Representative Elijah Cummings recently proposed H.R. 5891, known as the “Defense Base Act Insurance Improvement Act of 2012.” The purpose of H.R. 5891 is to “amend the Defense Base Act to require the provision of insurance under that Act under a Government self-insurance program, and to require an implementation strategy for such self-insurance program.” The bill would require the government to create a self-insurance program that excludes private carriers, and it essentially relieves employers (i.e. contractors) of paying compensation. Instead, benefits would be funded by the government agency whose contract was “affected.” Beyond that, the bill requires the development and execution of an implementation strategy to for the self-insurance program, including the development of a strategy for transferring Defense Base Act (“DBA”) and War Hazards Compensation Act (“WHCA”) claims to the program.
More likely than not, this bill is destined to fail. And for good reason. H.R. 5891 leaves too much unsaid. For the sake of argument, suppose that the respective government agencies are able to develop the required implementation plan and receive the DBA and WHCA claims. What happens next? How are benefits paid? Will both indemnity and medical benefits remain the same? Or is H.R. 5891 a precursor to greater change throughout the DBA world?
For more commentary about the bill, check out John Kawczynski’s article at LexisNexis’ Worker’s Compensation Law Community.