POSTAL SERVICE SEEKS COMP RULE CHANGES

POSTAL SERVICE SEEKS COMP RULE CHANGES

The U.S. Postal Service is urging Congress to change workers compensation regulations so injured federal employees can be returned to work sooner.

Postal officials say they have been thwarted in their attempt to cut workers compensation expenses because of regulations in the Federal Employees Compensation Act.''The Postal Service believes the only way to achieve significant reductions in short- and long-term liability is by changing those provisions in the Federal Employee's Compensation Act that often act as a disincentive for injured workers to return to productive work,'' said Mr. Larry B. Anderson, the Postal Service's manager of Safety and Workplace Assistance.

CHANGES NECESSARY

''We see the proposed legislative changes as necessary to return the FECA to the original congressional purpose as a wage replacement system and to control expansion of governmentwide liability, which, if left unchecked, has great cost potential.''

Mr. Anderson noted that workers comp costs have increased dramatically for the postal service since the FECA was amended in 1974. That year, postal payments totaled $29 million.

''Twenty years later, in 1994, the costs totaled $501 million and, in 1997, were about $540 million, including administrative charges,'' Mr. Anderson said.

The Postal Service has introduced safety and accident prevention programs and has been aggressively pursuing fraud to cut its workers compensation expenses. ''We have increased our focus on safety and health by incorporating safety and health performance into a pay-for-performance compensation system for supervisors, managers and executives,'' Mr. Anderson said.

Investigation of fraud has resulted in 375 individuals being suspected of workers compensation fraud; 43 of those violations led to arrests.

He said the programs have cut the annual growth in workers compensation cash outlays during the last five years from an average of 5.9 percent to 1.6 percent last year. This contrasts with total compensation claims, which dropped 2.7 percent last year and total medical claims, which decreased 1.1 percent from the previous year.

PRIVATE SECTOR LEADS THE WAY

While the Postal Service tries to cut its losses, the private sector already has. The National Council on Compensation Insurance reports overall workers compensation costs have been cut by $3.6 billion since 1991.

Pam Heard, a NCCI research actuary, said the industry's exposure has been reduced by the introduction of employer deductibles in 1989 and by self-insurance programs. Claims reductions have been realized through limitations on attorneys' fees, American Medical Association guidelines that clarify awards, more aggressive anti-fraud measures and better controls on administration and managed care, she said.

''The growth in costs per claim slowed down significantly between the 1980s and 1990s,'' said Ms. Heard. ''At the same time, we had significant reductions in claims frequency.'' In the private sector, she said, the cost per worker dropped 2 percent in 1996.

RECOMMENDATIONS TO CONGRESS

In an attempt to cut its costs, the Postal Service is recommending to Congress that it: * Lower guaranteed life benefits to claimants so that no worker would receive more than two-thirds salary in tax-free benefits.

* Create an annuity to take effect two years after an injured individual would have been eligible to retire if still a federal employee. This would recognize inequities in the program, which treats injured retired workers better than healthy retirees. Currently, an injured worker receives up to three-fourths his salary in tax-free benefits while a retiree receives just 56 percent of his pay in taxable benefits.

* Re-establish a three-day waiting period, in which employees would use annual or sick leave before regular pay is established. Regular pay is paid for a period of 45 days, after which workers compensation pays injured employees who have not returned to work.

* Stop tying increases to the Consumer Price Index. Since workers comp is a substitute for regular salary, cost-of-living adjustments should not continue to be tied to the CPI, but instead to federal employee wage scale increases.