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Below are the head notes for the FAB decisions and orders relating to the topic heading, Offset of Benefits. The head notes are grouped under the following subheadings: Apportionment, Effect of surplus, In general, and When offset not required. To view a particular decision or order in its entirety, click on the hyperlink for that decision or order at the end of the head note.

Apportionment

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Effect of surplus

  • In a prior decision, FAB had concluded that the employee’s medical benefits for the covered illness of asbestosis had to be offset to reflect his tort recovery for the same asbestos exposure that led to his asbestosis, leaving an outstanding surplus of $22,466.37 to be absorbed from any future payments. In this decision, FAB directed that the remaining surplus be absorbed by reducing the dollar amount of the employee’s award of impairment benefits based on the same covered illness of asbestosis, once again because the asbestos exposure that formed the basis for the tort suit also led to the employee developing asbestosis. Accordingly, those benefits were reduced by $22,466.37 and the FAB awarded the employee the net amount of his entitlement, $2,533.63. EEOICPA Fin. Dec. No. 10008601-2006 (Dep’t of Labor, March 20, 2009).
  • Individual received $20,273.11 to settle a law suit alleging occupational asbestos exposure and a surplus of $12,235.01 remained after offsetting all Part E benefits due. Therefore, he will not receive any medical benefits for treatment of his asbestosis until the surplus is absorbed, and the surplus will be absorbed once he pays for otherwise reimbursable medical expenses in the amount of $12,235.01. EEOICPA Fin. Dec. No. 10014306-2006 (Dep’t of Labor, August 23, 2006).
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In general

  • Reasonable out-of-pocket costs and expenses incurred in bringing a tort case, like filing fees, traveling expenses, record copy services, witness fees, court reporter costs, postage and long distance telephone calls, are included in offset calculations only if they have already been paid by the claimant. Amounts due to medical providers but not yet paid by the claimant or deducted from the amount received by the claimant in settlement of his asbestos exposure lawsuit were improperly included in the calculation of the surplus to be absorbed from medical bill payments and future lump-sum compensation payments to the claimant under Part E. EEOICPA Order No. 10074228-2009 (Dep’t of Labor, September 30, 2010).
  • Where employee’s previous award of $167,500.00 for impairment under Part E was reduced to $136,573.00 to reflect a tort suit recovery, the district office incorrectly calculated the survivor benefits payable to the employee’s spouse by subtracting the award paid to the employee after tort offset from the total amount of compensation payable to the survivor under Part E (i.e. $250,000.00 - $136,573.00). The amount of survivor benefits should have been calculated by reducing the total amount payable under Part E by the amount of impairment compensation awarded to the employee prior to the tort recovery offset (i.e. $250,000.00 - $167,500.00). EEOICPA Order No. 20120607-12007-1 (Dep’t of Labor, July 12, 2012).
  • Settlements from asbestos bankruptcy trusts are treated like any other tort settlements for the purposes of offset determination.  Asbestos bankruptcy trust settlements are not received pursuant to filing a “lawsuit” or a complaint in court.  Rather, administrative claim forms are submitted to an asbestos bankruptcy trust and are used by DEEOIC to compare the pertinent exposure paid for by the asbestos bankruptcy trust with the exposure supporting the award of EEOICPA benefits.  If such administrative claims are not available, other evidence may be considered to make this comparison.  EEOICPA Fin. Dec. No. 20231211-50025412-3 (Dep’t of Labor, January 22, 2024).
  • While all of the costs of the employee’s tort case were itemized, some of them were not allowable deductions from his settlement payments under DEEOIC’s procedures.  Unallowable costs include normal office expenses (usually referred to as “overhead” costs), such as in-house record copying costs, as well as expenses that have been shared among multiple plaintiffs and are not otherwise attributable to specific costs in an employee’s own tort suit.  EEOICPA Fin. Dec. No. 20221201-48314-5 (Dep’t of Labor, December 13, 2022).
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When offset not required

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