Source: https://www.everycrsreport.com/reports/R41506.html
Timestamp: 2019-04-25 18:39:14+00:00

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The Longshore and Harbor Workers’ Compensation Act (LHWCA) is a federal workers’ compensation program that covers certain private-sector maritime workers. Firms that employ these workers are required to purchase workers’ compensation or self-insure and are responsible for providing medical and disability benefits to covered workers who are injured or become ill on the job and survivors benefits to the families of covered workers who die on the job. The LHWCA is administered by the Department of Labor (DOL), and all benefit costs are paid by employers and their insurance carriers. In 2016, more than $1.4 billion in LHWCA benefits were paid to beneficiaries.
Congress has extended the LHWCA provisions to cover workers outside of the maritime industry, such as overseas government contractors and civilian employees of military post exchanges. As part of the American Recovery and Reinvestment Act of 2009 (ARRA), persons who repair recreational vessels of any size were added to the LHWCA exemption list. In 2011, the DOL implemented this provision; since then, those regulations have proven controversial and numerous bills have been introduced to modify the regulatory definition to increase the number of workers exempted from the LHWCA.
The LHWCA pays for all medical care associated with a covered injury or illness. Disability benefits are based on a worker’s pre-injury wage, and, unlike comparable state workers’ compensation benefits, are adjusted annually to reflect national wage growth.
The Longshore and Harbor Workers' Compensation Act (LHWCA) is a federal workers' compensation program that covers certain private-sector maritime workers. Firms that employ these workers are required to purchase workers' compensation or self-insure and are responsible for providing medical and disability benefits to covered workers who are injured or become ill on the job and survivors benefits to the families of covered workers who die on the job. The LHWCA is administered by the Department of Labor (DOL), and all benefit costs are paid by employers and their insurance carriers. In 2016, more than $1.4 billion in LHWCA benefits were paid to beneficiaries.
The LHWCA pays for all medical care associated with a covered injury or illness. Disability benefits are based on a worker's pre-injury wage, and, unlike comparable state workers' compensation benefits, are adjusted annually to reflect national wage growth.
The Longshore and Harbor Workers' Compensation Act (LHWCA) requires that private-sector firms provide workers' compensation coverage for their employees engaged in longshore, harbor, or other maritime occupations on or adjacent to the navigable waters of the United States.1 Although the LHWCA program is administered by the Department of Labor (DOL), most benefits are paid either through private insurers or self-insured firms.
Nearly all private- and public-sector workers in the United States are covered by some form of workers' compensation. The federal government has a limited role in workers' compensation and administers workers' compensation programs only for federal employees and several classes of private-sector workers, including longshore and harbor workers.3 For most occupations, workers' compensation is mandated by state laws and administered by state agencies.
There is no federal mandate that states provide workers' compensation. However, every state and the District of Columbia has a workers' compensation system. There are no federal standards for state workers' compensation systems. However, all U.S. workers' compensation systems provide for limited wage replacement and full medical benefits for workers who are injured or become ill as a result of their work and survivors benefits to the families of workers who die on the job.
Workers' compensation in the United States is a no-fault system that pays workers for employment-related injuries or illnesses without considering the culpability of any one party. In exchange for this no-fault protection and the guarantee of benefits in the event of an employment-related injury, illness, or death, workers give up their rights to bring actions against employers in the civil court system and give up their rights to seek damages for injuries and illnesses, including pain and suffering, outside of those provided by the workers' compensation laws.4 Workers' compensation is mandatory in all states and the District of Columbia, with the exception of Texas. In Texas, employers may, under certain conditions, opt out of the workers' compensation system, but in doing so subject themselves to civil actions brought by injured employees.
The LHWCA provisions apply to any private firm with any covered employees who work, full- or part-time, on the navigable waters of the United States, including in any of the following adjoining areas: piers; wharves; dry docks; terminals; building ways; marine railways; or other areas customarily used in the loading, unloading, repairing, or building of vessels.
With the exception of workers excluded by statute (listed below), the LHWCA covers any maritime employee of a covered firm, including longshore workers (those who load and unload ships) and harbor workers (i.e., ship repairmen, ship builders, and ship breakers).
employees of the federal government, or any state, local, or foreign government or any subdivision of such a government.
