Last month, the Division of Federal Employees Compensation (“DFEC”) published FECA Bulletin No. 18-03. The bulletin addresses how the government agency will process an insurance carrier’s claims for reimbursement under the War Hazards Compensation Act (“WHCA”). Carriers apply for WHCA reimbursement after they pay a disabled contractor’s benefits pursuant to the Defense Base Act (“DBA”).
FECA Bulletin No. 18-03 addresses psychological injuries, and the evidence that a carrier needs to submit to the government to receive reimbursement of the benefits it paid to the contractor.
For some time now, insurance carriers have been concerned about the reception their evidence would receive at DFEC when applying for reimbursement. The concern was that the evidence they submitted would be too general or vague to warrant reimbursement. This concern trickled down into the underlying DBA claim, causing additional litigation for injured workers.
With any luck, FECA Bulletin No. 18-03 will also trickle down into the underlying DBA claim, alleviating unnecessary litigation for injured workers.
A Rebuttable Presumption:
Ever since DFEC published the Bulletin, I have returned to one provision, which addresses the evidence needed to show an injured worker’s exposure to injurious war events overseas. That provision states:
When establishing exposure in or around a facility, base, encampment or other similar location/structure, the following guidelines may be followed:
Where the documentation demonstrates that the employee in question was employed or working at a facility, etc., at the same time that such facility was subjected to the occurrence of one or more war-risk hazards, it is reasonable to conclude that the employee was personally exposed to such war-risk hazard, unless there is evidence to the contrary.
Example 1: News accounts confirm that a particular camp underwent regular bombing during January-March of a given year and the individual in question was employed as a security guard at that camp during this same period. Exposure to a war risk hazard will be considered established.
Example 2: Evidence establishes that the individual was employed in Afghanistan during Operation Enduring Freedom without specifying the individual’s employment, specific location or the war risk hazard encountered. Exposure to a war risk hazard has not been established based on the mere presence of an individual in an area where military operations were conducted.
Essentially, if an injured person works on a base that was attacked, then it can be presumed that the person working on the base was attacked as well. An attack on a base is an attack on an employee at that base.
DFEC went one step further to explain the type of evidence that will prove the existence of an injurious attack. It wants more than a vague, general explanation of the war-risk hazard. For example, a carrier will not satisfy its WHCA burden by simply stating that a psychologically-injured employee worked in CENTCOM. There must be something more than a reference to the dangers of a war theater.
The “something more” is specifics about base assignments and attacks that an injured worker’s specific base experienced. DFEC recognizes that some attacks will garner more media attention than others–as indicated by DFEC’s reference in Example 1 to news accounts. But, DFEC also recognizes that the media does not report on every single mortar that a base receives–as indicated by DFEC’s reference in Example 1 to a two-month period of “regular” bombing.
Finding Evidence of “Regular” Bombings:
I have long been an advocate of using newspaper articles as evidence, both for an injured worker’s DBA claim and an insurance carrier’s WHCA claim. DFEC has confirmed that it will accept those articles as evidence.
But, there are more documents available.
For example, many employers keep records of indirect fire received on each base where their employees work. In my experience, these attack lists are not exhaustive. Nonetheless, these lists identify the date of an attack, the time of incident, the time when the “all clear” notification was given, and the type of incident that occurred (e.g., indirect fire, RPG, VBIED, etc.)
Employers might also keep accountability rosters. Once the “all clear” notification is given, employees check in with their supervisors. Then, the supervisor confirms in writing–typically on an Excel spreadsheet–that the employee checked in.
There are often e-mails exchanged from an employer to its employees–usually in a mass e-mail to all employees on a particular base–when there are instances of heightened security. During those periods of heightened security, employees may be required to wear personal protective equipment when leaving hardened structures. For example, after the November 12, 2016 suicide bombing at Bagram Airfield, contractors had to wear personal protective equipment and badges at all times. Security was heightened for days, pending military threat assessment.
Typically, this employer-controlled information is provided to a DBA claimant after the claimant propounds requests for production of documents on the carrier. Employers keep this information in the regular course of business. Administrative Law Judges have compelled production of these documents when necessary, recognizing that claimants “may not have maintained copies of exact dates and locations of the attacks.”
Lately, I have seen insurance carriers produce these documents more readily, understanding that this same information will be disclosed to the government when they apply for WHCA reimbursement. Every so often, however, I receive unbelievable statements claiming that major bases had no attacks for the lengthy period of time when an injured worker was employed on that base. My response when reading such denials is usually something along these lines:
Litigation Requirements for Carriers:
All joking aside, there are some litigation requirements for insurance carriers when it comes to DBA claims that have a WHCA component. The Code of Federal Regulations, at 20 C.F.R. 61.102, states:
(e) In determining whether a claim is reimbursable, [DFEC] shall hold the carrier to the same degree of care and prudence as any individual or corporation in the protection of its interests or the handling of its affairs would be expected to exercise under similar circumstances. A part or an item of a claim [for reimbursement] may be disapproved if [DFEC] finds that the carrier –
(1) Failed to take advantage of any right accruing by assignment or subrogation . . . due to the liability of a third party, unless the financial condition of the third party or the facts and circumstances surrounding the liability justify the failure;
(2) Failed to take reasonable measures to contest, reduce, or terminate its liability by appropriate available procedure under workers’ compensation law or otherwise; or
(3) Failed to make reasonable and adequate investigation or injury [sic] as to the right of any person to any benefit or payment; or
(4) Failed to avoid augmentation of liability by reason of delay in recognizing or discharging a compensation claimant’s right to benefits.
Under Section 61.102, a carrier shall take reasonable measures to contest, reduce or terminate is liability; shall investigate the right of a person to benefits; and shall avoid augmentation of liability by reason of delay.
It would seem that the Code of Federal Regulations would require a employer to start its investigation of exposure to psychologically injurious working conditions by looking at its own records. Doing so could very well avoid a delay that could augment liability.
Moreover, employers and carriers have been admonished not to over-litigate DBA claims. On October 6, 2011, the Office of Workers’ Compensation Programs issued OWCP Bulletin No. 12-01. Pursuant to that bulletin, a carrier must make reasonable and prudent efforts in presenting meritorious defenses. But, a carrier may not engage in “overly zealous representation in defending against a DBA claim.” Doing so “may be grounds for denying all or some portion of a request for WHCA reimbursement.”
Dollars and Sense:
Does FECA Bulletin No. 18-03 alter the definition of “overly zealous representation?” Maybe so. In its bulletin, DFEC wrote that evidence of a specific attack or time period of attacks that occurred at a base where the claimant was stationed is sufficient for WHCA reimbursement. But, the carrier would only be in the position to be reimbursed if the underlying DBA claim was compensable to begin with. It follows, then, that the evidence sufficient for WHCA reimbursement is more than sufficient for the underlying DBA claim.
An injured worker’s employment on a base which was attacked is easy enough to find. The information is readily discoverable. Perhaps “overly zealous representation” that “augments liability” can be found in refusal to provide such information absent a court order.
FECA Bulletin No. 18-03 could change a carrier’s perception of the strength of its WHCA reimbursement evidence. In so doing, the bulletin could–and, indeed, should–affect how the carrier litigates the DBA portion of the claim.