Federal (EEOICPA) Procedure Manual Chapter 3-0400 

Part 3 - Fiscal Tort Action and 

Election of Remedies 

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TABLE OF CONTENTS 

Paragraph and Subject Page Date Trans. No. 

Chapter 3-0400 Tort Action and Election of Remedies 

Table of Contents. . . . . . . . i 09/09 09-10

 1 Purpose and Scope. . . . . . . . 1 09/09 09-10

 2 Authority. . . . . . . . . . . . 1 09/09 09-10

 3 Signed Response Regarding 

 Lawsuit, State Workers’ 

 Compensation Claim and Fraud . 1 09/09 09-10

 4 Developing for Lawsuit . . . . . 3 09/09 09-10

 5 Evaluating Lawsuit Documents . . 4 09/09 09-10

 6 Election of Remedies, Part B . . 6 09/09 09-10

 7 Tort Offset, Parts B and/or E . 8 09/09 09-10

 8 Pending Tort Settlement Payment. 9 09/09 09-10

 9 Required Tort Offset . . . . . . 10 09/09 09-10

 10 Actions to Absorb Surplus. . . . 12 09/09 09-10

Exhibit 

 1 EEOICPA Parts B/E Benefits 

 Offset Worksheet 

 (with instructions). . . . . . 09/09 09-10

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1. Purpose and Scope. This chapter describes procedures to 

determine if a claimant is eligible to receive Part B benefits 

because of a lawsuit filed against a beryllium vendor or atomic 

weapons employer due to the “election of remedies” provision of 

the EEOICPA. It also describes procedures for offsetting 

(reducing) EEOICPA benefits if the claimant is eligible to 

receive EEOICPA benefits but received settlement from a lawsuit 

for injuries resulting from exposure to the same toxic substance 

for which EEOICPA benefits are payable. 

2. Authority. 42 U.S.C. § 7385 requires the offset for certain 

EEOICPA payments. 42 U.S.C. § 7385d requires the election of 

remedies for Part B beryllium vendor and atomic weapons employer 

employees. 

 

3. Signed Response Regarding Lawsuit, State Workers’ 

Compensation Claim and Fraud. Before a claim can be accepted 

under the Act, the claimant must provide a signed response 

(affidavit) reporting whether a lawsuit had been filed for 

exposure to the same toxic substance for which EEOICPA benefits 

are payable, or whether a state workers’ compensation (SWC) 

claim had been filed for the same medical condition(s), or 

whether the claimant has ever pled guilty to or been convicted 

of fraud in connection with an application for or receipt of any 

federal or state workers’ compensation. This signed response 

must be obtained regardless of the information contained on the 

forms EE-1 or EE-2 related to these three questions. 

a. The CE may call the claimant to get an initial verbal 

response to the three questions. If the claimant confirms 

verbally or submits a signed response that he/she has not 

filed a lawsuit, SWC claim, or pled guilty to or been 

convicted of fraud, the CE may proceed with issuance of the 

Recommended Decision (RD). 

Since a signed response from the claimant must be included 

in the case file before issuance of the Final Decision 

(FD), the CE follows up with a development letter 

requesting the signed response from each claimant before 

transferring the case to the Final Adjudication Branch 

(FAB). The development letter must be claim specific and 

clearly note that by signing the written response, the 

claimant agrees to report any changes to the information 

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Election of Remedies 

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3. Signed Response Regarding Lawsuit, State Workers’ 

Compensation Claim and Fraud. (Continued) 

provided in the response, immediately, to DEEOIC. The CE 

also advises the claimant that failure to submit a signed 

response will result in administrative closure of the 

claim. 

b. If the CE is unable to obtain a verbal response from 

the claimant or the claimant responds affirmatively to any 

one of the questions, or evidence in the case file 

indicates that a lawsuit, SWC claim or fraud was filed or 

committed, the CE cannot issue a RD without further 

development and clarification. The CE may consider 

administrative closure of the claim if the claimant is not 

responsive to the development request for clarification but 

only as a last resort, and after at least two development 

letters. 

c. It is the responsibility of the FAB to obtain this 

signed response if a RD is issued without receipt of the 

signed response (i.e. the CE only received verbal 

confirmation). The FAB makes every effort to obtain this 

signed response including calling the claimant and sending 

a follow up development letter. However, if the FAB is 

unable to obtain the signed response after 30 days from the 

FAB’s follow up development letter, the FAB remands the 

case to the district office for administrative closure of 

the claim. The FAB sends a letter advising the claimant of 

this course of action. 

d. If the case is with the FAB, and there is evidence in 

the case file of a lawsuit, a SWC claim, or fraud in 

connection with an application for or receipt of workers’ 

compensation that may impact the claimant’s EEOICPA 

benefits, further development must be undertaken. If the 

matter could be clarified by a telephone call, the FAB 

takes this action. If the matter requires extensive 

development, the case is to be remanded to the district 

office for further development. 

