Benefits under the Defense Base Act (DBA) for U.S. Civilian Contractors

Post Date: November 2, 2020 | Category: Frequently Asked Questions, General Information

The Defense Base Act provides workers' compensation protection to civilian employees working outside the United States on U.S. military bases or under a contract with the U.S. government for public works or for national defense.

This general information regarding the Defense Base Act that may be of interest to government contracting officials, U.S. government contractors, insurance professionals, covered employees and their families, and others in the workers' compensation claims community.

Benefits Under the DBA

• Medical Treatment
• Disability Compensation
• Death Benefits
• Vocational Rehabilitation

Medical Benefits

• Medical Treatment by a physician of the employee’s choice.
• Medical care must be related to the employment injury or illness.
• Medical treatment is payable for as long as the injury or illness requires.

Disability Benefits

• Temporary Total
• Temporary Partial
• Permanent Total with annual increases
• Permanent Partial
– Based upon wage loss (unscheduled)
– Based upon percent of loss of use of specified body part (scheduled)

Compensation is Determined by Average Weekly Wage (AWW)

• Temporary Total (TTD): 2/3 of the AWW
• Temporary Partial (TPD): 2/3 of employee’s loss of wages
• Permanent Total (PTD): 2/3 of the AWW
• Permanent Partial (PPD):
• 2/3 of loss of earning capacity ( 2/3 unscheduled PPD) or,
• TTD for a defined number of weeks for a % of permanent impairment of a scheduled body part (scheduled PPD)

Maximum & Minimum

• Compensation is subject to a Maximum Compensation Rate, which is adjusted annually.
• There is no Minimum Compensation Rate under the DBA.

Example 1: Truck driver earning $37,700/year w/injuries to back and right arm

• AWW: $37,700 ÷ 52 = $725
• TTD: 2/3 x $725 = $483
• PTD: 2/3 x $725 = $483
• PPD Unscheduled wage loss: 2/3 x ($725 – 300) = $283
• PPD Scheduled body part: 50% x 312 weeks x $725 = $113,100

Example 2: Same truck driver earning $95,000/yr in Iraq

• AWW: $95,000 ÷ 52 = $1,826.92
• TTD: 2/3 x $1,826.92 = $1,200.62 (max)
• PTD: 2/3 x $1,826.92 = $1,200.62 (max)
• PPD unscheduled wage loss: 2/3 x ($1,826.92 – $300) = $1,017.97
• PPD scheduled body part: 50% x 312 weeks x $1,200.62 = $187,296.72

CALCULATING AWW

• Section 10 – compensation is based on AWW and calculated as follows:
• (a) earnings ÷ days worked x 300/260
• (b) same as similarly situated employee
• (c) “reasonable” estimate of earning capacity at the time of injury

Death Benefits

• Burial Expenses of up to $3,000.
• 50% of AWW for the surviving spouse, or if no spouse, for one surviving child.
• 16⅔ of AWW for one or more surviving children, shared equally, in addition to the 50% for spouse and one child.
• Child benefit is paid up to age 18, student benefit through age 23 if in school fulltime.

Annual Adjustment

• Permanent total disability and death benefits are subject to annual adjustment (increase) based on U.S. national average weekly earnings as reported by the Bureau of Labor Statistics.
• Annual adjustments are applied on October 1 of each year.

Lifetime Disability Payments

• Permanent disability is payable as long as disability continues. Spousal death benefit is payable for life, unless remarried.
• A 40 year old earning $1,500/week will receive permanent total disability benefits over his 35 year life expectancy: @ $1,000 x 52 weeks x 35 years = $1,820,000, not including cost of living adjustments.

Lifetime Death Benefits

• If the same employee had been killed, his 30 year old widow and 2 infant children will receive over the life of the claim in excess of $2,000,000, not including annual adjustments.
• Widow @ $750 x 52 weeks x 45 years = $1,755,000
• Children @ $250 x 52 x 21 years = $273,000

Commutation

• Permanent disability and death benefits payable to aliens and non-US citizens residing outside the US may be commuted.
• Commuted benefit is equal to one half of the present value of future compensation, paid in one lump sum.

Other Benefits

• Vocational Rehabilitation services for permanently disabled employees unable to return to employment without assistance.
• Currently rehabilitation services are only available to those permanently disabled employees residing in the United States.


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