FECA Death Gratuity Goes Up to 100K

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The Interim final rule and request for comments on the Death Gratuity Under the Federal Employees' Compensation Act (FECA) has been posted in the Federal Register.

The National Defense Authorization Act for Fiscal Year 2008, Public Law 110-181, was enacted on January 28, 2008. Section 1105 of Public Law 110-181 amended the FECA, creating a new section 8102a. The section establishes a new FECA benefit for eligible survivors of Federal employees and NAFI (non-appropriated fund instrumentality employees) who die of injuries incurred in connection with service with an Armed Force in a contingency operation.

“Section 8102a was effective upon enactment of Public Law 110-181, on January 28, 2008. It states that the United States will pay the death gratuity of up to $100,000 to the eligible survivors ``immediately upon receiving official notification'' of an employee's death. The section also contains a retroactive payment provision, stating that the death gratuity will be paid for employees of certain agencies who died on or after October 7, 2001, due to injuries incurred in connection with service with an Armed Force in the theater of operations of Operation Enduring Freedom and Operation Iraqi Freedom. Both the immediate payment provision and the retroactive payment provision strongly suggest that the Department act as quickly as possible to implement section 8102a.” (links added)

Read the whole thing here.

Comments are solicited.

Applicability date: This interim final rule applies to all claims filed on or after August 18, 2009. This rule also applies to any claims that are pending before OWCP on August 18, 2009.

Comments: The Department invites comments on the interim final rule from interested parties. Comments on the interim final rule must be postmarked by October 19, 2009. Written comments on the new information collection requirements in this rule must be postmarked by October 19, 2009.

ADDRESSES: You may submit comments on the interim final rule, identified by Regulatory Information Number (RIN) 1215-AB66, by any ONE of the following methods:

Federal e-Rulemaking Portal: The Internet address to submit comments on the rule is http://www.regulations.gov. Follow the Web site instructions for submitting comments. Or you can go directly to the page for sending comments to this specific rule here. The full text of the interim rule is here.

Mail: Submit written comments to Shelby Hallmark, Director, Office of Workers' Compensation Programs, Employment Standards Administration, U.S. Department of Labor, Room S-3524, 200 Constitution Avenue, NW., Washington, DC 20210. Because of security measures, mail directed to Washington, DC is sometimes delayed. We will only consider comments postmarked by the U.S. Postal Service or other delivery service on or before the deadline for comments.

Instructions: All comments must include the RIN 1215-AB66 for this rulemaking. Receipt of any comments, whether by mail or Internet, will not be acknowledged. Because DOL continues to experience delays in receiving postal mail in the Washington, DC area, commenters are encouraged to submit any comments by mail early.

Examples provided with the interim final rule.

(1) Example One. An employee's survivors are entitled to the Foreign Service Act death gratuity; the employee's spouse received payment in the amount of $80,000 under that Act. A death gratuity is also payable under FECA; the amount of the FECA death gratuity that is payable is a total of $20,000. That employee, using Form CA-40 had designated 50% of the death gratuity under this subpart to be paid to his neighbor John Smith who is still living. So, 50% of the death gratuity will be paid to his spouse and the remaining 50% of the death gratuity paid under this subpart would be paid to John Smith. This means the surviving spouse will receive $10,000 and John Smith will receive $10,000.

(2) Example Two. Employee dies in circumstances that would qualify her for payment of the gratuity under this subpart; her agency has paid the $10,000 death gratuity pursuant to Public Law 104-208. The employee had not completed any designation form. The FECA death gratuity is reduced by the $10,000 death gratuity and employee's spouse receives $90,000.

(3) Example Three. An employee of the Foreign Service whose annual salary is $75,000 dies in circumstances that would qualify for payment of both the Foreign Service Act death gratuity and the death gratuity under this subpart. Before his death, the employee designated that 40% of the death gratuity under this subpart be paid to his cousin Jane Smith, pursuant to the alternate beneficiary designation provision at section 10.908 and that 10% be paid to his uncle John Doe who has since died. At the time of his death, the employee had no surviving spouse, children, parents, or siblings. Therefore, the Foreign Service Act death gratuity will not be paid, because no eligible survivors according to the Foreign Service Act provision exist. The death gratuity under this subpart would equal $100,000, because no other death gratuity has been paid, and Jane would receive $40,000 according to the employee's designation. As John Doe is deceased, no death gratuity may be paid pursuant to the designation of a share of the death gratuity to him.

Data on Injuries and Death since 2004 in Iraq:

The Office of Workers' Compensation Programs (OWCP) has been tracking federal civilian injuries and deaths resulting from incidents or exposures arising in Iraq since March 2004. Through the end of FY 2008, there have been 220 claims accepted for injuries or exposures sustained in Iraq. Of those 220 accepted claims, 14 have been claims arising from the death of the Federal civilian employee.

Data on Injuries and Death since 2007 in Afghanistan:

OWCP also has been tracking Federal civilian injuries and deaths resulting from incidents or exposures arising in Afghanistan, but only since October, 2007. Through the end of FY 2008, there have been 25 claims accepted for injuries or exposures sustained in Afghanistan and only 1 of those claims was for the death of the employee.

OWCP Projects Expenditures:

Based upon these data, OWCP projects about 10 death claims per year as an upper limit estimate. Assuming each claim is paid at the maximum allowable rate, this would result in expenditures of $1 million or less annually. It is important to note, however, that the projection is based on a very limited amount of data and that a single significant event could result in substantially higher than projected expenditures.

Some Questions:

#1. The rule says that “DOL has determined for equitable reasons that every death gratuity will be paid in the amount of $100,000. (The $100,000 gratuity is offset by other death gratuities that have been paid for the same death.)” But how did Labor come up with that figure is what I’d like to know. What went into that calculation?