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3. Signed Response Regarding Lawsuit, State Workers’ 

Compensation Claim and Fraud. (Continued) 

e. By signing the written response, the claimant agrees 

to notify DEEOIC of any changes in the information provided 

in regards to the lawsuit/SWC/fraud statement. It is not 

necessary to request this information again unless there is 

a new exposure or illness (including consequential) being 

accepted under EEOICPA. For instance, if the claimant had 

submitted a written response for lung cancer and is now 

filing a claim for a consequential condition of bone 

cancer, a new written response regarding the bone cancer is 

required before this consequential condition may be 

accepted under the Act. 

4. Developing for Lawsuit. If the claimant reports, or the 

evidence indicates, that a lawsuit was filed (regardless of what 

type, what happened, when it was filed or who filed it), the CE 

develops for verification of the lawsuit and lawsuit payments 

received. 

a. Contact with Claimant. The CE confirms with the 

claimant as to whether a lawsuit was filed and requests 

documents related to the lawsuit if one was filed. The CE 

requests copies of any complaint, settlement document, 

award from a judge/jury, and settlement sheet from the 

legal proceeding. If the claimant states that he or she is 

not legally permitted to disclose the information, it may 

be possible to persuade him or her to do so based on the 

Privacy Act protections in place for claims filed under the 

EEOICPA. 

b. Contact with Attorney/Law Firm. The CE advises the 

claimant to contact the attorney who filed the lawsuit to 

obtain copies of required documents if the claimant does 

not have them. If the claimant is elderly or he or she is 

confused as to the type of documents that are required, the 

CE may need to directly contact the attorney. If the 

attorney considers the release on the bottom of Form EE-1 

or Form EE-2 to be legally insufficient to authorize the 

release of the required document, the CE requests a 

separate written release from the claimant. 

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4. Developing for Lawsuit. (Continued) 

If the attorney is no longer with the law firm, the CE 

attempts to find out who in the law firm inherited the 

attorney’s clients, or where the records are stored. 

c. Information from Other Sources. If information is not 

available from the claimant or the law firm, the CE 

attempts to obtain it from other sources. Some information 

can be obtained from the court where the matter was 

litigated, such as the complaint, judge or jury award (if 

any), and pertinent court orders. 

d. Initial Development Letter. The CE follows up with a 

development letter to the claimant explaining the need for 

the lawsuit documents and requesting a response within 30 

days. The CE requests documents as noted in paragraph 4a. 

The letter indicates that failure to comply with the 

request may result in an administrative closure of the 

claim. 

 

e. No Response. If there is no response to the initial 

development letter after 30 days, the CE sends a second 

development letter. The second development letter informs 

the claimant that the requested information must be 

submitted before the claim can be fully adjudicated, and 

the claim will be administratively closed if no response is 

received. 

f. Administrative Closure. The CE may administratively 

close the file after two development letters are sent, if 

no response is received from the claimant and the CE is 

unable to obtain the lawsuit documents from other sources. 

5. Evaluating Lawsuit Documents. Once the CE has obtained the 

necessary documents regarding the lawsuit, he or she must review 

them to see what impact, if any, the lawsuit will have on the 

claim. 

a. Complaint. A complaint is a legal document in which 

the plaintiff alleges that certain events took place 

involving exposures to toxic substances and that those 

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5. Evaluating Lawsuit Documents. (Continued) 

events were the fault of the defendant(s). The complaint 

asks for certain remedies (payment for the resulting 

medical condition). From the complaint, the CE can discern 

the reason why the plaintiff filed the lawsuit, the 

identity of the plaintiff, the identity of the defendant 

and the date the lawsuit was filed. 

(1) The CE determines if the alleged exposures raised 

by the plaintiff were the same as the exposures for 

which EEOICPA benefits are claimed. There may be some 

exposures alleged by the plaintiff in the complaint 

that are not exposures for which EEOICPA benefits can 

be paid (non-employment exposures). 

(2) The CE must thoroughly understand the basis for 

the lawsuit (e.g., whether the plaintiff alleged that 

he or she was exposed as a worker rather than just as 

an individual who lived in a particular locale). 

(3) The CE also determines the identities of the 

parties to the lawsuit. To do so, the CE may need to 

inquire whether any later amended complaints were also 

filed. 

b. Settlement Sheet. A settlement sheet is basically a 

billing document. It lists the amounts received from a 

defendant and attorney fees and other costs that are being 

charged against those amounts. However, there may not be a 

document entitled “Settlement Sheet.” Instead, a CE may 

receive a document that simply lists the name of each 

defendant and the amount that the defendant paid to settle 

the suit. The CE needs to be able to determine how much 

the plaintiff/claimant actually received. 

When a settlement sheet lists the amount of the “costs” of 

bringing the lawsuit (not the attorney fees that are being 

charged), the CE must insist on an itemized list of costs, 

if they are not already itemized on the settlement sheet. 

If the legal costs are not itemized, the CE may not deduct 

the legal costs in calculating the amount of offset. 

