mississippi Utah
----------------------------------------------------------------------
Pennsylvania Nebraska North Carolina
Virginia
----------------------------------------------------------------------
Rhode Island North Dakota Ohio Wyoming
----------------------------------------------------------------------
Wisconsin Vermont South Carolina
----------------------------------------------------------------------
Eye
----------------------------------------------------------------------
Top fourth Second fourth Third
fourth Bottom
fourth
----------------------------------------------------------------------
Connecticut D.C. Alabama Arkansas
----------------------------------------------------------------------
Delaware Georgia Arizona Louisiana
----------------------------------------------------------------------
Idaho Hawaii Colorado Mississippi
----------------------------------------------------------------------
Maine Illinois Kansas New Hampshire
----------------------------------------------------------------------
Maryland Iowa Nebraska Tennessee
----------------------------------------------------------------------
Michigan Missouri New Mexico Texas
----------------------------------------------------------------------
New Jersey
New York North Carolina
Utah
----------------------------------------------------------------------
Oklahoma North Dakota Ohio Virginia
----------------------------------------------------------------------
Pennsylvania
Rhode Island South Carolina
Wyoming
----------------------------------------------------------------------
Wisconsin South Dakota Vermont
----------------------------------------------------------------------
Hearing-1 ear
----------------------------------------------------------------------
Top fourth Second Third Bottom No
fourth fourth fourth schedule
Arizona Alabama Arkansas Colorado Idaho
Delaware Connecti Illinois Kansas Louisian
cut a
Georgia D.C. Iowa Mississi Michigan
ppi
Maryland Hawaii Maine N ew outh
Hampshir Dakota
e S
New Jersey New York Missouri New Tennesse
Mexico e
North Carolina Pennsylv Nebraska Ohio Texas
ania
Oklahoma Rhode North Wisconsi Utah
Island Dakota n
South Carolina Vermont Virginia Wyoming
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.13
Forty-three States Whose Statutes
Specifically Address Vocational
Rehabilitation, as of 1993
---------------------- -------------- -------------- --------------
Alabama Indiana Missouri Oregon
Alaska Iowa Montana Rhode Island
Arizona Kansas Nebraska South Dakota
Arkansas Kentucky Nevada Texas
California Louisiana New Hampshire Utah
Connecticut Maine New Jersey Vermont
Florida Maryland New York Virginia
Georgia Massachusetts North Carolina Washington
Hawaii Michigan North Dakota West Virginia
Idaho Minnesota Ohio Wisconsin
Illinois Mississippi Oklahoma
----------------------------------------------------------------------
Source: Return-to-Work Programs for Texas Workers' Compensation
Claimants: Suggested Design Parameters, January 1995, and Workers'
Compensation in New Jersey: Administrative Inventory, by WCRI.
