Senator proposes reform of federal workers’ compensation program

Sen. Susan Collins of Maine on Wednesday introduced a bill (S. 261) that would reduce federal workforce costs by converting employees on workers' compensation to the appropriate retirement system when they reach retirement age.

"At the U.S. Postal Service, for example, more than 2,000 employees currently receiving federal workers' compensation benefits are 70 years or older," Collins said. "Incredibly, 132 of these individuals are 90 and older and there are three who are 98. This abuse may extend across the government. If recipients are gaming this crucial benefit at taxpayers' expense, they must be exposed and the underlying program must be reformed."

The 1916 Federal Employees' Compensation Act provides basic compensation, along with medical, rehabilitation and death benefits, for government workers injured on the job. The Labor Department's Office of Workers' Compensation Programs administers the benefits paid to about 49,000 federal employees monthly. From July 1, 2009, to June 30, 2010, those payments totaled $2.78 billion, and nearly half went to USPS workers.

"It's possible that a person could right now under the system continue to receive fed workers' [compensation] well past retirement age," said Norman McNulty, a Washington state-based attorney specializing in federal compensation. "The [Postal Service] has profound financial problems. There are a lot of other federal agencies that don't have that much of a problem with the system."

According to the USPS Office of Inspector General, the agency reimburses Labor for all workers' compensation claims. The Postal Service reported losses of $6 billion in fiscal 2010, plus $2.5 billion in workers' compensation liabilities.

"The United States Postal Service has been concerned with this very issue for years," spokesman Mark Saunders said. "During the discussion over the [2006] Postal Accountability and Enhancement Act, the Postal Service suggested amending the Federal Employees' Compensation Act, specifically to address these injured workers who have attained retirement age. Sen. Collins was supportive of that suggestion, but it was not included in the final legislation approved by Congress. We support Sen. Collins' effort to address this issue."