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5. Evaluating Lawsuit Documents. (Continued) 

c. Court Orders. If the lawsuit was not settled, the CE 

may be provided with an order of a judge, or a jury award, 

that states the amount that the defendant must pay to the 

plaintiff and the reason for payment of that amount. 

d. Bankruptcy. If a claimant receives a settlement in a 

bankruptcy proceeding, such settlement is treated like any 

other settlement for purposes of the offset. The CE 

requests the settlement sheet from the claimant's attorney, 

as outlined above. 

6. Election of Remedies, Part B. Depending on the 

circumstances of the lawsuit and the Part B claim, the claimant 

may no longer be eligible for EEOICPA Part B benefits based on 

the “election of remedies” provision under the Act. The election 

of remedies provision does not apply to Part E benefits. 

Different scenarios are discussed below: 

a. Lawsuit against Atomics Weapons Employer (AWE) or 

Beryllium Vendor. The “election of remedies” provision 

applies only to Part B claimants who have filed a lawsuit 

against either an AWE or a beryllium vendor. To determine 

if this provision applies to a Part B claim involving a 

lawsuit, the CE must determine if the otherwise eligible 

claimant was the same person who filed the lawsuit, if the 

lawsuit was against an AWE or a beryllium vendor, and if 

the lawsuit was for employment-related exposure to either 

radiation or beryllium. If the answer to all three of these 

questions is yes, further development is required, based on 

the date that the lawsuit was filed. 

b. Lawsuits Filed Before October 30, 2000, Terminated 

Prior to December 28, 2001. For lawsuits in this category, 

“terminated” means that the lawsuit was concluded in any

way: the parties settled, after which the suit was 

dismissed by the judge; the claimant won the case; or even 

that the claimant lost the case (judgment was granted for 

the defendants). This meaning of “terminated” applies to 

this time period only.

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6. Election of Remedies, Part B. (Continued) 

The CE must look for proof that the matter has been 

resolved, regardless of the outcome. If the CE finds that 

the matter was terminated before December 28, 2001, the 

claimant is not disqualified from receiving any Part B 

benefits. The CE must include a finding in the recommended 

decision that the lawsuit did not cause the claimant to be 

disqualified. 

c. Lawsuits Filed Before October 30, 2000, Still Pending 

as of December 28, 2001. For lawsuits in this category, the 

CE will need to determine if the claimant dismissed all 

claims in the suit that arose out of the same employmentrelated exposure to either beryllium or radiation that is 

the basis for the Part B claim by December 31, 2003. 

Unlike the situation discussed on paragraph 6b, the suit 

must be dismissed, rather than merely terminated. That 

means that there must not be a final judgment in the suit 

for either the claimant or the defendant. If the suit was 

not dismissed by December 31, 2003 or if there is a final 

judgment in the suit, the claimant is not entitled to any 

Part B benefits. 

d. Lawsuits Filed Between October 30, 2000 and December 

28, 2001. For lawsuits in this category, the claimant will 

not be eligible to receive Part B benefits, if the claimant 

does not dismiss all claims in the suit that arose out of 

the same employment-related exposure to either beryllium or 

radiation that is the basis for the Part B claim by the 

later of April 30, 2003, or the date that is 30 months 

after the date the claimant either received a radiation 

dose reconstruction from National Institute for 

Occupational Safety and Health (NIOSH) or a diagnosis of 

either beryllium sensitivity or chronic beryllium disease 

(CBD), depending on the occupational illness being claimed. 

e. Lawsuits Filed after December 28, 2001. For lawsuits 

in this category, the claimant will not be eligible for 

Part B benefits if a judgment is entered against the 

claimant (that is, the claimant loses the lawsuit). If the 

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6. Election of Remedies, Part B. (Continued) 

judgment is entered for the claimant (the claimant wins the 

lawsuit), the claimant is eligible for Part B benefits. 

If judgment has not been entered against the claimant, the 

claimant will not be eligible to receive Part B benefits, 

if the claimant does not dismiss all claims in the suit 

that arose out of the same employment-related exposure to 

either beryllium or radiation that is the basis for the 

Part B claim by the later of April 30, 2003, or the date 

that is 30 months after the date the claimant either 

received a radiation dose reconstruction from NIOSH or a 

diagnosis of either beryllium sensitivity or CBD, depending 

on the occupational illness being claimed. 

7. Tort Offset, Parts B and/or E. If the lawsuit has not 

adversely affected the claimant’s eligibility under Part B due 

to election of remedies, an offset of the potential Part B 

and/or E award may still be needed. EEOICPA benefits are only 

offset if the basis for the lawsuit and the payable EEOICPA 

claim are due to injuries from exposure to the same toxic 

substance. For example, if the claimant filed a lawsuit for lung 

cancer based on exposure to asbestos and the Part E claim that 

is payable is also based on lung cancer due to exposure to 

asbestos, offset is required. As long as there is one exposure 

that would be compensable, offset is required even if the 

lawsuit or EEOICPA claim is based on several other different 

exposures. 

 

a. Exceptions: There are several exceptions to the offset 

requirement. 

