Changes to federal workers’ comp raise many questions, experts say

July 27, 2011

Washington – Proposed changes to the Federal Employees’ Compensation Act could help move injured workers out of the disability system and save money, but doing so brings forth many issues, according to testimony at a July 26 Senate subcommittee hearing.

The Senate Oversight of Government Management, the Federal Workforce and the District of Columbia Subcommittee convened the hearing to examine FECA, which has not been significantly amended in more than 35 years.

The proposed changes include forcing workers who currently receive FECA benefits to retire once they reach retirement age. FECA benefits are tax-free and pay out more compared with benefits received under federal retirement systems.

But changes such as this bring up several questions, including how to compute retirement benefits – which are based on the last three years of salary – when the injured worker has not been working. Under the current proposals, injured workers who see their benefits switched from FECA to a federal retirement system could see a great reduction in income, witnesses from federal employee groups warned.