Table II.14
Twenty-two States That Provide
Additional Death Benefits to Surviving
Spouses With Children, as of January 1,
1995
---------------------- -------------- -------------- --------------
Alabama Idaho New Hampshire Rhode Island
Arizona Kentucky New Jersey Tennessee
Arkansas Louisiana Oklahoma Vermont
Delaware Minnesota Oregon Washington
Florida Mississippi Pennsylvania Wisconsin
Hawaii Nebraska
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.15
Twenty-eight States That Pay the Same
Amount of Survivor Benefits Regardless
of Whether a Deceased Employee Was
Survived by Only a Spouse Or A Spouse
and Children, as of January 1, 1995
---------------------- -------------- -------------- --------------
Alaska Iowa Montana South Carolina
California Kansas Nevada South Dakota
Colorado Maine New Mexico Texas
Connecticut Maryland New York Utah
Georgia Massachusetts North Carolina Virginia
Illinois Michigan North Dakota West Virginia
Indiana Missouri Ohio Wyoming
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.16
States Included in Each Bar in Figure
I.5 (Spouse Only): Bases Used to
Calculate Death Benefits in the States
and D.C., as of January 1, 1995
66-2.3 More than 6-
Less than 66-2/3 percent 2/3 percent of
percent of wages of wages wages Other basis
------------------ -- -------------- -------------- --------------
Alabama California Texas Alaska
Arizona Colorado West Virginia Connecticut
Arkansas Delaware Iowa
D.C. Georgia Maine
Florida Illinois Michigan
Hawaii Indiana Oregon
Idaho Kansas Wyoming
Kentucky Maryland
Louisiana Massachusetts
Minnesota Missouri
Mississippi Montana
New Hampshire Nebraska
New Jersey Nevada
Oklahoma New Mexico
Pennsylvania New York
Tennessee North Carolina
Washington North Dakota
Ohio
Rhode Island
South Carolina
South Dakota
Utah
Vermont
Virginia
Wisconsin
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.17
States Included in Each Bar in Figure
I.5 (Spouse and Children): Bases Used to
Calculate Death Benefits in the States
and D.C., as of January 1, 1995
Less than 66-2/3 66-2/3 percent More than 66
percent of wages of wages wages Other basis
------------------ -- -------------- -------------- --------------
Idaho Alabama Delaware Alaska
Louisiana Arizona Kentucky Connecticut
Arkansas Nebraska Iowa
California New Jersey Maine
Colorado Oklahoma Michigan
D.C. Rhode Island Oregon
Florida Texas Wisconsin
Georgia Vermont Wyoming
Hawaii Washington
Illinois West Virginia
Indiana
Kansas
Maryland
Massachusetts
Minnesota
Mississippi
Missouri
Montana
Nevada
New Hampshire
New Mexico
New York
North Carolina
North Dakota
Ohio
Pennsylvania
South Carolina
South Dakota
Tennessee
Utah
Virginia
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.18
Forty-seven States That Authorize Burial
Allowances up to a Specified Maximum
Amount, as of January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Illinois Missouri Rhode Island
Alaska Indiana Montana South Carolina
Arizona Iowa Nebraska South Dakota
Arkansas Kansas Nevada Tennessee
California Kentucky New Hampshire Texas
Colorado Louisiana New Jersey Vermont
Connecticut Maine New Mexico Virginia
Delaware Maryland North Carolina Washington
Florida Massachusetts North Dakota West Virginia
Georgia Michigan Ohio Wisconsin
Hawaii Minnesota Oregon Wyoming
Idaho Mississippi Pennsylvania
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.19
Forty-five States That Provided for Full
Medical Benefits Without Limitations, as
of January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Indiana Missouri Rhode Island
Alaska Iowa Nebraska South Carolina
Arizona Kansas Nevada South Dakota
California Kentucky New Hampshire Tennessee
Colorado Louisiana New Mexico Texas
Connecticut Maine New York Utah
Delaware Maryland North Carolina Vermont
Georgia Massachusetts North Dakota Virginia
Hawaii Michigan Oklahoma Washington
Idaho Minnesota Oregon West Virginia
Illinois Mississippi Pennsylvania Wisconsin
Wyoming
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.20
Forty-one States That Used or Were
Developing Medical Fee Schedules, as of
January 1995
---------------------- -------------- -------------- --------------
Alabama Kansas Nebraska Pennsylvania
Alaska Kentucky Nevada Rhode Island
Arizona Louisiana New Hampshire South Carolina
Arkansas Maine New Mexico South Dakota
California Maryland New York Texas
Colorado Massachusetts North Carolina Utah
Connecticut Michigan North Dakota Vermont
Florida Minnesota Ohio Washington
Georgia Mississippi Oklahoma West Virginia
Hawaii Montana Oregon Wisconsin
Wyoming
----------------------------------------------------------------------
Source: GAO analysis of WCRI data.
