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DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
DBA Basics for USAID Contractors & Grantees
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DBA Basics for USAID Contractors & Grantees

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  • 1. EXPLAINING DEFENSE BASE ACT INSURANCE BENEFITS FOR EXPATRIATE AND COOPERATING COUNTRY NATIONAL EMPLOYEES UNDER USAID CONTRACTS AND GRANT Prepared for Lost in Regulation Blog usaidtrainer@gmail.com 8/23/2010 1
  • 2. WHAT IS DBA? The DBA is an extension of the Longshore and Harbor Workers’ Compensation Act (LHWCA) which provides disability compensation and medical benefits to employees and death benefits to eligible survivors of employees of U.S. government contractors who perform work overseas. With a few exceptions, the DBA incorporates the provisions of the LHWCA.
  • 3. WHO IS COVERED BY DBA? Mandatory: All Direct Employees of Contractors under USAID Contracts, including Local Hires and Third Country Nationals If elected (Allowable Cost): All Direct Employees of prime recipients under USAID Grants and Cooperative Agreements, including Local Hires and Third Country Nationals Applies regardless of length of employment or type of employment agreement. Applies to Home Office personnel traveling on TDY under covered Contracts or Grants.
  • 4. WHEN DOES THE COVERAGE APPLY? When you become an employee by signing your employment contract HQ Staff - the day you leave CONUS on TDY Cover applies to all employees under covered USAID contracts and grants There is no exclusion for directors or officers There is no exclusion for companies with a minimum number of employees Independent contractors may well be covered DBA is the employer’s exclusive liability and the employee’s exclusive remedy
  • 5. DBA AND SUBCONTRACTORS UNDER PRIME CONTRACTS WITH USAID All Subcontractors under Prime USAID Contracts must obtain DBA coverage for their employees and present proof of policy to Prime Contractor Applies to foreign companies hiring third county nationals Applies to contracts where the administrator and employees are all foreign nationals Cannot be waived on grounds of cost Cannot be waived on grounds of country of origin of worker If Subcontractor does not procure coverage, the Prime Contractor is responsible and may be sued by subcontractor employees
  • 6. DBA AND SUBCONTRACTORS UNDER GRANTS AND COOPERATIVE AGREEMENTS WITH USAID Under Vendor Services Contracts (not POs or Contracts for supplies, goods, commodities), DBA must be obtained by Vendors/Subcontractors (22CFR226 Appendix A) Prime can assist getting the policy and paying the premium but vendor contractor must administer claims for its employees Only applies to the first tier vendor contractors and their direct employees Applies to foreign companies hiring third county nationals Cannot be waived on grounds of cost Cannot be waived on grounds of country of origin of worker If vendor does not have coverage, the Prime may be responsible for vendor’s injured or deceased employees
  • 7. WHO ADMINISTERS DBA BENEFITS? The U. S. Department of Labor, Office of Workers’ Compensation Programs (OWCP), Division of Longshore and Harbor Workers’ Compensation (DLHWC), administers the DBA through eleven district offices located throughout the United States
  • 8. WHAT TO DO IN CASE OF INJURY OR DEATH HR Coordinators The employer must report a claim within ten (10) days from the date of injury or death or from the date the employer first has knowledge of an injury or death Submit a report of injury or death by completing LS-202 “Employer’s First Report of Injury or Occupational Illness” to the Insurance Provider and Department of Labor. Provide additional documentation as requested Insurance Provider promptly
  • 9. WHAT INFORMATION IS NEEDED ? FIRST REPORT Description of the accident Description of the injuries or illness Location, date and time of the occurrence Injured employee’s: Name Nationality (U.S. National, 3rd Country National, Local National) Address, Phone number Country in which he/she works Description of the employee’s current ability to work The name, phone number and fax number of the person to contact for issues involving this claim (if other than you)
  • 10. WHAT INFORMATION IS NEEDED ? REPORT OF DEATH Exact date of birth Copy of Death Certificate Exact address of the deceased Address of the doctors and hospital which provided treatment if any First information report, about the accident, filed with Police Addresses and income certificate from the employer. (Form LS- 200 – shows average weekly pay for the last 52 week prior to death) Information on all dependents, including contact information (address and phone), and dates of birth Marriage Certificate for spouse, if any Birth Certificates for any dependent children Contact information for witnesses, if any
  • 11. WHAT HAPPENS NEXT….. INJURY/DISABILITY You must authorize medical treatment immediately. Once report is submitted to the Insurance Provider, you will receive: Acknowledgement of claim, including: Claim number Adjuster name, address and phone number Further instructions/actions to take Thorough investigation – Completed within 14 days Return-to-work assistance – Adjuster will work with you, the employee and the physician to optimize medical care and facilitate a healthy return to work
  • 12. WHAT HAPPENS NEXT….. DEATH Once report is submitted to Insurance Provider, you will receive: Acknowledgement of claim, including: Copy of the LS-202 Claim number Adjuster name, address and phone number Further instructions/actions to take The Adjuster will keep you updated Phone calls returned within one day by Insurance Adjuster Written communication responded to within five days Thorough investigation – Completed within 14 days All claims are paid within 3 days of the final resolution
  • 13. BENEFITS UNDER DBA Medical Treatment Disability Compensation Death Benefits Vocational Rehabilitation
  • 14. BENEFITS UNDER DBA 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
  • 15. BENEFITS UNDER DBA Disability Benefits Temporary Total (TTD) Temporary Partial (TPD) Permanent Total with annual increases (PTD) Permanent Partial (PPD) 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 (unscheduled PPD) or, TTD for a defined number of weeks for a % of permanent impairment of a scheduled body part (scheduled PPD)
  • 16. BENEFITS UNDER DBA Maximum & Minimum Compensation is subject to a Maximum Compensation Rate, which is adjusted annually. Current Maximum 10/01/2009 - 09/30/2010 = $1,224.66 per week. Next increase is on 10/01/2010 There is no Minimum Compensation Rate under the DBA.
