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. ***