Workers' Compensation: Health Benefit Programs for Returned Peace Corps Volunteers and for Employees of U.S. Agency for International Development Contractors

What GAO Found

Peace Corps and the U.S. Agency for International Development (USAID) both provide health benefits through workers' compensation programs. Peace Corps provides benefits to returned Peace Corps volunteers who sustain illnesses or injuries connected to their Peace Corps service under the Federal Employees' Compensation Act (FECA) program administered by the Department of Labor (DOL). USAID provides benefits to employees of contractors and subcontractors working outside the United States for service-connected illnesses or injuries through a separate workers' compensation program administered by DOL under the Defense Base Act (DBA). Examples of the similarities between the programs include the fact that the benefits are provided to individuals for illnesses or injuries sustained while performing work overseas, and that eligible individuals may perform similar work, such as work in developing countries related to providing health and education services.

A key difference between the benefits provided under these programs is that Peace Corps reimburses for medical expenses while USAID pays for insurance, which results in the agencies facing different financial risks. Although DOL initially provides reimbursement for expenses incurred for volunteers' medical care, Peace Corps is ultimately responsible for these costs. As a result, Peace Corps bears the risk if volunteers' medical expenses are higher than expected. In contrast, USAID pays for insurance by reimbursing its contractors and subcontractors for the cost of premiums to insure their employees, and the agency's insurer is responsible for the costs of employees' medical expenses. As a result, USAID's insurer bears the risk if employees' medical expenses are higher than expected, provided a claim is not a war-risk hazard case, in which case it is reimbursed by DOL.

In part because of the difference in health benefits and in part because returned Peace Corps volunteers receive benefits under FECA while active employees of USAID contractors working overseas generally receive DBA insurance benefits, the processes by which beneficiaries obtain their medical care are also different. For example, returned Peace Corps volunteers receive medical care in the United States, whereas employees of USAID contractors typically receive care overseas through local providers. In addition, analysis of data from the most recent 5 years available for each program showed that returned volunteers and employees of USAID contractors and subcontractors may face a different risk of illness or injury. For example, two of the most common illnesses and injuries among returned Peace Corps volunteers that received FECA benefits included 1) mental, emotional, and nervous conditions and 2) dental conditions. In contrast, among employees of USAID contractors and subcontractors that received DBA benefits, two of the most common illnesses and injuries not caused by a war-risk hazard were classified by USAID's insurer as strained body part and broken/fractured body part; for those caused by a war-risk hazard, the conditions included mental anguish and death.

Because the costs incurred for both agencies reflect the differences GAO has identified in this report, they are not directly comparable. Furthermore, GAO did not conduct an actuarial analysis of these costs and therefore did not determine whether one program is more cost effective than the other. Data from the most recent 5 years available for each program show that Peace Corps paid a total of about $41.0 million to provide reimbursements for medical expenses to 3,305 returned volunteers. In contrast, USAID paid a total of about $67.0 million to cover contractors' and subcontractors' premium costs for their overseas employees. USAID officials told us that neither they nor their insurer track the total number of employees for which they provide this insurance.

Why GAO Did This Study

In 2012, GAO found that returned Peace Corps volunteers may face challenges in applying for and receiving FECA benefits, such as in finding available medical providers. GAO also found that returned volunteers are a unique population compared to others receiving benefits under FECA. GAO was asked to provide information on how the benefits provided to volunteers under FECA compare to benefits provided to employees of USAID contractors and subcontractors working outside the United States under DBA. In this report GAO identifies the similarities and differences between the workers' compensation health benefits program for returned Peace Corps volunteers and the program for employees of USAID contractors and subcontractors. GAO obtained and reviewed data covering each program. DOL and USAID collect different data for each program, covering different periods of time. To allow for the best comparison possible, GAO used data on each program for an approximate 5-year period. Specifically, GAO analyzed data collected by DOL on health benefits paid on behalf of Peace Corps, reviewed insurance premium cost summary reports from USAID, and analyzed data collected by USAID's insurer for DBA insurance claims. GAO also reviewed agency documents and interviewed officials from DOL, Peace Corps, USAID, and USAID's insurer.