  • 17. BENEFITS UNDER DBA Example 1: An engineer 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
  • 18. BENEFITS UNDER DBA Example 2: Same engineer earning $95,000/yr in Afghanistan AWW: $95,000 ÷ 52 = $1,826.92 TTD: 2/3 x $1,826.92 = capped at $1,224.66 (max) PTD: 2/3 x $1,826.92 = capped at $1,224.66(max) PPD unscheduled wage loss: 2/3 x ($1,826.92 – $300) = $1,145.19 PPD scheduled body part: 50% x 312 weeks x $1,224.66 = $191,046.96
  • 19. BENEFITS UNDER DBA Death Benefits Burial Expenses of up to $3,000 (must present receipts) 50% of Average Weekly Wage (AWW) for the surviving spouse, or if no spouse, for one surviving child 16⅔ of AWW for one or more surviving children, shared equally. If no surviving spouse, all children will get 66.75 % of AWW shared equally between them. Child benefit is paid up to age 18, student benefit through age 23 if in school fulltime If no surviving spouse or children, other dependents may qualify for 20%-25% of the AWW (siblings, parents, grandparents) For non-US citizens whose dependents reside in foreign country, only widow, children or dependent parents will qualify If there are no surviving depends, a death payment of $5,000 is made to the Special Fund at US Treasury
  • 20. BENEFITS UNDER DBA Lifetime Disability Payments Permanent disability is payable as long as disability continues. A 40 year old earning $1,500/week will receive permanent total disability benefits over his 35 year life expectancy: @ $1,000 (2/3 of AWW) x 52 weeks x 35 years = $1,820,000, not including cost of living adjustments.
  • 21. BENEFITS UNDER DBA 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 almost $2,000,000, not including annual adjustments. Widow @ $750 (50% of $1,500) x 52 weeks x 45 years = $1,755,000 Children @ $250 (16 2/3 of $1,500) x 52 x 18 years = $234,000 If the widow re-marries, benefits will cease, but DBA will pay out a one time lump sum payment equal to 2 years of benefits to the widow ($78,000 in the case above). However, children will continue receiving monthly benefit till the age of 18 (or 23 for students).
  • 22. BENEFITS UNDER DBA Commutation for non-US nationals Permanent disability and death benefits payable to aliens and non- US citizens residing outside the US may be commuted – normally after a few years. Commuted benefit is equal to one half of the present value of future compensation, paid in one lump sum.
  • 23. BENEFITS UNDER DBA For example If an Afghan employee, earning $200 per week had been killed, his 30 year old widow and 2 infant children will receive over the life of the claim in excess of $250,000 Widow @ $100 (50% of $200) x 52 weeks x 45 years = $234,000 Children @ $33.20 (16 2/3 of $200) x 52 x 18 years = $31,075 If the widow re-marries, benefits will cease, but DBA will pay out a one time lump sum payment equal to 2 years of benefits to the widow ($10,400 in the case above). However, children will continue receiving monthly benefit till the age of 18 (or 23 for students).
  • 24. BENEFITS UNDER DBA If after several years (let’s say after 5 years), DBA provider feels that the widow will not remarry, they will commute the benefit as follows: Estimated Present Value of Benefits for Widow @ $100 (50% of $200) x 52 weeks x 40 years = $208,000 Commuted Pay out to the widow = $104,000 All payments will only be made to the widow’s own bank account.
  • 25. RESOURCES US Department of Labor Division of Longshore and Harbor Workers' Compensation (DLHWC) DBA Page http://www.dol.gov/owcp/dlhwc/lsdba.htm

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