(F) individuals employed to build, repair, or dismantle any recreational vessel under sixty-five feet in length.
By granting an exemption from the LHWCA to persons engaged in the repair of any recreation vessel, regardless of its size, this amendment limits the scope of the LHWCA and increases the types of workers excluded from coverage.
In 2011, the DOL promulgated implementing regulations for the new recreational vessel provision provided by Section 803 of ARRA.13 These regulations provided definitions of recreational vessel for the purposes of the determination of LHWCA coverage. These definitions are based on the classification of vessels used by the U.S. Coast Guard (USCG) and provided in statute and regulation.
In addition, for a vessel being built or repaired under warranty by its manufacturer or builder, the vessel is considered a recreational vessel if it appears based on its design and construction to be intended for recreational uses.15 The manufacturer or builder bears the burden under this regulation to establish that the vessel is a recreational vessel.
Since the promulgation of the DOL's 2011 rules providing regulatory definitions of recreational vessels for the purposes of the LHWCA, numerous bills have been introduced that would, if enacted, remove the existing regulatory definitions for a vessel being repaired, dismantled for repair, or dismantled at the end of its life so that the USCG categories of vessels provided in Section 2101 of Title 46 of the United States Code would no longer be used in the classification of such a vessel under the LHWCA.18 This legislation would expand the types of recreational vessels. Because persons who work on recreational vessels are not covered by the LHWCA, the legislation would allow employers to purchase workers' compensation for these workers under state laws rather than the LHWCA, which, due to the more generous benefits frequently offered by the LHWCA and the limited number of providers, may be more expensive.
The LHWCA has been amended four times to extend coverage to occupations outside the original scope of the law. In 1928, coverage was extended to employees of the District of Columbia.20 The provision was repealed, effective for all injuries occurring on or after July 26, 1982, with the enactment by the District of Columbia government of the District of Columbia Workers' Compensation Act of 1982.21 Benefits for injuries that occurred prior to July 26, 1982, continue to be paid under the LHWCA.
Employers required by the LHWCA to provide workers' compensation coverage to their employees may either purchase private insurance or self-insure. The DOL is responsible for authorizing insurance carriers to provide coverage under the LHWCA program and for authorizing companies to self-insure. However, the DOL does not set or regulate insurance premiums. These insurance arrangements are the primary means of providing LHWCA benefits to injured, sick, and deceased workers and their families. General revenue is not used to pay any LHWCA benefits.
The DOL operates the Special Fund to provide LHWCA benefits in cases in which the responsible employer or insurance carrier cannot pay or in which benefits must be paid for a second injury under Section 8(f) of the LHWCA.25 The Special Fund is financed through an annual assessment charged to employers and insurance carriers based on the previous year's claims, payments required when an employee dies without any survivors, disability payments due to an employee without survivors after his or her death, and penalties and fines assessed for noncompliance with LHWCA program rules.
The LHWCA provides medical benefits for covered injuries and illnesses and disability benefits to partially cover wages lost due to covered injuries or illnesses, and it provides survivors benefits to the families of workers who die on the job.
The LHWCA provides medical benefits to fully cover the cost of any medical treatment associated with a covered injury or illness. These medical benefits are provided without any deductibles, copayments, or costs paid by the injured worker. Prescription drugs and medical procedures are fully covered, as are costs associated with travelling to and from medical appointments. A covered worker may select his or her own treating physician, provided the physician has not been debarred from the LHWCA program for violating program rules.
Covered workers are entitled to vocational rehabilitation services provided under the LHWCA. Vocational rehabilitation services are designed to assist the covered worker in returning to employment. There is no cost to the covered worker for vocational rehabilitation and workers actively participating in a rehabilitation program are entitled to an additional benefit of $25 per week. All costs associated with vocational rehabilitation under the LHWCA are paid out of the Special Fund. Vocational rehabilitation services may be provided by public or private rehabilitation agencies.
Disability benefits under the LHWCA, like all workers' compensation benefits, are not subject to federal income taxes.28 Unlike most state workers' compensation benefits, however, LHWCA benefits are adjusted based on wage inflation rather than price inflation. Benefits are adjusted annually each October 1 to reflect the change in the NAWW from the previous year, up to a maximum increase of 5%.