 

(1) If the lawsuit alleges exposure that is clearly 

outside the time frame and/or location of exposure 

awarded under EEOICPA or if the lawsuit and EEOICPA 

claim are based on exposure to two different toxic 

substances, offset is not required. For example, if 

the EEOICPA claim is based on radiation exposure from 

1952 to 1962 but the lawsuit is based on radiation 

exposure beginning in 1965, offset is not required. 

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7. Tort Offset, Parts B and/or E. 

(2) If the lawsuit alleges non employment exposures, 

offset is not required (nor is there an election of 

remedies requirement). For example, if a claimant 

alleges in a lawsuit that he was exposed to radiation 

because he lived in proximity to a facility that 

produced radiation, not because he was exposed to 

radiation while working in a covered facility, offset 

is not required. 

(3) If an employee and his or her spouse were both 

plaintiffs with causes of action in a lawsuit they 

brought together and they both signed releases to 

settle their case, but only the spouse received tort 

payment and the employee was alive at that time, no 

offset is required. 

8. Pending Tort Settlement Payment. The requirement to offset 

EEOICPA benefits does not apply if the claimant has not received 

any payments from a lawsuit at the time of the EEOICPA payment. 

The CE does not defer issuing the Recommended Decision (RD) or 

the Final Decision (FD). The RD or the FD is issued without 

offset since the claimant has not yet received tort payment. 

 

However, if the claimant receives tort payment that requires 

EEOICPA benefits to be offset, at any time after issuing the RD 

or FD, but before the issuance of EEOICPA payment, the EEOICPA 

payment cannot be issued until the following actions are taken. 

a. Tort Payment Pending at the District Office (DO). If 

the tort payment is pending at the time of the RD, the CE 

issues the RD without an offset. However, the CE states in 

the RD’s cover letter that if the claimant receives tort 

payment after the issuance of the RD, but before issuance 

of the FD, the claim will be remanded by the Final 

Adjudication Branch (FAB) for offset and a new RD. 

b. Tort Payment Pending at the FAB. If the tort payment 

is pending at the time of the FD, the FAB Hearing 

Representative (HR) issues the FD without an offset. 

However, the HR states in the FD’s cover letter that if the 

claimant receives tort payment after the issuance of the 

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8. Pending Tort Settlement Payment. (Continued) 

FD, but before issuance of the EEOICPA payment, the FD 

authorizing the payment will be vacated. 

c. Tort Payment Pending at the time of EEOICPA Payment. 

Before issuing EEOICPA payment, the CE calls the claimant 

to verify that tort payment is still pending. If the 

claimant receives tort payment after issuance of the FD, 

but before issuance of the EEOICPA payment, the DO forwards 

the claim to the National Office for a reopening. 

9. Required Tort Offset. After receipt of all relevant 

documents, the CE determines whether an offset is needed. If so, 

the CE completes the “EEOICPA Part B/E Benefits Offset 

Worksheet” (Exhibit 1). 

The Worksheet includes detailed instructions for computing the 

amounts that the CE uses to calculate the amount of any offset. 

After completing the Worksheet, the CE staples it to the inside 

left cover of the case file jacket. 

 a. Complaint. While the complaint must be obtained if the 

claimant disputes the necessity of the offset, the CE may 

proceed with the offset without the complaint if the 

claimant does not dispute that offset is necessary, and the 

CE has sufficient evidence to fill out the EEOICPA Part B/E 

Benefits Offset Worksheet. This step occurs after 

confirming that the election of remedies does not apply. 

b. EEOICPA Benefits Greater than Offset. If the amount 

of EEOICPA benefits to which the claimant is currently 

entitled is more than the offset, the balance due the 

claimant will be the amount appearing on Line 7b of the 

Worksheet. This is the amount of EEOICPA benefits that 

must be referenced in the recommended decision (RD), along 

with an explanation of how this amount was calculated.

c. EEOICPA Benefits Less than Offset. If the amount of 

EEOICPA benefits currently payable is less than the offset, 

the amount of the “surplus” payment still to be offset will 

appear on Line 7c of the Worksheet. All future EEOICPA 

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Election of Remedies 

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9. Required Tort Offset. (Continued) 

benefit payments for the same exposure(s) that formed the 

basis for the lawsuit are subject to the offset to absorb a 

surplus. Since additional EEOICPA benefits must first 

become payable before a surplus payment can be absorbed, no 

further action to offset the surplus payment is required 

for a survivor’s Part B claim. 

(1) If a surplus payment is to be absorbed in an 

employee’s Part B claim, this must be noted in the RD, 

along with an explanation that DEEOIC will not pay 

medical benefits until the surplus is absorbed. 

(2) If a surplus is to be absorbed in an employee’s 

Part E claim, this same explanation must appear in the 

RD, plus an explanation that DEEOIC will also not pay 

any benefits for wage loss and/or impairment that may 

be due in the future until the surplus is absorbed. 

