Program United States

Letter Railroad Retirement Board

____________________________________________________________________________

Office of Programs Chicago, IL 60611-2092

Quality Reporting Service Center (312) 751-4992

______________________________________________________________________________

CONTACT: Edward Roberts No. 2013-01

PHONE: (312) 751-4646 Date: October 26, 2012

Email: Edward.roberts@rrb.gov

TO: Certification Contact Officials 

SUBJECT: Employer Responsibilities Under Section 12(o) of the

 Railroad Unemployment Insurance Act (RUIA)

___________________________________________________________________________

This program letter supplements program letter 2007-02 from November 2006. It explains that 

the Railroad Retirement Board (RRB) will no longer reduce its lien for medical and hospital 

expenses where the employer and rail labor have agreed that medical expenses paid by the 

employer shall not be recovered in an action under the FELA. The National Carriers’

Conference Committee has informed the RRB which employers are parties to the 1975 

Agreement providing for such arrangement. For other employers, this program letter explains 

how they may provide the RRB information about such insurance voluntarily. Copies of this 

program letter should be provided to all claims department, labor relations and payroll 

department personnel involved in the processing and payment of personal injury 

settlements. Printable versions of these program letters are available at RRB.gov.

General Information – RUIA Section 12(o) 

Under section 12(o) of the RUIA, the RRB is entitled to reimbursement of benefits paid for

days of sickness resulting from any injury or infirmity for which the employee is paid a personal

injury settlement or damages. Section 12(o) of the RUIA reads as follows:

(o) Benefits payable to an employee with respect to days of sickness shall be payable regardless

of the liability of any person to pay damages for such infirmity. The Board shall be entitled to

reimbursement from any sum or damages paid or payable to such employee or other person

through suits, compromise, settlement, judgment, or otherwise on account of any liability (other

than a liability under a health, sickness, accident, or similar insurance policy) based upon such

infirmity, to the extent that it will have paid or will pay benefits for days of sickness resulting
from such infirmity. Upon notice to the person against whom such right or claim exists or is

asserted, the Board shall have a lien upon such right or claim, any judgment obtained

thereunder, and any sum or damages paid under such right or claim, to the extent of the amount

to which the Board is entitled by way of reimbursement.

RRB Notices Regarding Section 12(o)

A notice of lien (Form ID-30B) is mailed to an employer when an applicant for sickness benefits

indicates that he or she has filed or expects to file a claim against the employer for personal

injury. Form ID-30B is notice of the RRB's right to reimbursement of sickness benefits from any

sum or damages payable on account of liability for the employee's injury or illness.

Prior to payment of a personal injury settlement, railroad employers should contact the RRB's 

Sickness and Unemployment Benefits Section to obtain information about the amount of benefits 

to be deducted from the award for reimbursement to the RRB under section 12(o).

Amount of Reimbursement

The RRB's regulations specify the amount of reimbursement due the RRB under section 12(o) of 

the RUIA. 

Title 20, Section 341.5 of the Code of Federal Regulations states:

§ 341.5 Amount of reimbursement.

(a) The Board shall receive as reimbursement the lesser of:

(1) The amount of sickness benefits paid to the employee for the infirmity for which he or she 

recovers any sum or damages; or

(2) The net amount of the sum or damages paid to the employee for the infirmity, after 

subtracting the amount of the expenses listed in paragraph (b) of this section.

(b) The expenses that may be subtracted from the amount of damages recovered are:

(1) The medical and hospital expenses that the employee incurred because of his or her injury. 

These expenses are deductible even if they are paid under an insurance policy covering the 

employee or are covered by his or her membership in a medical or hospital plan or association. 

But such expenses are not deductible if they are not covered by insurance or by membership in a 

medical or hospital plan or association and are consequently paid by a railroad or other person 

directly to the doctor, clinic or hospital that provided the medical care or services.

(2) The cost of litigation. This includes both the amount of the fee to which the attorney and the 

employee have agreed and the other expenses that the employee incurred in the conduct of the 

litigation itself.
Medical and Hospital Expenses Covered by FELA Liability Insurance

In Legal Opinion L-2011-06, issued July 2011, the General Counsel reviewed the provisions of 

the Health and Welfare Agreement that was entered into by railroad management represented by 

the National Carriers’ Conference Committee and railroad labor represented by the Brotherhood 

of Maintenance of Way Employees on October 22, 1975. Under Article III, Section A of the 

1975 Agreement, the parties specify that employee medical expenses are paid to the providers 

directly by the insurance company United Healthcare and will be offset against any right of 

recovery. The General Counsel concluded that in calculating the net amount of the sum or 

damages paid to an employee for an infirmity, medical and hospital expenses incurred as a result 

of an on-the-job injury are not deductible from the damages if the medical and hospital expenses 

are paid on the employee’s behalf pursuant to the 1975 Health and Welfare Agreement.

Based on the General Counsel’s advice in Legal Opinion L-2011-06, for purposes of calculating 

the amount of sum or damages subject to the lien under RUIA section 12(o), if the sum or 

damages under the FELA is assessed against an employer which is subject to the 1975 

Agreement, then the RRB will no longer reduce the sum or damages by the medical and hospital 

expenses of the employee which are paid pursuant to the 1975 Agreement.

Request for Information 

The 1975 Health and Welfare Agreement covers over 100 employers. The National Carriers’

Conference Committee will keep the RRB advised of the parties to the agreement, so those 

employers do not need to contact the RRB about this policy change unless they have questions.

Employers who are not a party to the 1975 agreement, however, may wish to provide the RRB

information if they have FELA insurance and have agreed with labor to offset expenses. These 

plans pay employee medical and hospital expenses directly to the providers as part of a FELA 

liability insurance plan rather than as insurance provided as a fringe benefit portion of an 

employees’ compensation paid by an employer. The RRB will review the information to 

determine whether medical and hospital insurance payments under the plan are similar to those 

of the 1975 Health and Welfare Agreement. If this information is not submitted, the RRB will

deduct medical expenses pursuant to Title 20, Section 341.5 of the Code of Federal Regulations 

when determining the net amount of reimbursement due to the RRB.

Employers who are not parties may, if they wish, provide us with:

• The name and effective date of each such employer indemnity plan or agreement, 

• The name of the insurance company that administers the plan and pays the medical and

 hospital expenses, 

• The craft(s) of the employees covered by the plan

• Confirmation that the parties agreed to the offset of expenses
The voluntary information may be provided by letter to Policy and Systems, Office of 

Programs, U. S. Railroad Retirement Board, Chicago, Illinois 60611. As you create, revise or 

terminate plans, be sure to send us notice. Please direct any notice and questions to Policy and 

Systems at the contact number and email address above.