Getting federal civil service disability payments can do miraculous things for your health. People too sick to work a desk job have suddenly found themselves able to ski, scuba dive and even run marathons once they started receiving payments from the Federal Employees Compensation Act. That's what Washington Examiner watchdog reporter Mark Flatten found in a recent three-part investigative series on FECA. The program is rife with fraud.
On Wednesday, the House Education and the Workforce Committee will convene a hearing on efforts to reform FECA. Fraud in FECA has flown under the radar in Congress for far too long. The FECA program costs taxpayers more than $3 billion annually. The Postal Service alone paid out $1.3 billion in FECA compensation last year. The exact amount of fraud isn't clear but the Labor Department's Inspector General has said its "investigations continue to identify high amounts of FECA compensation and medical fraud, which appears to surpass the department's improper payments estimates."
A major problem is that there is virtually no oversight of the program and little incentive for federal agencies to fight such fraud since FECA is run for them by DOL. It is not their responsibility, so why police it? That opens the door for federal employees to game the system. As Dave Williams, the Postal Service IG, told Flatten, there are no limits on how many compensation claims applicants can submit, so if one effort fails, they can just try again - even changing doctors and stories Ñ until they are successful.
Consider this: DOL approves about 85 percent of all FECA claims. That's more than twice the approval rate for Social Security disability benefits. There is no limit on how long they can receive the payments, either, and many stay on long after they would have retired in the normal course of things. More than 10,000 federal employees presently drawing disability for on-the-job injuries are at least 71 years old. At least six are over 100 years old. Why wouldn't they try to keep the tax-paid checks rolling in? FECA payments range from 66 percent to as high as 75 percent of prior wages and are tax-free, with no work required. That's about 26 percent more than they would receive under the normal civil service pension, which is subject to federal taxes.
Various proposals have been made to reform the system. Sen. Susan Collins, R-Maine, has sponsored a bill that would have forced FECA recipients to convert to the regular federal employee pension plan at retirement age. DOL itself has called for capping benefits to 50 percent of prior pay after retirement age. Those are good ideas, but they wouldn't address the problem of people fraudulently getting payments in the first place. Here's two better ideas: First, Congress should give DOL access to Social Security Administration or National Directory of New Hires databases to identify recipients working unreported side jobs. Second, chop agency budgets whenever fraudulent recipients are uncovered by investigators outside their workplace.