(3) If a surplus is to be absorbed in a survivor’s 

Part E claim and further monetary benefits may be 

payable based on the deceased employee’s calendar 

years of qualifying wage loss, this must be noted in 

the RD, along with an explanation that DEEOIC will 

absorb the remaining surplus out of those benefits if 

and when they become payable. 

e. FAB Award Letter. In situations involving a surplus, 

the FAB issues an award letter which accompanies the final 

decision and advises the claimant of the exact amount of 

the surplus. In the award letter, the FAB representative 

explains that the surplus will be absorbed out of medical 

benefits payable under EEOICPA (and lump-sum payments due 

in the future under Part E). The FAB representative 

instructs the claimant to submit proof of payment of 

medical bills to the District Office (DO) until notice is 

received that the surplus has been absorbed, and to advise 

medical providers to submit proof of payment of medical 

bills to the DO during this time.

 

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9. Required Tort Offset. (Continued) 

f. ECMS Coding. Upon issuance of the final decision that 

concludes with a surplus, the FAB reviewer updates ECMS in 

the condition status field with the “O” (Offset) code for 

the affected medical condition(s) on the medical condition 

screen for the employee’s claim. The offset only applies to 

the employee’s claim, even in the event that the employee 

died prior to adjudication of the case, and the survivor is 

entitled to compensation. The “O” code is entered only for 

the medical condition(s) that derived from the same 

exposure(s) that formed the basis for the tort claim. 

During the time in which the “O” code remains in the 

medical condition status screen, the bill processing agent 

(BPA) denies medical bills related to the medical condition 

coded as “O” and generates explanations of benefits that 

the bills are not payable due to a surplus. Once the 

surplus is absorbed, the CE replaces the “O” code with “A” 

(Accepted) code. 

10. Actions to Absorb Surplus. Each District Director appoints 

a qualified individual to serve as the point of contact (POC) to 

monitor surplus situations for both tort settlements and state 

workers’ compensation (SWC) benefits. Tort settlement and SWC 

benefit surpluses are absorbed until the surplus is exhausted 

and EEOICPA benefit disbursement can commence. The POC 

tabulates the amounts of proofs of payment, using the DEEOIC 

Offset Tracking Database, until they equal or exceed the surplus 

amount. 

a. While the surplus is being absorbed, the POC 

temporarily places the affected case file in a red jacket 

denoting that a surplus exists. All case file contents are 

maintained in the red jacket throughout the process of 

surplus depletion. 

b. No further payments related to the same toxic 

exposure(s) that formed the basis for the lawsuit are made 

on any case file contained in a red jacket until such time 

the offset has been absorbed. Should an unpaid bill be 

submitted to the POC during the surplus period, it must be 

forwarded to the BPA so an explanation of benefits can be 

generated. 

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10. Actions to Absorb Surplus. (Continued) 

c. During the time in which the surplus is being 

monitored for depletion, the POC continually tracks the 

offset using the DEEOIC Offset Tracking Database, which is 

accessible through the shared drive. Upon payment of 

impairment benefits, wage loss compensation, or proof of 

payment of medical bills, the POC enters the dollar amount 

being applied toward the offset into the appropriate field 

in the DEEOIC Offset Tracking Database, until such time the 

surplus has been absorbed. 

d. While medical benefits are not being paid because of a 

surplus that is being absorbed, the CE may find it 

necessary to obtain a second opinion examination, a referee 

examination, or a medical file review. If so, DEEOIC pays 

the costs for these directed examinations or reviews and 

reimburses any reasonable expenses incurred by the 

employee, including medical travel expenses, without adding 

to the surplus. Therefore, offset does not apply to any 

prior approval medical conditions in ECMS, coded with a 

medical condition type of “PA.” In such situations, the CE 

enters a comment into ECMS case notes authorizing the BPA 

to pay all bills related to the directed medical 

examination or medical file review. 

 

In a case with a surplus, BPA creates a thread for all 

medical travel refund requests to the POC requesting 

authority to deny or proceed with payment. Medical travel 

expenses related to a directed medical examination must be 

approved for payment and are not subject to offset. 

e. Once the surplus is completely absorbed and EEOICPA 

benefits may commence, the POC removes the temporary red 

file jacket and returns the case contents to the original 

file jacket. Removal of the red file jacket signifies that 

future benefit payments may be made on the case. Once the 

surplus is absorbed, the CE also replaces the “O” in the 

condition status field in ECMS with “A” (Accepted) code. 

However, cases are not to be deleted from the DEEOIC Offset 

Tracking Database once the offset has been absorbed. 

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10. Actions to Absorb Surplus. (Continued) 

f. The POC sends a letter to the claimant that the 

surplus is absorbed. The letter provides the claimant with 

the address of the BPA and instructs him or her to submit 

all future unpaid medical bills to that address for 

processing. To avoid duplicate payment of medical bills 

that were applied toward the offset, BPA creates threads 

for all submitted medical bills with service dates prior to 

the date that condition status “O” was changed to “A” in 

ECMS. The CE reviews the threads and advises BPA if the 

medical bills can be paid by checking the DEEOIC Offset 

Tracking Database to determine if the medical bills were 

applied toward the offset. 