#2. This rule specifically addresses the death gratuity for Federal employees who “die of injuries incurred in connection with service with an Armed Force in a contingency operation.” Elsewhere, it talks about “injuries incurred in connection with service with an Armed Force in the theater of operations of Operation Enduring Freedom and Operation Iraqi Freedom.”

Okay so -- A) What happens to FS employees who die in terrorist attacks outside the theater of operation? Those that are located in places not considered “service with an Armed Force in a contingency operation?” Wouldn’t this result in a two-system gratuity?

B) Operation Enduring Freedom includes operations in Afghanistan, the Philippines, the Horn of Africa (Eritrea, Djibouti, Ethiopia and Somalia), Trans-Sahara and Kyrgyzstan. USAID officer, John Granville was in Sudan when he was assassinated in 2008; Sudan falling under OEF, his NOK could potentially received retroactive benefit under this new rule. But where does this leave the family of Laurence M. Foley, the US diplomat who was assassinated in Jordan in 2002? Or David Foy who was killed in Pakistan in 2006?

The full text of the interim rule is here. You can also send comments to this rule no later than October 19, 2009; see the comments page here.

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For State, the death benefits for death in the performance of duty under 3 FAM 3650 derives its authority from the following:

(1) Federal Employees' Compensation Act (FECA), 5 U.S.C. 8101-8152; 20 C.F.R. Parts 1, 10 and 25; (2) Title VI, Section 651 of Public Law 104-208 (The Omnibus Consolidated Appropriations Act of 1996), effective September 30, 1996; and (3) Victims of Terrorism Compensation Act, codified in 5 U.S.C. 5570; Executive Order 12598; 22 C.F.R. Part 192.

State’s Bureau of Human Resources explained this below:

Section 413 of the Foreign Service Act, 22 U.S.C. § 3973 The Secretary of State, the Director of AID and the Secretaries of Agriculture and Commerce may provide for payment of a death gratuity in an amount equal to one year's salary of the employee at the time of death to the surviving dependents of any Foreign Service employee who dies as a result of injuries sustained in the performance of duty abroad.

3 FAM 3653.1 on Eligibility: A death gratuity may be payable under section 413 of the Foreign Service Act when any member of the Foreign Service or a U.S. representative to an international organization or commission dies as a result of injuries sustained in the performance of duty abroad (outside the United States) provided that a survivor is entitled to elect monthly compensation benefits under the Federal Employees' Compensation Act (FECA).

According to 3 FAM 3653 Death Gratuity Under Section 413 of the Foreign Service Act of 1980:

The survivor is eligible for one year's salary of the employee at the time of death. For purposes of the death gratuity under Section 413 of the Foreign Service Act, one year’s salary includes the employee’s full annual salary (rate of basic pay) or full cash wage, locality pay, and law enforcement availability pay that the employee was receiving at the time of death.

Title VI, Section 651 of Public Law 104-208 Under Title VI, Section 651 of P.L. 104-208 (the Omnibus Consolidated Appropriations Act of 1996), the head of an agency may pay a death gratuity of up to $10,000 to the personal representative of the deceased employee. The legislative history for this provision indicates that the amount is intended to supplement costs for funeral expenses. This payment may not exceed $10,000 inclusive of the amounts identified in paragraphs (2) and (3) under FECA benefits above. Because $ 1,000 for funeral and administrative payments typically is made under FECA, the amount of this death gratuity payment usually is $9,000. Death benefits under this authority are considered taxable income.

Victims of Terrorism Compensation Act, 5 U.S.C. §5570 and 22 CFR 192

This authority provides for the payment of compensation to eligible dependents or parents by Federal agencies where U.S. Government civilian employees or family members of such employees are killed, if the President determines that the death was caused by hostile action and was the result of the individual’s relationship with the Government. Payment authorized under this authority must be reduced by any other amount payable by the U.S. Government in connection with the death or disability (emphasis added).

[NOTE: Because of the other payments authorized above, including FECA and section 413 of the Foreign Service Act authorizing one year’s salary, this benefit rarely is paid because of the offset provision in the law.]

The President’s authority under the Act was delegated to the Secretary of State, in consultation with the Secretary of Labor. The Department’s regulations at 22 CFR Part 192 implementing 5 U.S.C. §5570 provide that the death benefit payment for either an employee or a family member of an employee is equal to one year’s salary of the principal at the time of death.

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That’s how FSO Howard Kavaler and his two daughters received $65,000 as death gratuity for his wife, Prabhi, a Foreign Service officer who perished in Kenya during the East Africa embassy bombings. Jeff Stein pointed out in this article that “the families of the 1,995 men and women killed in the Sept. 11 attacks were awarded checks averaging nearly $1.5 million each.” 12 Americans were killed in Nairobi. I am jaded; the families of 12 are not enough to move Congress.

H.R. 2410 which passed the House last June did contain a provision (Section 313) that the death gratuity be ‘‘at level II of the Executive Schedule.” As of 2009, that amount is at $177,000.00. H.R. 2410 was referred to Senate committee on June 22, 2009. Current bill status: “Received in the Senate, read twice and referred to the Committee on Foreign Relations.” We’ll keep our eyes on it. But it’s time to write to your representatives in Congress.

Related Items:

• 3 FAM 3653 Death Gratuity Under Section 413 of the Foreign Service Act of 1980
• State Department: Death and Disability Benefits – Iraq and Afghanistan (undated) http://www.rnet.state.gov/forms/Death_Disability_Benefits__Iraq__Afghanistan.pdf