The LHWCA provides benefits in cases of total disability. Under the LHWCA, a worker is considered totally disabled if he or she is unable to earn his or her pre-injury wage because of a covered injury or illness. In addition, a worker is also considered totally disabled if he or she loses both hands, arms, feet, legs, or eyes, or any two of these body systems, such as the loss of one arm and one leg. Total disability benefits under the LHWCA are equal to two-thirds of the covered worker's wage at the time of the injury or illness. Total disability benefits continue until the worker is no longer totally disabled or dies.
If a covered worker is able to partially return to work or return to work at a wage level less than his or her wage at the time of injury, then he or she is considered partially disabled. In cases of temporary partial disability, the LHWCA benefit is equal to two-thirds of the difference between the workers' pre-injury wage and his or her current earning capacity or actual earnings.
Section 8(c) of the LHWCA provides a schedule of benefits to be paid in cases of permanent partial disability (PPD), such as the loss of a limb.29 The benefit schedule provides the number of weeks of compensation, at two-thirds of the pre-injury wage, for each type of PPD. For example, the LHWCA schedule provides that a worker who loses an arm is entitled to 312 weeks of compensation. Benefits in cases not listed on the schedule are paid at two-thirds of the difference between the pre-injury wage and current earning capacity for the duration of the disability. Schedule benefits for PPD are paid regardless of the current work status or earnings capacity of the employee. Thus, an employee with a PPD can fully return to work and earn his or her wage in addition to the PPD compensation. A copy of the LHWCA PPD schedule can be found in the Appendix to this report.
A surviving spouse with no eligible children is entitled to one-half of the deceased worker's wage at the time of death under the LHWCA. A surviving spouse with one or more eligible children is entitled to two-thirds of the deceased worker's wage at the time of death. Once all children become ineligible for benefits because of their ages, the surviving spouse's benefit is reduced to the level of a spouse without any eligible children.
If an eligible spouse becomes ineligible for benefits because of death or remarriage, or if there is no surviving spouse, benefits are still paid to any surviving children. Under the LHWCA, a single surviving eligible child is entitled to one-half of the deceased worker's wage at the time of death, and two or more surviving children are eligible for a combined two-thirds of the wage at the time of death.
If a covered worker who is receiving scheduled PPD benefits dies of a cause unrelated to his or her illness or injury, then the balance of any remaining PPD benefits is paid to his or her survivors. If a covered worker who dies on the job leaves no survivors, his or her employer or the employer's insurance carrier is required to pay $5,000 into the Special Fund.
Although the responsibility for the payment of benefits under the LHWCA rests with the employer or the employer's insurance company, decisions on benefit eligibility and the amount of benefits are made by the DOL. Upon the report of an injury, illness, or death, the LHWCA claims process begins. If the employer or insurance carrier does not controvert the claim, then arrangements are made by the DOL for the claim to be paid.
If, however, the employer controverts any part of the claim, then the DOL sets up an informal conference, either in person or by phone, between the employer or insurance carrier and worker with the goal of resolving any disputes over the claim. If this informal conference fails to resolve all outstanding disputes, then a formal hearing before a DOL administrative law judge (ALJ) is scheduled. If the employer or insurance carrier or the worker is dissatisfied with the decision of the ALJ, then this decision may be appealed to the Benefits Review Board (BRB). The BRB is made up of five members appointed by the Secretary of Labor. Either party dissatisfied with the decision of the BRB may file a petition with the U.S. Court of Appeals for the circuit in which the injury occurred praying that the BRB's decision be set aside or modified.
If an employer or insurance carrier fails to pay compensation in accordance with a final decision on a claim, the covered worker or the DOL may request that the U.S. District Court order that payment be made.
Notes: The loss of use of a body system is paid the same as the complete loss of the system. Benefits for a partial loss of a system are paid for a percentage of the maximum duration equal to the percentage of loss.
P.L. 69-803; 33 U.S.C. §§901 et seq.
