Are you a U.S. Government contractor with employees who travel overseas or permanently deploy? If so, let’s start the New Year off right and perform an insurance check-up for your overseas exposures. This article is the first in a series of articles designed to help you review your foreign and DBA insurance coverage needs and plan for the future.

DBA Insurance Coverage

Did you purchase DBA coverage for all contracts that require work OCONUS?
DBA coverage is required for all USG funded contracts (NATO/NAMSA contracts should be reviewed by a DBA attorney to determine whether or not DBA applies) regardless of whether or not the DBA FAR clause 52.228-3 is included in the actual contract document. Failure to provide DBA coverage for an eligible contract can result in substantial fines and potential jail time for corporate officers. In addition, it would result in your company being responsible to pay the benefits normally provided under a DBA policy.

If you’ve already purchased DBA insurance coverage, did you report the payroll only for the period of time the employees are outside the U.S.?
DBA premiums are based on the direct payroll of your employees while working OCONUS under the contract so it is important that you pro-rate the payroll accordingly to avoid being overcharged for your DBA premium.

Do your employees know the claims contact information in case one of them is injured overseas and requires medical evacuation services?
It is important that you provide the DBA carrier’s claim reporting information, including the Emergency Assistance Provider’s contact info, to your employees that travel OCONUS as well as to the project manager in the country of deployment. You should also establish emergency claim reporting procedures for your company so that all parties involved, including your HR Department, are knowledgeable of the DBA claims handling procedure. By doing so you will help ensure timely emergency assistance and claims filing.

These are just a few things that should be considered regarding DBA insurance coverage for the U.S. contractor working abroad. For a full review of your insurance program, please contact Sara Payne, a 25-year veteran of DBA insurance program administration, at 800-291-6182.

COMING NEXT MONTH: an insurance check-up for your Business Travel Accident & Medical Expense Coverage

It comes as no surprise to most government contractors that DBA insurance claims must be submitted within a 10-day window from the time an injury occurs. If the injury causes loss of one or more work shifts, the DBA Act requires that the Employers First Report of Injury(Form LS202) be filed with the Office of Workers’ Compensation (OWCP) District Office having jurisdiction over the claim (based on where the injury occurred) within 10 days of the injury. The form can be filed electronically at
http://www.dol.gov/owcp/dlhwc/ls-202.pdf.

Due to complications resulting from Contractors working in a “war zone,” the OWCP has experienced delays in the filing of DBA claims. Some of the delays are based on the misunderstanding by Contractors that it is the DBA insurance carrier’s responsibility to file the initial LS202 with the OWCP.

Most DBA carriers accept the filing of the LS202 from their clients, then issue a courtesy filing with the OWCP within 14 days from the date of receipt of the insured contractor’s claim (the DBA carrier’s required filing deadline). Because of this, most Contractors believe that notice to the DBA carrier is notice to the OWCP.

That is not the case.

Contractors should be aware that, as the Employer, the OWCP requires them to file the LS202 directly with the appropriate office that has jurisdiction over the claim within 10 days of the injury, and also with the DBA carrier providing the DBA coverage for the contractor. The DBA carrier must then advise the OWCP of their position on the claim’s compensability within 14 days or face fines and penalties for late filing.

If the OWCP considers the LS202 claim filing late, the Contractor can be fined up to $11,000 for each late claim filing. The OWCP began to issue late filing penalties to Contractors in early 2009 and will enforce the collection of those penalties.

As an Employer, you are advised to institute a written DBA insurance claims filing procedure that is clearly communicated, via your Human Resources Department, to your Employees and the Project Managers OCONUS. The LS202 claim form should be filed with your HR Department from the location of the injured worker as soon as practical—even if the claim is questionable. Be sure that any incident report and all medical records are included with the initial filing, as this will ensure timely administration of the DBA benefits for your employee. Once your HR Department receives notification of a pending DBA claim, the LS202 claim form and all pertinent documents should be filed with the OWCP Office— and the DBA carrier simultaneously— to avoid any late filing penalty.

This timely and fully documented claim filing will help expedite the benefits paid to the injured worker/deceased worker’s family.

Author:  Sara Payne | Senior Vice President-Lockton Affinity and 25-year veteran of Defense Base Act insurance programs | 800.291.6182 | info@latitudeglobalcontractorinsurance.com

The LATITUDE team at Lockton Affinity offers government contractors free program reviews to identify ways to improve their foreign insurance program. Contact us today to get started.