Federal Acts

Summaries of LHWCA, FECA, FCMHSA, Jones Act, FELA, MSAWPA

The term “federal coverages” is loosely utilized to describe insurance coverage offered to indemnify an employer from liability imposed pursuant to any of the following federal statutes:

Federal Workers Compensation Laws

  1. Longshore and Harbor Workers Compensation Act (LHWCA) [maritime employees, not crew of vessels]and extensions of the LHWCA:
    • Outer Continental Shelf Lands Act (OCSLA)
    • Defense Base Act (DBA)
    • Nonappropriated Fund Instrumentalities Act (NFIA)
  2. Federal Employees Compensation Act (FECA) [civilian employees of US government]
  3. Federal Coal Mine Health and Safety Act of 1969 (FCMHSA) and
    Federal Mine Safety & Health Act of 1977 [coal miners]

    Federal Employers Liability Laws
  4. Jones Act (also known as Merchant Marine Act of 1920) [seamen, crew of a vessel]5. Federal Employers Liability Act (FELA) [employees of interstate railroads]6. Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA)
  5. Here’s a description of each statute:
  6. Longshore and Harbor Workers Compensation Act (LHWCA)
    Title 33 of the United States Code, Sections 901 through 950. Like the states’ workers compensation acts, it is a no-fault statute which sets forth a schedule of benefits payable in the event of a covered injury. Coverage under LHWCA turns on two tests–situs and status. In order to be covered, the injury must have occurred upon navigable waters, including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or any other adjoining area used in the construction, repair, lading, or unlading of a vessel, and the employee injured must have been engaged in maritime employment, but not a master or crew member of a vessel. While the LHWCA mandates payment of benefits at a statutorily prescribed level, the Act itself contains no explicit requirement that an employer insure its liability. Because many injuries arguably covered by LHWCA are also compensable under the applicable state workers compensation law, this coverage can raise an interesting conflict of law issue. Depending on the state and the nature of the injury, benefits payable under the LHWCA may be more or less than those under the State Act. 

    The LHWCA is administered by the US Department of Labor, and any carrier desiring to offer LHWCA coverage must first secure the approval of the Department of Labor (see Longshore Authorization document). Endorsement WC 00 01 06 A

    Federal Employees Compensation Act (FECA)
    Provides no-fault workers compensation benefits to civilian employees of the US government. The US government self-insures FECA benefits.

    • Federal Coal Mine Health & Safety Act of 1969  (FCMHSA)
    • Federal Mine Safety & Health Act of 1977
    • Mine Improvement and New Emergency Response (MINER) Act of 2006

The FCMHSA law was enacted by Congress in 1969 (amended in 1977) as the result of increased national attention focused on the working conditions of coal miners following the explosion of a Consolidated Coal Company mine in Farmington, West Virginia in 1968. The Federal Coal Mine Health and Safety Act is a compensation act, much like LHWCA Act. As with the LHWCA, nothing in the Act explicitly requires an employer to insure its liability. It is jointly administered by the Social Security Administration and the US Department of Labor.

As part of the Act, Congress adopted a temporary program for the provision of emergency benefits to coal miners disabled by pneumoconiosis (black lung disease). Permanent entitlement regulations were adopted in 1980. The Act initially created a set of presumptions to assist claimants in establishing eligibility. It was amended in 1972, 1977, and 1981, with each amendment liberalizing the entitlement criteria. While the original Act applied only to underground mines, coverage has since been extended to miners working in surface mining, and payment of benefits has been extended to survivors of miners totally disabled by pneumoconiosis regardless of the cause of death. There is no statute of limitations for filing a survivor’s claim, and there is a rebuttable presumption of entitlement to any miner with 15 years of underground coal mine experience who can prove total disability due to a respiratory or pulmonary impairment. Endorsement WC 00 01 02

Liability Under MSHA
Guidance from the U.S. Department of Labor, Mine Safety and Health Administration, District 8 (includes Indiana) indicates that truckers who do not operate coal mines, but who have a coal exposure, are subject to the Mine Safety and Health Act of 1977 (MSHA). 

Mines Subject to Act, Sec.4 states: Each coal or other mine, the products of which enter commerce, or the operations or products of which affect commerce, and each operator of such mine, and every miner in such mine shall be subject to the provisions of this Act.  

The definitions in the Mine Act under Sec.3, Item (d) states “operator” means any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine.”  