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EEOICPA PART B/E BENEFITS OFFSET WORKSHEET

(For internal DEEOIC use only) 

Employee:

Claimant:

Claim Number:

1. Gross Settlement/Final Judgment Amount.........$___________

 a. Amount of Line 1 that is for damages to

 real/personal property (if any)...........$___________ 

 b. Amount of Line 1 that is for medical

 treatment before filing date (if any).....$___________

 c. Subtract Lines 1a and 1b from amount on

 Line 1 and enter balance here.............$___________

2. Were the amounts entered at Step 1 only paid to or on 

behalf of one party (see Instructions, Step 2 )?..........Y / N

 a. If no, go to either Step 3 or Step 4

 b. If yes, go to Step 5

3. Allocation Between Parties Provided by Judge or Jury:

 a. Amount of Line 1c awarded to employee

for injuries due to covered exposure to 

toxic substance...............................$____________

 b. Amount of Line 1c awarded to other

party(s). Go to Step 5.......................$____________

4. CE Allocation Between Parties (all other cases):

 a. Standard allocation for living employee

is 75% of Line 1c. Enter result here and

go to Step 4c.................................$____________

 

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b. Standard allocation for deceased employee

is 50% of Line 1c. Enter result here and

go to Step 4c.................................$____________

 c. Good cause shown for different allocation?.......Y / N

d. If yes, allocation for living/deceased

employee is ____% of Line 1c. Enter dollar

amount here...................................$____________

5. Allowable Deductions From Payment:

 a. Costs of Suit (see Instruction Step 5)...$____________

 Divide costs by gross payment to determine

 costs percentage (Line 5a/Line 1)..............._____%

 b. Multiply Line 1c, 3a, 4a, 4b or 4d (one only)

 by the costs percentage. Enter here....$_____________

 c. Attorney Fees...........................$_____________

 Divide attorney fees by gross payment to determine

 attorney fees percentage (Line 5c/Line 1)......._____%

 d. Multiply Line 1c, 3a, 4a, 4b or 4d (one only)

 by the LESSER of attorney fees percentage

 or 40%. Enter here.....................$____________

e. Enter amount of Line 1 that was paid to

 satisfy workers’ compensation lien of a

 state authority or insurer (if any).....$____________

6. Net Amount of Payment to be used for Offset:

 a. Subtract Line 5b from Line 1c, 3a, 4a, 4b

or 4d, as appropriate. Enter balance 

here.........................................$____________

 b. Subtract Line 5d from Line 6a. Enter

 balance here.................................$____________

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 c. Subtract amount on Line 5e (if any) from

Line 6b to arrive at amount of offset and

enter result here............................$_____________

7. Offset of Part B/E Benefits, Surplus Payment:

a. Amount of unpaid lump-sum payment.......$_____________

 b. If Line 7a is larger than Line 6c, subtract

Line 6c from Line 7a and enter balance due

claimant here................................$_____________

 c. If Line 7a is smaller than Line 6c, subtract

 Line 7a from Line 6c and enter amount of surplus

 to be recovered from future lump-sum payments

and/or medical benefits here............$__________________

* * * * * * * * * * *

INSTRUCTIONS FOR COMPLETING THE WORKSHEET

READ BEFORE THE WORKSHEET IS COMPLETED: Lump-sum payments 

and/or medical benefits to be awarded for an accepted condition 

are only “offset” or reduced to reflect the amount of any 

settlement or final judgment payment for injuries due to 

exposure to the same toxic substance for which EEOICPA payments 

are payable. If the payment was for injuries due solely to 

exposure to some other toxic substance, no offset of EEOICPA 

benefits is required. For example, a Part B award for lung 

cancer due to exposure to radiation is NOT offset to reflect a 

settlement or final judgment payment in a suit that only alleges 

exposure to asbestos fibers. Also, if the tort complaint 

alleges exposure that is clearly outside the time frame and/or 

location of exposure awarded under EEOICPA, offset is not 

required. As long as there is one exposure that would be 

compensable, offset is required even if the tort suit or EEOICPA 

claim has several other different exposures. In order to 

determine whether offset will be necessary, the CE must examine 

the complaint to see what alleged exposure is identified as 

causing the alleged injuries.

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The CE does not have to fill out the Worksheet if the employee 

or his/her survivor(s) has had their workers’ compensation 

benefits, or a RECA section 4 or 5 award, or a prior award of 

EEOICPA Part B/E benefits offset to reflect the full amount of a 

settlement or final judgment payment. However, if the reduction 

of those prior benefits was not enough to fully offset the 

payment, leaving a surplus payment still requiring an offset, 

enter the dollar amount of the surplus payment on Line 6c and 

complete the remainder of the Worksheet. The CE does not have 

to complete the entire Worksheet if he or she is only offsetting 

a claimant’s current Part B/E lump-sum award or future medical 

benefits to reflect a surplus payment.

Step 1 – Putting a Value on a Settlement or Final Judgment.