Table II.21
Seventeen States Included in Study on
Cost Containment Measures
---------------------- -------------- -------------- --------------
Connecticut Illinois Massachusetts New York
Florida Kentucky Michigan Oregon
Georgia Louisiana Minnesota Pennsylvania
Hawaii Maine New Mexico Virginia
Wisconsin
----------------------------------------------------------------------
Source: Health Care Costs in Workers' Compensation Programs: An
Assessment of Cost Containment Policy Initiatives (Cornell
University, 1993), a dissertation by Silvana Pozzebon and summarized
in John Burton's Workers' Compensation Monitor, May/June 1993.
Table II.22
Sixteen States That Had Bill Review
Programs in Place, as of January 1995
---------------------- -------------- -------------- --------------
Arkansas Michigan North Dakota Texas
Florida Mississippi Ohio Washington
Kansas Nevada Oregon West Virginia
Louisiana North Carolina South Carolina Wyoming
----------------------------------------------------------------------
Source: GAO analysis of WCRI data.
Table II.23
Twenty-two States That Had Implemented
or Were Developing Utilization Review
Programs, as of January 1995
---------------------- -------------- -------------- --------------
Arkansas Massachusetts New Mexico Texas
Colorado Michigan North Dakota Utah
Florida Mississippi Ohio Washington
Kentucky Montana Rhode Island West Virginia
Louisiana Nevada Tennessee Wyoming
Maine New Hampshire
----------------------------------------------------------------------
Source: GAO analysis of WCRI data.
Table II.24
Thirty-three States In Which the Use of
HMOs/PPOs Was Authorized by Statute,
Employer, or Insurer, as of October 1994
---------------------- -------------- -------------- --------------
Arizona Indiana Missouri Pennsylvania
Arkansas Iowa Montana Rhode Island
California Louisiana Nevada South Carolina
Colorado Maine New Mexico Tennessee
Connecticut Massachusetts New York Utah
Florida Michigan North Carolina Vermont
Hawaii Minnesota North Dakota Washington
Illinois Mississippi Oregon West Virginia
Wisconsin
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.25
Twenty-five States That Allowed Injured
Employees to Choose Their Initial
Physician or Medical Care Provider
Without Restriction, as of January 1,
1995
---------------------- -------------- -------------- --------------
Alaska Louisiana Montana Oregon
Arizona Maine Nebraska Rhode Island
Delaware Maryland New Hampshire South Dakota
Hawaii Massachusetts North Dakota Washington
Illinois Minnesota Ohio West Virginia
Kentucky Mississippi Oklahoma Wisconsin
Wyoming
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.26
Seven States That Restricted Employees'
Initial Choice of Medical Care Provider
by Requiring Employees to Choose Their
Initial Medical Care Provider From a
State Agency or Employer List, as of
January 1, 1995
---------------- ---------------- ---------------- ----------------
Connecticut Nevada Tennessee Virginia
Georgia New York Texas
----------------------------------------------------------------------
Note: In one state, South Carolina, the state agency chose the
initial medical care provider.
Source: GAO analysis of OWCP data.
