War Hazards Compensation Reform Act
- Sponsor
- Rep. Lawler, Michael [R-NY-17]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Jun 29, 2026
Bottom line
The bill aims to alleviate financial burdens on insurance carriers and employers involved in overseas and national defense activities by ensuring timely federal reimbursement and easing collateral requirements for war hazard compensation claims.
What it actually does
This bill amends the War Hazards Compensation Act (WHCA) to mandate that the federal government pay interest on late reimbursements to private insurance carriers for WHCA claims. It also requires the Division of Federal Employees' Compensation (DFEC) to hire at least 15 full-time examiners and prohibits the Secretary of Labor from requiring collateral for liabilities arising from WHCA-reimbursable claims under the Longshore and Harbor Workers' Compensation Act (LHWCA).
Proponents argue
Proponents argue that the current system of delayed federal reimbursements for WHCA claims imposes significant carrying costs on private insurance carriers, discouraging their participation and increasing insurance costs for government contractors. They contend that requiring interest on late payments and eliminating collateral requirements will stabilize the market, ensure the availability and affordability of coverage, and ultimately support national defense efforts by making it easier for contractors to operate.
Opponents contend
While the bill addresses specific administrative issues, potential opponents might raise concerns about the financial implications for the federal government, arguing that paying interest on late reimbursements and hiring additional staff could increase federal expenditures without directly benefiting injured workers. However, given the nature of the bill, direct, organized opposition is unlikely.
The bill is short and clearly written, making it accessible for a quick and informed review.
Section 2(b), adding Section 108 to Title I of the WHCA.
Federal Government to Pay Interest on Late WHCA Reimbursements
This provision requires the Division of Federal Employees' Compensation (DFEC) to acknowledge or identify deficiencies in reimbursement claims within 14 days of receipt. If DFEC fails to do so, the claim is deemed acknowledged. Interest will then accrue on the amount owed if reimbursement is not made within 60 days of acknowledgment, using the IRS overpayment rate. This aims to compensate insurance carriers for the financial burden of delayed federal payments.
Supporters argue
Supporters argue this provision addresses a critical financial burden on insurance carriers, who currently bear the cost of federal delays. By requiring interest, it incentivizes timely federal reimbursement, stabilizes the insurance market for war hazards, and ensures the continued availability of coverage for vital national defense activities.
Critics contend
While direct opposition is unlikely, some might argue that this provision could increase federal administrative costs and potentially lead to higher expenditures if DFEC struggles to meet the 60-day deadline consistently.
Tradeoffs
The bill balances the need to compensate private entities for federal delays against potential increases in federal administrative costs and expenditures. It aims to shift the financial burden of delay from private insurers to the federal government.
Section 3
Mandate for Hiring WHCA Claim Examiners
This section mandates that the Division of Federal Employees' Compensation (DFEC) within the Department of Labor hire a minimum of 15 full-time employees specifically for reviewing and processing War Hazards Compensation Act (WHCA) claims. This aims to improve the efficiency and speed of claim processing, thereby reducing reimbursement delays.
Section 4(b), adding Section 32(c) to the LHWCA.
Elimination of Collateral Requirements for WHCA-Reimbursable Claims
This provision amends the Longshore and Harbor Workers' Compensation Act (LHWCA) to prohibit the Secretary of Labor from requiring insurance carriers to post collateral, security, or other financial assurance for liabilities that are reimbursable under the War Hazards Compensation Act (WHCA). The bill notes that the U.S. Government ultimately bears financial responsibility for these payments.
For any War Hazards Compensation Act (WHCA) reimbursement claims that are outstanding on the date the bill is enacted, they will be legally considered as 'acknowledged' on that enactment date. This means the 60-day clock for federal interest accrual on late reimbursements will begin immediately for these existing delayed claims.
Section 2(c)
Why it matters:This is standard legislative practice to ensure new rules apply fairly to ongoing situations, rather than being an attempt to be evasive. It provides clarity on the effective date for existing claims.
Case for: Supporters would argue this ensures immediate relief for carriers already burdened by outstanding delayed claims, preventing further financial strain by allowing interest to accrue on these long-pending reimbursements without additional administrative steps.
Case against: No specific opposition is typically raised against this provision, as it aligns with the overall intent of the bill to address current delays and provide financial relief to carriers.
Estimated impact: This provision provides immediate financial relief to insurance carriers with existing delayed claims, potentially leading to immediate interest payments by the federal government for those claims that exceed the 60-day window post-enactment.