Therefore, trucking employers who do not operate coal mines, but who enter onto mine property to perform services are subject to the provisions of the Federal Mine Safety and Health Act of 1977.  

Premium Charge
An additional premium is charged for employers who do not operate coal mines, but who have a coal exposure under the Federal Mine Safety and Health Act of 1977 (MSHA). The extra premium charge for this disease exposure is reported under:

Code 0164 “For reporting disease experience in connection with any classification other than coal mining where there is liability under the Federal Coal Mine Health & Safety Act.”The premium charge is equal to 10% of the nonratable disease element for Code 1005 “Coal Mining – Surface & Drivers.” 

The Black Lung Benefits Act is administered by the U.S. Department of Labor, Employment Standards Administration, Office of Workers’ Compensation Programs. Its website contains a page titled “Compliance Guide to the Black Lung Benefits Act” which contains this information on insurance:

“The Black Lung Benefits Act requires each coal mine operator to secure the payment of its benefits liability by either qualifying as a self-insurer or by purchasing and maintaining in force a commercial insurance contract (including a policy or contract procured from a State agency). Any coal mine operator who is required to secure the payment of benefits and who fails to do so is subject to a civil penalty of up to $1,000 for each day of noncompliance. In addition, the president, treasurer and secretary of an uninsured coal mine operator that is a corporation may be liable for the payment of benefits owed to former employees. Coal transportation and coal mine construction employers who are not also coal mine operators do not have to secure benefit payments in advance; however, once an employee is awarded benefits, the Department may require the employer to secure a bond or otherwise guarantee payment.”

Cancellation Rules

Specific cancellation rules also apply for carriers when a policy includes this Federal coverage, they are as follows from the U.S Department of Labor: ” A commercial insurance carrier is required to report each insurance policy or endorsement issued, canceled or renewed by the carrier to an operator. The reports must be sent by the carrier’s home office, except that the carrier may authorize its agency or agencies to make such reports. Separate reports are required for each operator covered by a particular policy that is issued or renewed. Notice of cancellation must be given 30 days prior to the date the cancellation is to take effect. Carriers that are liable for benefits on behalf of an employer are required to report to OWCP immediately after making the initial benefit payment and after suspending the payment of benefits. Carriers are also required to provide any additional reports as OWCP may require for the efficient administration of the Act.”

Division office serving Indiana:
U.S. Department of Labor
Division of Coal Mine Workers’ Compensation
1160 Dublin Road Suite 300
Columbus, Ohio 43215
(614) 469-5227 Toll-Free: (800) 347-3771
Department of Labor AND Social Security Black Lung Claims; Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.

Jones Act
Title 46 of the United States Code. This law is not a compensation act. The Jones Act gives to seamen or their personal representatives a right of action against the employer for negligence. The Jones Act applies only to “seamen”. Although the Act does not define, “seamen”, a worker is considered to be a “seaman” if he or she is permanently assigned to a vessel, including special purpose floating structures, performs a substantial portion of functions on the vessel, and contributes to the function or welfare of the vessel. Unlike a workers’ compensation act, the Jones Act prescribes no statutory benefits for an injury, and requires the injured seaman to establish negligence and prove damages in order to recover. What it does for the employee, however, is to abolish the fellow servant and assumption of risk defenses that would otherwise be available to a defendant-employer at common law. If actionable negligence can be proven, the damages recoverable in a lawsuit under the Jones Act will often exceed the benefits payable under a compensation act. Endorsement WC 00 02 01 A

Federal Employers Liability Act (FELA)
Title 45 USC Sections 51-60. This law, as its name would suggest, is not a compensation act. FELA gives employees of interstate rail carriers an action in negligence against their employers. Like the Jones Act, FELA eliminates the fellow servant and assumption of risk defenses, and mandates the use of comparative negligence in place of common law contributory negligence. FELA makes a railroad engaged in interstate commerce liable for bodily injuries sustained by an employee. That liability of the railroad is insured by the standard workers compensation policy, Part Two, Employers Liability Insurance unless specifically excluded. Attach the Federal Employers Liability Act Coverage Endorsement WC 00 01 04.

Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA)
Establishes a private right of action for actual or statutory damages (as well as criminal and administrative sanctions) against employers and contractors of migrant workers who violate the Act’s requirements for housing, motor vehicle safety, motor vehicle liability insurance, and job information disclosure. Endorsement WC 00 01 11