What happens when a maritime worker loses their life due to a job-related injury? Who ensures their family gets the financial support they need?
Maritime industries employ over 400,000 workers across the U.S., with a fatality rate 4.7 times higher than the national average. Given these risks, the Longshore and Harbor Workers' Compensation Act (LHWCA) provides essential financial protection for maritime workers. It ensures that families receive compensation when a worker loses their life due to a work-related accident or illness.
In this blog, we will cover:
- Who qualifies for LHWCA death benefits
- How benefits are calculated and distributed
- The process of filing a claim
- Legal considerations and employer responsibilities
If you’re in the maritime, oil & gas, or marine construction industry, understanding LHWCA death benefits is crucial. Read on to learn how they work and how you can help ensure the right coverage for your business.
Who is Eligible for LHWCA Death Benefits?
Understanding who qualifies for Longshore and Harbor Workers' Compensation Act (LHWCA) death benefits is critical if your business is involved in the maritime sector. If a worker suffers a fatal injury on the job, the LHWCA ensures that financial support is provided to eligible dependents.
Primary Beneficiaries
LHWCA prioritizes direct family members who were financially dependent on the deceased worker:
- Surviving spouse – Eligible for 50% of the worker’s Average Weekly Wage (AWW) for life or until remarriage.
- Dependent children – Eligible for 16.67% of AWW per child, up to a maximum of 66.67% of AWW when combined with spousal benefits.
Secondary Beneficiaries
If there are no immediate dependents, LHWCA allows other financially dependent family members to claim benefits:
- Parents and grandparents – Must prove financial dependency at the time of the worker’s death.
- Siblings – Eligible if they are financially dependent and meet specific conditions.
When is a Death Considered Compensable?
To qualify for LHWCA death benefits, the worker’s death must be:
- Directly caused by a workplace injury or accident (e.g., fatal fall, equipment failure).
- A result of an occupational illness linked to their job (e.g., asbestosis, chemical exposure).
- An aggravated pre-existing condition that worsened due to workplace duties.
As an employer, ensuring proper maritime employers’ liability coverage is crucial to protect your business from financial and legal risks. Learn more in our article on Maritime Employers’ Liability and Why You Need It.
Understanding eligibility is just the first step. Next, let’s explore how these benefits are calculated and what surviving dependents can expect regarding financial support.
How LHWCA Death Benefits Are Calculated and Distributed
The compensation amount under LHWCA is based on the deceased worker’s Average Weekly Wage (AWW) at the time of death. However, benefits are subject to federal limits. As of October 1, 2024, the National Average Weekly Wage (NAWW) is $999.55, which impacts LHWCA death benefits:
- Maximum weekly compensation: $1,999.10 (200% of NAWW)
- Minimum weekly compensation: $499.78 (50% of NAWW)
Calculation Based on Average Weekly Wage (AWW)
LHWCA death benefits are based on the worker’s Average Weekly Wage (AWW) at the time of death. The formula ensures dependents receive a percentage of the worker’s earnings:
- Surviving spouse: 50% of AWW for life or until remarriage.
- Dependent children: Each child receives 16.67% of AWW.
- Maximum cap: If multiple dependents exist, total benefits cannot exceed 66.67% of AWW.
Example:
If an employee’s AWW was $1,500, the benefits would be:
- Surviving spouse: $750 per week (50% of AWW).
- One child: Additional $250 per week (16.67% of AWW).
- Two or more children: Total capped at $1,000 per week (66.67% of AWW).
How Benefits Are Distributed
The structure of benefit payments depends on the number of dependents:
- If only a spouse is eligible, they receive 50% of AWW.
- If there are children, the total benefit increases but is split accordingly.
- If there are no immediate dependents, benefits may be available to financially dependent parents, grandparents, or siblings (if dependency is proven).
Funeral Expense Coverage
LHWCA also provides compensation for funeral expenses:
- Standard funeral allowance: Up to $3,000 in reimbursement.
- Additional expenses: May be covered in exceptional cases based on specific circumstances.
Not sure if your employees qualify for LHWCA coverage? Our team at TWFG Khan Insurance can help assess your risks and ensure the right protection.
While benefit amounts are determined based on wages, the duration of these payments depends on various factors. Here’s what employers and dependents need to know.
Duration and Conditions for Death Benefit PaymentsUnder the Longshore and Harbor Workers' Compensation Act (LHWCA), death benefits continue only under specific conditions. You must understand how remarriage, age limits, and financial dependency impact the duration of benefits to ensure compliance and avoid legal disputes.
Spousal Benefits
- Lifetime payments: A surviving spouse receives 50% of the worker’s Average Weekly Wage (AWW) for life unless they remarry.
- Remarriage clause: Upon remarriage, the spouse receives a lump sum equal to two years' benefits, after which payments cease.