Settlements or final judgments can include both an initial cash 

payment and future payments. The “value” of future payments is 

their present value, not the sum of the future payments (which 

will always be more than the present value of the future 

payments). If the future payments are made through an annuity, 

the CE may accept the purchase price of the annuity as the 

present value of the future payments. Do not attempt to put a 

value on a future payment that is contingent upon an event that 

has not yet taken place, such as the diagnosis of another 

medical condition. This particular type of future payment 

cannot be valued and is not to be included in the amount listed 

on Line 1 of the Worksheet. However, if the event in question 

has occurred by the time a later award under Part E becomes 

payable, any payment for that event must be added to the amount 

entered on Line 1, and the Worksheet must be completed 

again. Any payment for the aggravation, by medical malpractice, 

of illnesses caused by the same exposure for which EEOICPA 

benefits are payable is an amount that must be reported to OWCP 

and included in the amount listed on Line 1. 

In some rare cases, a complaint alleging injuries due to 

exposure to a toxic substance may contain causes of action for 

unrelated damages to either personal property or real property 

of the plaintiff(s). If this occurs, and the payment listed on 

Line 1 includes an amount for damages to personal or real 

property, enter this amount on Line 1a. If there is a question 

about whether or not the complaint contains a cause of action of 

this sort, contact the National Office.

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Since EEOICPA benefits are not offset to reflect the amount of 

any payment for medical treatment provided BEFORE the date an 

employee files a claim, enter the amount of the payment listed 

on Line 1 that is explicitly designated as being for this 

medical treatment on Line 1b, even if the payment was made 

directly to the provider. Also, if a malpractice payment is 

included in the amount on Line 1, and it only constitutes a 

reimbursement for medical treatment provided before the employee 

filed a claim, include the malpractice payment in the amount 

listed on Line 1b and complete the remainder of the Worksheet. 

If a malpractice payment constitutes anything other than a 

reimbursement for medical treatment provided to the employee 

before he/she filed a claim for EEOICPA benefits, do not 

complete the Worksheet and refer the case to the National 

Office.

Some law suits, such as those related to exposure to asbestos, 

may involve multiple defendants making multiple payments over 

time. EEOICPA benefits currently payable will be reduced to 

reflect the total of only those settlement or final judgment 

payments received. Payments received at a later date may be 

offset from any future EEOICPA award of lump-sum benefits or 

payment of medical benefits, at which time another Worksheet 

must be completed, listing on Line 1 the total of the payments 

received since the completion of the prior Worksheet (also add 

any prior unabsorbed surplus from any earlier offset of benefits 

to the amount in Line 6c).

Step 2 – Single Recoveries vs. Joint Recoveries.

A payment on a final judgment or settlement is a joint recovery 

only if it was paid to multiple parties. Joint recoveries are 

“allocated” or split up between multiple parties at either Step 

3 or 4 of the Worksheet. If only one party received the amounts 

on Lines 1a, 1b and 1c of the Worksheet, AND THAT PARTY WAS THE 

EMPLOYEE OR ANOTHER PERSON WITHOUT THEIR OWN CAUSE OF ACTION IN 

THE COMPLAINT, fill in the remainder of the Worksheet. It is 

rare that a payment will be made to a person who does not have 

their own cause of action in the complaint. However, if an 

unmarried employee files suit and then dies, a court may appoint 

another person to take charge of the suit. While this person 

will not have their own cause of action, he will be the proxy 

for the deceased employee.

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If someone other than these two specific parties received the 

entire payment, and the employee was alive at the time it was 

paid, no offset is needed and the Worksheet does not need to be 

completed. For example, if an employee and his or her spouse 

were both plaintiffs with causes of action in a case they 

brought together and they both signed releases to settle their 

case, but only the spouse received a payment and the employee 

was alive at that time, no offset is required.

Step 3 – Judge/Jury Allocation of Joint Recoveries.

If a judge or jury specifies how to allocate a joint recovery 

between multiple parties, the CE MUST use that allocation to 

fill in the blanks in Step 3, as appropriate. In these 

situations, the CE must obtain a copy of either the judge’s 

order or the jury’s verdict making the allocation.

Step 4 – All Other Allocations for Living/Deceased Employees.

In all other situations involving a joint recovery, the CE will 

automatically allocate 75% of the amount on Line 1c to the 

employee and the remaining 25% to the other parties to the 

litigation if the employee was alive at the time the payment was 

made, then enters this amount on Line 4a of the Worksheet. If 

the employee died before a payment was made, the CE 

automatically allocates 50% of the amount on Line 1c for the 

employee’s occupational illness/covered illness, and enters this 

amount on Line 4b.

If the claimant wants to allocate less than the standard 

percentages to the recovery of the employee (which will reduce 

the amount by which the EEOICPA award must be offset), the 

claimant must submit evidence and legal argument to the CE that 

shows that a lower percentage is appropriate. This evidence 

MUST show that:

A. State law in the relevant state provides a cause of action 

for loss of consortium (tort claim based on deprivation of a 

spousal or parental relationship due to injuries) or wrongful 

death for the family member to whom the recovery is attributed, 

and

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B. A cause of action for loss of consortium or wrongful death 

was actually asserted by that family member, either in the same 

action or in separate actions.

