Skip to page content
Office of Workers' Compensation Programs
Bookmark and Share

Division of Federal Employees' Compensation (DFEC)

Federal Employees' Compensation Act

The Federal Employees' Compensation Act provides workers' compensation coverage to three million Federal and Postal workers including wage replacement, medical and vocational rehabilitation benefits for work-related injury and occupational disease. FECA's low administrative cost means that overhead is only 4% of benefits, and Federal workers compensation costs are only 1.8% of total Federal and Postal payroll, compared to 2.3% for private insurance and state funds.

A COST-EFFECTIVE SELF-INSURANCE SYSTEM

FECA protects three million Federal workers from economic hardship due to work injury and illness. Included among the executive, legislative and judicial branch employees covered by FECA are civilian Defense workers, medical workers in Veterans' hospitals, and the 800,000 workers of the Postal Service, the country's largest civilian employer.

FECA is a highly cost-effective self-insurance system. Overhead is low, and because the system is non-adversarial, the Federal government avoids time-consuming and expensive litigation, which in some non-Federal workers' compensation systems can amount to as much as 46% of payout.

PUTTING CUSTOMERS FIRST

FECA is a customer-service-oriented, high performance workplace. For instance, in the tragic attack on Federal workers in Oklahoma City in April, 1995, FECA was on site within 24 hours, processing claims for survivor benefits from bereaved families and benefits for injured Federal workers. OWCP assigned nurses who visited injured workers in the hospital; arranged for prompt payment of benefits and medical care; and coordinated all service with employers and the Office of Personnel Management to ensure quality service.

After a period of difficult budget years in the 1980's with declining staff, increasing workloads and increased benefit costs, FECA in 1992-3 began a comprehensive review of its long-term disability roll, adopted medical cost containment measures such as the Medicare fee schedule, and provides total case management resulting in effective return to work for newly injured workers. Registered nurses intervene early in the disability period and work with physicians and agencies to return workers safely to work. These measures have been successful in reining in costs. In the last four quarters, medical costs declined by 6% from the previous year, and wage loss benefits also declined when adjusted for cost-of-living increases for the second straight year.

A NON-ADVERSARIAL SYSTEM

Disputes under the FECA are resolved through informal conferences or formal reconsideration at the district office level, through administrative hearing, or review by the independent Employees' Compensation Appeals Board whose decision is final. Thus employers avoid high legal costs and time-consuming litigation.