In 1940, the United States government recognized that the 1927 law protecting maritime workers did not go far enough. As a result, the law was expanded. As an extension of the Longshore and Harbor Workers Compensation Act (LHWCA, also known as the Longshore Act), the Defense Base Act is designed to protect civilian employees working outside of the United States on a United States military base or on a job at another location and under contract with the U.S. government, public works, or for national defense. The law requires employers to provide workers’ compensation for their employees – just like maritime employers must provide to their employees under the LHWCA. All of this comes under the US Code, Title 42, Chapter 11, § 1651, et seq.
Specifics on Application
The Defense Base Act, at its essence, provides for compensation and medical care to employees (such as overseas government contractors) who may become disabled due to injuries which happen while working under federal contracts on military bases. And Defense Base Act coverage extends to American-occupied territories, and even to some other overseas locations. The Act also can be used to award benefits to specific survivors and dependents if the employee’s death is caused by his or her injury or occupational disease, such as afflictions like asbestosis. All that is required is that the occupational or disease comes from the claimant’s employment.
The Act covers workers employed in most jobs and under the majority of federal contracts. This also includes any subcontractor or subordinate contract for overseas work, except when the United States Department of Labor specifically waives it. And that only happens in instances when a local alternative workers’ compensation program would apply.
Because employers must guarantee they can pay out both compensation and medical benefits in the event of injuries, the Act requires either they employers cover themselves and their employees with DBA insurance from a Department of Labor-approved commercial liability carrier, or get the Department of Labor’s authorization that they (the employer) can adequately self-insure.
As an employer, you might have any number of questions. Here are some non-legalese answers.
Before we go any further, you may be wondering, just what is DBA insurance?
Or your inquiry might be even more fundamental – what is a DBA?
Fortunately, that’s the easy question. The DBA is just the abbreviation for the Defense Base Act. And the real point behind the Defense Base Act is to offer a species of Workers’ Compensation.
As stated above, the employer must either self-insure with the Department of Labor’s approval, or purchase insurance from an approved Defense Base Act insurance company. And except for a few limited circumstances where the Department of Labor administers a Special Fund to pay benefits, the employer (if self-insured) or the DBA insurer must pay out directly to the claimant or claimants.
In order to help assure employer compliance, the United States Department of Labor provides an up to date list of authorized DBA insurance companies. In 2009, the Department of Defense reported that “government-wide DBA premiums paid to the top four DBA insurance carriers totaled $18 million in 2002”. The top four companies providing Defense Base Act coverage were AIG, ACE, CNA (USACE), and CNA (not USACE). Together, they provided over 97% of all such coverage.
While Defense Base Act insurance rates will change over time, the following example is instructive: in April of 2011, the U. S. government contracted with CNA Insurance and they received the following fixed rates for their insurance:
|Service||$ 3.50||per $100 of employee remuneration|
|Construction||$ 4.25||per $100 of employee remuneration|
|Security||$10.00||per $100 of employee remuneration|
|Aviation||$17.00||per $100 of employee remuneration|
Naturally, your rates will differ, but the above table should give you a ballpark idea of the cost of Defense Base Act workers compensation.
In order to get coverage, go to the Department of Labor’s list of authorized DBA insurance companies, and contact your underwriter. If you are already paying for Longshore Harbor workers compensation, then speak with your underwriter about your company’s DBA insurance requirements.
The Department of Labor outlines several employer requirements. Chief among them involves the timely reporting of claims. According to the U. S. Department of Labor’s website, the employer must report the injury to their DBA insurance company as soon as the employer knows about the injury. And if the injury ends up causing the loss of one or more work shifts, then the employer has to inform the OWCP (Office of Workers’ Compensation Programs) Central Case Create Site within ten (10) days. Plus of course all medical treatment must be authorized immediately.
In addition, the employer must post the fact that they have secured compensation under the Act. This information (it incorporates the LHWCA’s similar provision) must be posted in a conspicuous place in and about the employer’s place of business. And that notice must also contain the name and address of the employer representative the employees must give notice of injury to. The notice also has to list the DBA insurance carrier, if any, with whom the employer has secured payment of compensation and the date the policy is going to expire.
Taking Care of Claims
Beyond reporting to their DBA insurance company in ten days and reporting to the OWCP regarding any shift issues, the essentials of Defense Base Act claims are rather similar to those under the Longshore and Harbor Workers’ Compensation Act (and, in fact, the U. S. Department of Labor will just refer you to their LHWCA page). As with any insurance matter, the case will be assigned to a claims adjuster who will be responsible for the matter.
Employees usually are awarded compensation at a rate of around 2/3 of their average weekly wage. There are certain maximum weekly rates which kick in, plus this only continues so long as the injury’s effects persist. And in the event of an employee’s death, the surviving spouse is paid half of the deceased’s average weekly wage. Plus any surviving children are compensated at the rate of an added 16 2/3% on their behalf.
Finally, you might want to talk to a Defense Base Act lawyer, particularly if the employee’s injury may permanently disable them, or if the employee has died. At the Moschetta Law Firm, we are highly trained and specialized. We are committed to helping you. Find your Defense Base Act attorney here at our firm.