To make these required showings, the claimant must submit a copy 

of the complaint filed on behalf of the spouse and/or children, 

and citations to appropriate state case law or statutes. If the 

CE determines that the evidence as noted above support 

allocating a lower percentage to the employee, the CE circles 

“Y” at Line 4c and enters the lower percentage for the employee 

in the appropriate blank in Line 4d. Using this percentage, the 

CE calculates the new allocation for the employee and enters 

this amount on Line 4d. Any situations where this matter is 

unclear should be referred to the National Office for guidance.

In the event there are multiple payments over time constituting 

joint recoveries by an employee and other plaintiffs, and the 

employee dies after receiving at least one payment (but before 

all of the payments are made), the CE calculates the amount of 

the offset of an EEOICPA award by using two Worksheets. Using 

two Worksheets enables the CE to allocate the appropriate 

percentage of the joint recoveries to the employee. The CE 

completes one Worksheet for payments received prior to the 

employee’s death (entering that amount on Line 1), and another 

Worksheet for payments received after the employee’s death. 

Step 5 – Allowable Deductions from a Payment.

Costs that may be listed on Line 5a of the Worksheet are 

reasonable out-of-pocket costs and expenses involved in bringing 

a lawsuit, but do not include fees paid to co-counsel or normal 

office expenses like secretary or paralegal services or in-house 

record copying costs. Before the CE may approve the deduction 

of any costs, the costs MUST be itemized so the CE may evaluate 

the nature of each individual cost to ensure that it is 

allowable. Costs that are allowable could include filing fees, 

travel expenses, record copy services, witness fees, court 

reporter costs for transcripts of hearings and depositions, 

postage, and long distance telephone calls. Once the allowable 

costs have been identified and the sum of those costs are listed 

on Line 5a, the CE must divide these costs by the amount of the 

gross payment listed on Line 1 of the Worksheet to determine the 

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percentage of the payment that is represented by the allowable 

costs, rounded up to the next highest tenth. For example, 

26.121% is rounded up to 26.2%. Once this rounded percentage is 

calculated, the CE must multiply it by the amount listed on Line 

1c (if the only party paid was the employee or another person 

without their own cause of action), or the amount listed on Line 

3a, 4a, 4b or 4d (if multiple parties were paid) to calculate 

the amount of costs to deduct. The CE then enters the result on 

Line 5b.

Attorney fees submitted for consideration should be entered on 

Line 5c of the Worksheet. Using the same basic calculation 

method used for costs, the CE should divide Line 5c by Line 1 to 

determine the percentage of the gross payment that is 

represented by the attorney fees, rounded up to the next highest 

tenth. For example, 26.121% is rounded up to 26.2%. Enter the 

rounded percentage in the space provided after Line 5c. In 

general, any fee that exceeds 40% will be considered 

unreasonable. To determine the amount of allowable attorney 

fees to be deducted, the CE must multiply the amount listed on 

Line 1c (if the only party paid was the employee or another 

person without their own cause of action), or the amount listed 

on Line 3a, 4a, 4b or 4d (if multiple parties were paid), by the 

LOWER of the attorney fees percentage that was entered in the 

space after Line 5c or 40%, and enter the result on Line 5d. If 

the attorney fee percentage exceeds 40%, the CE should inform 

the claimant and allow an opportunity to establish that an 

attorney fee in excess of 40% is reasonable.

The circumstances which should be taken into account in 

determining the reasonableness of both attorney fees and costs 

of suit include prevailing local fees, cases of similar 

complexity and the amount of the gross settlement or final 

judgment at issue. CE determinations in these areas are made 

for the sole purpose of administering § 7385 of EEOICPA and do 

not have any effect on a fee agreement between an attorney and 

client or any other matter not involving the application of the 

Act.

Sometimes after an attorney receives a settlement or final 

judgment payment, but before the attorney distributes that 

payment to his or her clients, the attorney has to pay out a 

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portion of the payment to satisfy the lien of a state workers’ 

compensation system or an insurer for amounts paid by the system 

or insurer for the employee’s medical condition. When this has 

occurred, the CE enters the amount of the payment that was made 

to satisfy the lien on Line 5e of the Worksheet.

Step 6 – Calculating the Amount of the Offset.

To calculate the amount by which EEOICPA benefits must be 

offset, the CE subtracts Line 5b from Line 1c, 3a, 4a, 4b or 4d, 

as appropriate, and enters the result on Line 6a. The CE then 

subtracts Line 5d from Line 6a, and enters the result on Line 

6b. Finally, the CE subtracts the amount on Line 5e (if any) 

from Line 6b, and enters the result on Line 6c. This last 

amount is the amount by which the claimant’s Part B or E award 

must be offset.

Step 7 – Amount of Part B/E Benefits Due or Surplus Payment.

At Step 7 of the Worksheet, the CE determines either the net 

amount of EEOICPA benefits due the claimant, or the amount of 

the surplus payment remaining that must still be absorbed from 

either future Part E lump-sum payments, or future medical 

benefits under either Part B or Part E.

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