Defense Base Act (DBA) insurance is a specialized workers’ comp program covering civilians working overseas on U.S. military bases or U.S. government contracts abroad. Implemented in 1941, the DBA provides the same protections as the Longshore and Harbor Workers’ Compensation Act.
It covers employees working abroad on public works contracts with agencies of the U.S. government, including construction and services contracts connected to national defense.
Who Needs DBA Insurance Coverage?
The Defense Base Act mandates that any company working on a U.S. government contract abroad must purchase DBA insurance to cover all their employees.
This includes U.S. companies working on military bases or U.S.-occupied territories abroad, companies providing services to the military or other agencies overseas, construction firms contracted for development projects abroad, and more.
DBA insurance is compulsory for these employers, who must purchase a policy through a Department of Labor-approved insurer before starting work overseas. Coverage applies equally to U.S. citizen workers and local or third-country national employees hired abroad. Employers failing to secure DBA coverage face heavy fines and criminal charges.
Comprehending DBA Insurance Benefits
DBA insurance provides injured employees with medical care and wage replacement benefits for disabilities, along with death benefits for surviving dependents. This no-fault coverage protects workers regardless of how an injury or death occurs, even covering hostile acts or terrorist activity while on the job abroad.
Specific benefits under DBA policies include:
Medical Benefits
- Covers all medical treatment required for work-related injuries and illnesses
- Employees can choose their own treating physician
- Includes coverage for hospitalization, surgery, prescriptions, physical therapy, and other care
- Medical benefits cannot be limited or commuted to lump sums
Disability Income
- Pays 2/3 of the employee’s average weekly salary for total disability
- Current maximum weekly rate is $1,726.98 per week
- Partial disability benefits available depending on level of impairment
- Wage-loss payments continue until the employee fully recovers
Death Benefits
- Provides income replacement to surviving dependents
- Payable at half of the employee’s average weekly earnings for a single survivor
- Increases to 2/3 of the average weekly wage for two or more survivors
- No cap on the number of years paid as long as qualified dependents remain
Burial Expenses
- Covers the full cost of burial and funeral services up to $3,000
How Do DBA Claims Work?
When an employee injury occurs abroad on a U.S. government contract, prompt injury reporting and coordinated medical care are essential. Fundamental steps in the Defense Base Act claims process include:
Report All Injuries
Employers are required to report any work-related illness or injury causing one or more missed work days to the Department of Labor within 10 calendar days. This involves completing and submitting Form LS-202 (Employer’s First Report of Injury or Occupational Illness) with details on the date, nature, and cause of the incident.
Coordinate Quality Medical Care
Upon receiving notice of an injury, DBA insurance carriers will assign medical management services to facilitate access to quality treatment for injured workers abroad.
This involves identifying appropriate local providers, scheduling needed care, covering associated costs, and overseeing ongoing care needs. Employers play an important role in this coordination by providing relevant medical history, helping injured staff get to appointments, and relaying updated work status information.
Thorough Injury Documentation
To accurately evaluate DBA benefits, detailed medical documentation of an employee’s treatment, prognosis, and work capacity is gathered over time. This includes doctor’s notes, test results, treatment records, hospital bills, and more. Claims adjusters may also collect statements from witnesses along with wage payment histories documenting pre-injury earnings.
Benefits Determination and Payment
Once all relevant claim information is compiled, Department of Labor examiners undertake a thorough review to determine applicable benefits and issue an order outlining the compensation schedule.
This formal order specifies weekly income replacement amounts, spans of disability, and medical costs to be covered moving forward. Ongoing claim monitoring helps secure proper payments to injured staff or surviving dependents throughout an individual’s treatment or recovery.
What Exclusions or Exemptions Apply?
Government agencies can apply for and receive DBA coverage waivers, excluding foreign national workers hired outside the U.S. in certain countries. Waivers are not applicable to U.S. citizens or legal residents working abroad. Workers excluded under waivers must have access to alternative compensation programs mandated by local law.
DBA coverage can also terminate following a work injury healing completely, based on voluntary resignation, or termination for a cause unrelated to a disability. Written employer notice is required to terminate benefits.
Penalties for Noncompliance
Employers who neglect or refuse to purchase DBA insurance can face severe civil and criminal penalties:
Fines up to $10,000 per violation- Misdemeanor charges punishable by imprisonment up to 1 year
- Personal liability for corporate leaders who fail to comply
- Employees can sue noncompliant employers for damages
In addition, if a subcontractor lacks proper DBA coverage, liability shifts automatically to the general contractor overseeing the project.
Rely on the Defense Base Act Experts at CI Solutions
Making sure your overseas staff maintain access to fair workers’ compensation protection takes careful preparation and partnering with specialized professionals. Avoid gambling with gaps in comprehending complex federal requirements for overseas staff injury and fatality coverage.
CI Solutions’ seasoned DBA insurance advisors have helped countless organizations effectively align with the requirements of this essential program. Lean on our team’s expertise to guarantee you meet all Defense Base Act obligations without fail. Contact us today at 703.988.3665 or online to review your DBA insurance needs and guarantee full compliance.