Once the average weekly wage (AWW) is established, this is multiplied by two-thirds and this figure, the compensation rate (CR) is the amount of money the injured worker is to receive each week he or she is disabled. There is a maximum rate which changes periodically. Generally, DBA insurers pay every two weeks. Once the compensation rate for “total disability” is established, it does not change and there are no increases for cost of living or inflation.
Benefits are generally paid until the injured worker returns to work or is capable of returning to work and suitable work is available. For example, if an injured worker fully recovers from his or her injury and can return to his or her regular job, total disability benefits end. Also, even if an injured worker cannot return to his regular job due to a physicians restrictions, compensation ends if the employer offers the employee suitable work. Short of offering a job, the employer/insurer may stop compensation for total disability if it can prove that there are suitable jobs which exist in the employees commuting area. If those jobs do not meet or exceed the injured worker’s previously established AWW, the employer/carrier may have to pay either partial disability benefits or a “scheduled award”, depending on the nature of the original injury.
There are certain injuries which are subject to a scheduled award. For example, if an injured worker has an arm injury, is at Maximum Medical Improvement (MMI), work is available and has a 10% permanent impairment rating, he or she would be entitled to a scheduled award but no further total disability benefits unless there is a change in condition. However, if a person has a back injury and is at MMI, he or she would still be entitled to total disability benefits if he can prove that he or she has made a diligent but unsuccessful attempt to find suitable work. This is normally a issue which is litigated and there are many scenarios which may come into play. For a list of “scheduled injuries’, see .
Maximum medical improvement is a medical term which signifies that the employee has recovered from his or her injuries as much as can be expected and the medical providers have done everything they can do medically. If the employee reached this point and still cannot work, he or she may be entitled to “permanent and total” (PTD) disability benefits. These benefits are generally reserved for those injured workers who will most likely be unable to work for the rest of their lives. This benefit carries with it an automatic cost of living allowance.
The medical benefits under the DBA includes prescription medications, medical equipment or appliances, mileage, parking and other medical expenses that are prescribed by an authorized physician and are both reasonable and necessary. The medical expenses are paid under a fee schedule and the total bill is normally not paid. However, the injured worker is not responsible for the portion not paid.
As to attorneys’ fees, in these cases, there are no contingency fees allowed (i.e. 25% of benefits collected) and attorneys are paid based on an hourly rate. These fees are generally paid after litigation or at settlement and by the employer/insurer. After a hearing, if the injured worker prevails, his or her attorney submits a Fee Petition to the judge for approval. The employer/insurer is given the opportunity to respond to the petition. The approved fee is paid by the insurer. Similarly, if a case is settled, the fee is generally paid by the insurer and may be subject to negotiation with the insurer as part of the settlement package. These fees are also subject to approval of either the judge or the District Director of the Office of Workers’ Compensation Programs (OWCP).
HistoryEstablished in 1941, the Defense Base Act (DBA) provides the equivalent of workers' compensation for civilian contractors working in contingency operations in overseas countries such as Iraq and Afghanistan. "As designated by the Secretary of Defense, Operation Enduring Freedom (OEF) in Afghanistan and Operation Iraqi Freedom (OIF) in Iraq are both contingency operations.” The Federal Acquisitions Regulations (FAR) 2.101 defines a Contingency Operation (10 U.S.C. 101(a) (13)) to be a military operation that:"(1) Is designated by the Secretary of Defense as an operation in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force; or
(2) Results in the call or order to, or retention on, active duty of members of the uniformed services under section 688, 12301(a), 12302, 12304, 12305, or 12406 of 10 U.S.C., Chapter 15 of 10 U.S.C, or any other provision of law during a war or during a national emergency declared by the President or Congress."
DBA provides benefits in the event that civilian contractors are injured, killed, or kidnapped in the course of their work for US government agencies such as the various branches of the Department of Defense (DOD), U.S. Agency for International Development, (USAID), or the State Department.
According to government documents, the DBA "program was created to provide workers' compensation protections for categories of workers who were outside the jurisdiction of other state or federal workers' compensation systems. The extensions to the Longshore and Harbor Workers' Compensation Act (LHWCA) were enacted to provide coverage to classes of workers who are not covered under any other statutes.
Contingency contractingAccording to the US Army Standard Procurement System website: "Contingency contracting is direct contracting support to tactical and operational forces engaged in the full spectrum of armed conflict and military operations (both domestic and overseas), including war, other military operations, and disaster or emergency relief."
Contingency contracting, by its very nature of working in close proximity to the battlefield, brings high risks. Civilian contractors deliver much needed supplies and services and, in doing so, often find themselves situated closer and closer to hostilities as competitive outsourcing through the US government's A-76 program increasingly determines the most cost-effective way to fulfill government operations is through the private sector.
Susie Dow explains in her three part series on Iraq, Contingency Contracting and the Defense Base Act that not all contingency contractors are actually covered by DBA insurance. And so in the event of kidnapping, beheading, injury or murder, there is not support for the contractor or his/her family. At best, the implementation of the DBA requiring civilian contractors to be insured has been less than uniform and often inconsistent. : “Four basic laws and their amendments define or influence the coverage required under the Defense Base Act as administered by the US Department of Labor.
- Longshore and Harbor Workers' Compensation Act of 1927
- Defense Base Act of 1941
- Mutual Security Act of 1954
- Dayton Peace Accords of 1995
And, according to the Department of Labor, by July 2006, just three major carriers provide most of the DBA insurance coverage: ACE USA Companies, American International Group (AIG) Companies, and CNA. The Department of Labor has no authority to regulate insurance premium rates. All authorized carriers are regulated by the states in which they operate.
Us Department of Labor Reaches Settlement with Contractor on Failure to Report Injuries and Fatalities under Defense Base Act
Jan 31, 2013; WASHINGTON -- The following information was released by the U.S. Department of Labor: The U.S. Department of Labor's Office of...