Table II.27
Seventeen States Where Employer Chooses
Initial Medical Care Provider, as of
January 1, 1995
State agency may Employee may
No change of employer change employer change employer
selection selection selection
------------------------------ ------------------ ------------------
Alabama Arkansas California
Florida Colorado Michigan
Idaho Kansas New Mexico
Indiana Utah Pennsylvania
Iowa Vermont
Missouri
New Jersey
North Carolina
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.28
Length of Waiting Periods in the States,
as of January 1, 1995
3 days 4-6 days 7 days
------------------------------ ------------------ ------------------
Alabama Idaho Arizona
Alaska Massachusetts Arkansas
California Mississippi Florida
Colorado Montana Georgia
Connecticut Nevada Indiana
Delaware North Dakota Kansas
Hawaii Kentucky
Illinois Louisiana
Iowa Maine
Maryland Michigan
Minnesota Nebraska
Missouri New Jersey
New Hampshire New Mexico
Oregon New York
Rhode Island North Carolina
Utah Ohio
Vermont Oklahoma
Washington Pennsylvania
West Virginia South Carolina
Wisconsin South Dakota
Wyoming Tennessee
Texas
Virginia
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.29
Identification of States in Figure I.9:
Number of Days Employees Must Be Absent
From Work to Receive Compensation
Benefits for All Days of Disability, as
of January 1, 1995
Number of days States
---------------- ----------------------------------------------------
5 Massachusetts, Nevada, North Dakota
7 Connecticut, Delaware, New Jersey, South Dakota,
West Virginia, Wisconsin
8 Wyoming
10 Hawaii, Minnesota, Vermont
14 Arizona, Arkansas, California, Colorado, Idaho,
Illinois, Iowa, Kentucky, Maine, Maryland, Michigan,
Mississippi, Missouri, New Hampshire, New York,
Ohio, Oregon, Pennsylvania, Rhode Island, South
Carolina, Tennessee, Utah, Washington
21 Alabama, Florida, Georgia, Indiana, Kansas, North
Carolina, Oklahoma, Virginia
28 Alaska, New Mexico, Texas
42 Louisiana, Nebraska
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.30
Identification of States in Figure I.10:
Minimum Number of Employees Required for
Workers' Compensation Coverage by State,
as of January 1, 1995
---------------------- ---------------------- ----------------------
Alaska Kentucky North Dakota
Arizona Louisiana Ohio
California Maine Oklahoma
Colorado Maryland Oregon
Connecticut Massachusetts Pennsylvania
Delaware Minnesota South Dakota
Hawaii Montana Texas
Idaho Nebraska Utah
Illinois Nevada Vermont
Indiana New Hampshire Washington
Iowa New Jersey West Virginia
Kansas New York Wyoming
3-employees 4-employees 5-employees
Arkansas Rhode Island Alabama
Georgia South Carolina Mississippi
Michigan Florida Missouri
New Mexico Tennessee
North Carolina
Virginia
Wisconsin
----------------------------------------------------------------------
Source: GAO analysis of OWCP data.
Table II.31
States Requiring That Notice of Injury
be Filed With Employer in 30 Days or
Less, as of January 1, 1995
---------------------- -------------- -------------- --------------
Alabama Indiana Nebraska South Dakota
Alaska Kansas Nevada Tennessee
Arizona Kentucky New Jersey Texas
Arkansas Louisiana New Mexico Vermont
California Maryland New York Virginia
Colorado Massachusetts North Carolina Washington
Connecticut Minnesota Oregon West Virginia
Georgia Mississippi Pennsylvania Wisconsin
Hawaii Missouri Rhode Island Wyoming
Illinois Montana
----------------------------------------------------------------------
Source: U.S. Chamber of Commerce.
Table II.32
States Requiring That Claims for
Benefits be Filed Within 2 Years of
Injury or Death
---------------------- -------------- -------------- --------------
Alabama Idaho Montana Oregon
Alaska Indiana Nebraska Rhode Island
Arizona Iowa Nevada South Carolina
Arkansas Kansas New Hampshire South Dakota
California Kentucky New Jersey Tennessee
Colorado Louisiana New Mexico Texas
Connecticut Maine New York Vermont
Delaware Maryland North Carolina Virginia
Florida Michigan North Dakota Washington
Georgia Mississippi Ohio West Virginia
Hawaii Missouri Oklahoma Wisconsin
Wyoming
----------------------------------------------------------------------
Source: U.S. Chamber of Commerce.
(See figure in printed edition.)Appendix III
COMMENTS FROM U.S. DEPARTMENT OF
LABOR
========================================================== Appendix II
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV
GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C.
Larry H. Endy, Assistant Director, Federal Management and Workforce
Issues
Edward R. Tasca, Evaluator-in-Charge
Diane N. Morris, Evaluator
DENVER REGIONAL OFFICE
Robert E. Kigerl, Evaluator
*** End of document. ***