War Hazards Compensation Reform Act

Congress finds the following:

(1) The War Hazards Compensation Act (42 U.S.C. 1701 et seq.) (in this Act referred to as the WHCA) relies on private insurance carriers to advance payment of compensation to covered employees, often for extended periods, before reimbursement by the United States.

(2) Delayed reimbursement imposes substantial carrying costs on insurance carriers and insured employers.

(3) Persistent delays in reimbursement discourage insurer participation under the WHCA and threaten the availability and affordability of insurance coverage for employers engaged in overseas and national defense related activities.

(4) Under the WHCA, there is no provision for the accrual of interest on late WHCA reimbursements, which effectively shifts the cost of Federal delay onto insurance carriers.

Title I of the War Hazards Compensation Act (42 U.S.C. 1701 et seq.) is amended by adding at the end the following new section:

A claim for reimbursement made pursuant to section 104(a) shall include the following:

(A) All forms prescribed by the Secretary for reimbursement under this title, including Form CA–278 (Claim for Reimbursement of Benefit Payments and Claims Expense Under the War Hazards Compensation Act) as provided by the Office of Workers’ Compensation Programs of the Department of Labor or any successor or substantially similar form.

(B) Documentation relating to the payment of benefits for which reimbursement is sought.

(C) Any additional information specifically requested by the Division of Federal Employees’ Compensation of the Department of Labor (in this section referred to as DFEC).

Not later than 14 days after receipt of a claim for reimbursement as described under paragraph (1), DFEC shall issue a written or electronic—

(A) acknowledgment that such claim for reimbursement is accepted; or

(B) notice of any specific deficiency of such claim for reimbursement preventing such acknowledgment.

If DFEC does not issue an acknowledgment or deficiency notice as required under subsection (a)(2), such claim shall be deemed to have been acknowledged under subsection (a)(2)(A) on the date on which DFEC received such claim.

Interest shall accrue at the overpayment rate established under section 6621 of the Internal Revenue Code of 1986 on the amount owed with respect to a claim for reimbursement under section 104(a) beginning on the date that is 60 days after the date on which an acknowledgment is issued under subsection (a)(2)(A).

For the purposes of section 108(a)(2)(A) of the WHCA, as added by the amendments made by this section, any insurance claim for reimbursement made pursuant to section 104(a) of the WHCA that is outstanding on the date of enactment of this Act shall be deemed to have been acknowledged on the date of enactment of this Act.

Not later than 180 days after the date of enactment of this section, the Secretary of Labor shall promulgate regulations to carry out the amendments made by this section.

Congress finds the following:

(1) Under the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 901 et seq.) (in this Act referred to as the LHWCA), employers and insurance carriers are required to secure the payment of compensation to covered employees.

(2) Section 104 of the WHCA (42 U.S.C. 1704) provides for the reimbursement by the United States of benefits paid under the LHWCA for injuries or deaths resulting from a war-risk hazard.

(3) The Department of Labor, under section 703.204 of title 20, Code of Federal Regulations, requires insurance carriers to post collateral to secure reimbursement obligations, including for WHCA claims.

(4) For WHCA claims, the United States Government bears the ultimate financial responsibility for benefit payments, subject to statutory reimbursement procedures.

(5) Requiring full or substantial collateral for WHCA claims imposes unnecessary financial and administrative burdens on LHWCA insurance carriers, increases costs for government contractors, and may discourage carrier participation in markets supporting national defense.

Section 32 of the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 932) is amended by adding at the end the following:

(c) Notwithstanding any other provision of this Act, the Secretary may not require an insurance carrier to post collateral, security, or other financial assurance for liabilities arising from claims reimbursable under the War Hazards Compensation Act (42 U.S.C. 1701 et seq.).

Not later than 180 days after the date of enactment of this Act, the Secretary of Labor shall revise section 703.204 of title 20, Code of Federal Regulations, and any related regulations to conform with the amendments made by this Act.

(1) reduce or delay benefits payable to an injured employee or surviving beneficiary under the LHWCA or WHCA; or

(2) alter the obligation of the United States for timely reimbursement of eligible WHCA claims in accordance with existing law.