Christopher F. McLaren, Marjorie L. Baldwin, and Leslie I. Boden, Workers' Compensation: Benefits, Costs, and Coverage (2016 data), National Academy of Social Insurance, October 2018, p. 71, https://www.nasi.org/research/2018/report-workers%E2%80%99-compensation-benefits-costs-coverage-%E2%80%93-2016.
The federal government provides workers' compensation for federal employees under the Federal Employees' Compensation Act [5 U.S.C. §§8101 et seq.] and also provides limited workers' compensation programs that cover specific illnesses contracted by coal miners under the Black Lung Benefits Act [30 U.S.C. §§901 et seq.], and workers involved in the development and testing of atomic weapons under the Energy Employees Occupational Illness Compensation Program Act [42 U.S.C. §§7384] and Radiation Exposure Compensation Act [42 U.S.C. §2210 note].
Under Section 5(b) of the LHWCA [33 U.S.C. §905(b)], an injured person may bring a civil action under certain circumstances against the owner of a vessel that was the cause of his or her injury.
Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917). In its decision, the Court cited Art. 3 §2 of the Constitution, which extends the judicial authority of the United States to admiralty and maritime matters and Art. 1 §8 of the Constitution, which grants Congress the power to make all laws necessary and proper to execute the powers of the federal government as the basis for its decision.
Longshoreman's and Harbor Workers Compensation Act Amendments of 1972, P.L. 92-576.
33 U.S.C. §§902(3) and 903(b).
This provision was amended by Section 803 of the American Recovery and Reinvestment Act of 2009 (ARRA), P.L. 111-5.
Masters and crew members of private vessels on the navigable waters of the United States are not covered by any workers' compensation laws. They can, however, bring civil actions against their employers under the Merchant Marine Act of 1920 [46 U.S.C. §§30104 et seq.], commonly referred to as the Jones Act. Civil service mariners working on government-owned ships, such as those of the Military Sealift Command, are federal employees and are covered by the Federal Employees' Compensation Act.
Department of Labor, "Regulations Implementing the Longshore and Harbor Workers' Compensation Act: Recreational Vessels," 76 Federal Register 82128, December 30, 2011.
20 C.F.R. §701.501(b)(3). In a bareboat the charter, the vessel, but not the crew, is chartered.
See for example H.R. 2354 in the 115th Congress.
District of Columbia Workmen's Compensation Act of 1928, P.L. 70-419.
D.C. Code §§36-501 et seq.
Nonappropriated Fund Instrumentalities Act, P.L. 82-397.
Outer Continental Shelf Lands Act, P.L. 83-212.
33 U.S.C. §908(f). A second injury is covered by Section 8(f) if an employee who was previously partially disabled on the job incurs a subsequent injury that renders him or her totally disabled. The use of special funds for second injuries is designed to lessen the risks associated with hiring partially disabled employees who may become totally disabled from injuries that would not normally totally disable other employees. Recently, states have been closing their second injury funds, in part because of the employment discrimination protections provided by the Americans with Disabilities Act [42 U.S.C. §§12101 et seq.] and difficulties in administering and financing the funds. For additional information on second injury funds, see Robert K. Briscoe and Robert J. Mayer, "The Rise and Fall of Second Injury Funds," Risk and Insurance, vol. 18, no. 11 (2007).
For additional information on the NAWW, see the website of the DOL at http://www.dol.gov/owcp/dlhwc/NAWWinfo.htm.
For additional information on the exclusion from federal income taxes of workers' compensation benefits, see U.S. Congress, Senate Committee on the Budget, Tax Expenditures: Compendium of Background Material on Individual Provisions, committee print, prepared by Congressional Research Service, 114th Cong., 2nd sess., December 2016, S. Prt. 114-31 (Washington: GPO, 2017), pp. 921-926.
For additional information on the AMA Guides, see Guides to the Evaluation of Permanent Impairment, ed. Robert D. Rondinelli, 6th ed. (Chicago: American Medical Association, 2008); and Steven Babitsky and James J. Mangraviti, Jr., Understanding the AMA Guides in Workers' Compensation, 4th ed. (Austin, TX: Aspen Publishers, 2008).
A surviving spouse is entitled to a lump-sum payment equal to two-years of benefits upon remarriage.

References: §2210
 §905
 v. 
 Art. 3
 §2
 Art. 1
 §8
 §701
 §908