THE NONAPPROPRIATED FUND INSTRUMENTALITIES ACT (NFIA)

(December 2020)

BACKGROUND

The Nonappropriated Fund Instrumentalities Act (NFIA) was enacted by legislation in 1952. Its primary goal was to make the provisions of the United States Longshore and Harbor Workers' Compensation Act (USL&HWCA) apply to civilian employees who provide certain services for military personnel. Nonappropriated funds of the United States Armed Forces are used to pay these civilians. Their jobs are to provide comfort, pleasure, contentment, and mental and physical improvement to Armed Forces personnel.

Civilians covered under this Act include those who work at the following:

· Army and Air Force Exchange Service (AAFES)

· Army and Air Force Motion Picture Service (AAFMPS)

· Navy, Marine, and Coast Guard Exchanges

· Navy Ship Stores Ashore

· Other United States instrumentalities under Armed Forces jurisdiction. Examples are civilian fire departments at the facility and janitorial or maintenance employees.

Note: These civilian employees are not considered employees of the United States for purposes of any laws the Civil Service Commission administers or any provisions of the Federal Employees' Compensation Act.

BENEFITS OF THE ACT

NFIA provides the following benefits to covered employees of the National Armed Forces who are injured or die in the course of their employment:

• Medical Care

These employees are entitled to the medical care benefits the USL&HWCA provides. They have the right to select an attending physician to provide medical care that the Office of Workers Compensation Programs (OWCP) authorizes.

• Disability

Any of these employees who are temporarily or permanently disabled due to a work-related injury or occupational disease are entitled to receive two-thirds (66 2/3 %) of their average weekly wage.

• Death

The dependents of these employees are awarded benefits if a work-related injury results in the employee’s death.

DETAILS OF THE ACT

NFIA provides that USL&HWCA applies with respect to disability or death of any civilian employee of any instrumentality described in the Act that results from an injury listed in the Act. This is subject to the following provisions:

• Employees can be employed within the continental United States.
• Employees can be outside the continental United States, but only if they are United States citizens or permanent residents of the United States or a territory.

• Employer (as determined in USL& HWCA) includes each of the nonappropriated fund instrumentalities the Act defines and describes.
• Only certain portions of USL&HWCA (as amended) apply to this Act.
• The Secretary of Labor is authorized to extend compensation districts as USL&HWCA establishes. It is also authorized to establish new districts to include areas outside the continental limits of the United States. In addition, the Secretary is also authorized to assign each such district one or more deputy commissioners as it determines to be advisable.

Judicial proceedings under USL&HWCA concerning any injury or death that occurs outside the United States are instituted in the district court within the territorial jurisdiction within the office of the deputy commissioner that has jurisdiction with respect to the injury or death. This condition also applies to the United States District Court for the District of Columbia if that district has such an office.

Disability or death may result from injury to an employee who is not a citizen, or a permanent resident of the United States or a territory as USL&HWCA defines and that employee may be employed outside the continental limits of the United States by any nonappropriated fund instrumentality the Act defines. In that case, compensation is provided according to regulations that the Secretary of the military department involved prescribes. Either the Secretary of Defense must approve the regulations or the Secretary of the Treasury must prescribe them. This Act (and any related policy issues) does not include or apply to any of these employees. Their death or injury benefit is paid based on decisions of the Secretary of Defense.

The Act determines the liability of the United States or of any nonappropriated fund instrumentality described in the Act with respect to disability or death that results from an injury to an employee as USL&HWCA defines. This liability is exclusive. It replaces all other liability of the United States or the affected instrumentality to the employee, the employee's legal representatives, spouse, dependents, relatives, and any other person otherwise entitled to recover damages from the United States or the designated nonappropriated fund instrumentality. This is on account of any such disability or death in any direct judicial proceeding, in a civil action, in admiralty law, or by any administrative or judicial proceeding under any workers compensation law or federal tort liability statute.

HOW TO COVER WORKERS UNDER THE ACT

WC 00 01 08 A–Nonappropriated Fund Instrumentalities Act Coverage Endorsement must be attached to
WC 00 00 00 C–Workers Compensation and Employers Liability Insurance Policy in order for coverage to apply. It provides workers compensation insurance and employers liability insurance for work subject to the Nonappropriated Fund Instrumentalities Act extension of the USL&HWCA .The location and type of work done must be described on the endorsement schedule or on the policy Information Page. It replaces policy General Section C., Workers Compensation Law. It also provides that Part Two–Employers Liability Insurance, C., Exclusion 8 does not apply to work subject to the Nonappropriated Funds Instrumentalities Act.

Note: Even though the Nonappropriated Funds Instrumentalities Act is an extension of the United States Longshore and Harbor Workers' Compensation Act, using WC 00 01 06 A–Longshore and Harbor Workers' Compensation Act Coverage Endorsement does not provide the Nonappropriated Fund Instrumentalities Act coverage. In fact, it actually excludes it.