Enacted in August of 1941, the Defense Base Act (DBA) is an extension of workers’ compensation that covers government contractor employees outside the United States. The act was later amended to include public works contracts with the government that included the building of roads harbors, dams, and schools abroad. Other amendments were also added over time, including enterprises associated with U.S. national security. Today, nearly any contract with a U.S. government agency that consists of work outside the U.S. requires DBA coverage. However, there are certain guidelines that must be followed to acquire and maintain coverage.
What Does DBA Insurance Cover?
Defense Base Act Insurance is a legal requirement for any person working outside of the United States who is employed under the U.S. military or public works. This special type of workers’ compensation insurance protects the employer and the contract employee when working on public sector projects outside the continental U.S. With DBA insurance, coverage is provided in the event of an injury, illness, or death. DBA insurance covers workers’ compensation benefits such as medical and disability. Coverage will also cover any death that occurs due to a work-related incident. Higher benefit levels may be provided to eligible employees and could include an extension of the work day to 24 hours per day. Benefits provided by Defense Base Act insurance may include the following:
- Total Disability: Disability coverage covers two-thirds of an employee’s average weekly earnings. The maximum amount per week for disability benefits is $1,030.78.
- Permanent Total Disability: In the event of permanent total disability, an employee may be paid benefits for life. These payments may be adjusted as the annual cost of living changes over time.
- Receiving Treatment: If an employee becomes injured or ill due to employment outside the U.S., they are entitled to receive treatment by a physician of their choice.
- Death Benefits: In the event of an employee’s death, the surviving spouse or one child will receive half of the employee’s average weekly earnings. If the deceased employee has two or more survivors, such as a spouse and multiple children, then the benefit is two-thirds of the employee’s average weekly earnings. These benefits may go up to the weekly maximum.
- Aliens and Non-U.S. Residents: If an injured or ill employee is an alien or non-U.S. resident, benefits may be reduced to 50 percent of the current value of future compensation.
What Is the Criteria for DBA Insurance?
Under the Defense Base Act, all contractors and subcontractors must be engaged in specific activities in order to gain DBA insurance coverage. These activities may include:
- Working on a public work contract with any government agency in the U.S., such as a service or construction contract related to war activities or national defense.
- Working for a private employer on a U.S. military base or on any land that is used by the United States for military purposes outside the U.S.
- Working on any contract outside the U.S. that has been approved and funded by the United States under the Foreign Assistance Act. This contact may provide the cash sale of military materials, equipment, or services to U.S. allies.
- Working for an American employer to provide welfare or similar support services outside the U.S. for the benefit of the Armed Forces.
Employees working outside of the United States must only meet one of the criteria listed above to be eligible for Defense Base Act insurance coverage, regardless of the employee’s nationality. The exception is when an employee acquires an official waiver from the Security of the Department of Labor. Contractors or contracting agencies who obtain a DBA waiver are released from the requirement to obtain DBA insurance if the employee is of a foreign nationality.
Who Should File DBA Claims?
It’s important to report illnesses and injuries and file claims that proper way to obtain full benefits from DBA insurance. The employer will typically notify the Defense Base Act insurance carrier immediately after an injury, illness, or death occurs. If medical attention or treatment is required, authorization from the insurance carrier should be provided right away. Form LS-202, also known as the Employer’s First Report of Injury, should also be filed within ten days of the injury date. If this process is completed accurately, the injured employee will likely receive the compensation they seek in accordance to DBA insurance rates.
What Requirements Must Be Followed?
Certain requirements must be followed by the employee and employer to make sure that coverage is provided by the insurance carrier. A DBA insurance policy must be taken out for an employee before the employment contract commencement. The employer, which could mean a contractor, subcontractor, or government agency, is required to pay all premiums on the insurance policy. The employer is also responsible for ensuring that an employee receives all benefits or compensation if a situation warrants it. The insurance policy must also be maintained for the entire duration of the employment contract.
What Are Insurance Waivers?
If an employee acquires an insurance waiver, the employer or contractor must offer workers’ compensation coverage in the event of a work-related injury, illness, or death. There are two primary types of waivers – geographic and contract specific. Geographic waivers may be granted to foreign workers or local national employees if the host country offers an adequate workers’ compensation system. Contract specific waivers may be granted if a contractor is adequately “self-insured” or has purchased workers’ compensation insurance that offers coverage that is equivalent in nature to the coverage provided by Defense Base Act insurance.