- Effect of multiple beneficiaries: Unlike state-level compensation laws, a spouse’s benefit amount under LHWCA does not change based on the number of children involved.
Conditions That Impact Child Benefits
- Age restrictions: Benefits terminate when the child turns 18 unless they qualify for an extension.
- Education-based extensions: Payments continue until age 23 if the child remains in a full-time accredited educational program.
- Disability-based lifetime benefits: If a child has a permanent disability that existed before age 18, they receive benefits indefinitely. Medical certification is necessary to confirm their ongoing financial dependency.
Dependency-Based Termination and Adjustments
- Financial dependency reassessments: Secondary beneficiaries (parents, grandparents, or siblings) must prove continued financial dependency if challenged. Employers and insurers often audit claims to prevent fraud or overpayments.
- No automatic cost-of-living adjustments: Unlike some state compensation programs, LHWCA benefits do not increase with inflation or cost-of-living changes unless amended by federal law.
- Termination due to status change: Benefits end if:
- A child discontinues full-time education before age 23.
- A secondary dependent gains financial independence.
- A claimant is found to have misrepresented dependency status.
Claim Disputes and Employer Considerations
- Appeals and legal challenges: If an employer or insurer disputes a dependent’s eligibility, cases are reviewed by the Office of Administrative Law Judges (OALJ). It may also escalate to the Benefits Review Board (BRB).
- Ensuring compliance: Businesses should maintain accurate wage documentation and dependent verification records to avoid prolonged disputes and legal liabilities.
A well-structured LHWCA policy ensures compliance while protecting your business. TWFG Khan Insurance helps companies navigate these complexities with customized coverage solutions tailored for the maritime, oil & gas, and marine construction industries.
Knowing how long benefits last is important, but ensuring they are actually paid out requires a properly filed claim. Let’s break down the claims process step by step.
Filing a Claim for LHWCA Death Benefits
The claim filing process involves strict deadlines, specific documentation, and formal submission procedures. As employers, you must know the following requirements to avoid delays, disputes, or non-compliance penalties.
Filing Deadline: One-Year Rule
- The claim for LHWCA death benefits must be filed within one year from the date of death.
- If the claim is not submitted on time, dependents may lose eligibility for benefits.
- The employer must report the fatality to the Office of Workers' Compensation Programs (OWCP) within 10 days using Form LS-202.
Required Documentation for Filing
A successful claim requires complete and accurate documentation:
- Form LS-262 (Claim for Death Benefits): Must be filled out and submitted by the deceased worker’s dependents.
- Death certificate: To confirm the date and cause of death.
- Proof of employment: Wage records, pay stubs, or tax filings proving the worker’s earnings and LHWCA-covered employment.
- Medical reports: If the death resulted from an occupational illness or pre-existing condition aggravated by work.
- Dependency verification: Marriage certificates for spouses, children's birth certificates, and other dependents' financial documents.
Filing Process: Step-by-Step Guide
Employers and dependents should follow these steps to ensure a smooth claims process:
- Employer’s Responsibility: Report the worker’s death within 10 days using Form LS-202 and provide dependents with necessary wage records and employment verification.
- Dependent’s Responsibility: File Form LS-262 (Claim for Death Benefits) within one year of the worker’s death. Attach all required documents (death certificate, medical reports, proof of dependency).
You must also consider additional insurance options beyond LHWCA, such as ocean marine liability insurance, which protects against broader maritime risks. Explore your options in our article: Understanding Ocean Marine Liability Insurance Coverage.
In addition to ongoing financial benefits, LHWCA also covers funeral expenses. Here’s what dependents need to know about claiming funeral reimbursement.
Funeral Expense Reimbursement Under LHWCA
You must understand the funeral expense coverage rules to ensure dependents receive timely reimbursement and avoid disputes over claims.
Funeral Expense Coverage Limits
- LHWCA allows reimbursement of up to $3,000 for funeral and burial expenses.
- This amount covers costs such as:
- Funeral service fees
- Transportation of remains
- Burial or cremation costs
- Expenses beyond $3,000 are not covered unless an employer or insurer offers additional benefits through a separate policy.
Filing a Funeral Expense Claim
To claim funeral reimbursement, dependents must:
- Complete and submit Form LS-265 (Claim for Funeral Expenses) to the Office of Workers' Compensation Programs (OWCP).
- Attach the following documents:
- Official funeral home invoices and receipts.
- Proof of payment from the dependent or estate.
- Death certificate confirming the cause of death.
- Submit the claim within one year of the worker’s passing to avoid delays or denials.
Employer’s Role in Funeral Claims
- You must promptly report workplace fatalities to the OWCP using Form LS-202.
- If an insurance provider handles LHWCA claims, you should coordinate with the insurer to ensure timely claim submission.
- You may need to provide wage records, accident reports, or medical documentation to verify eligibility in disputed cases.
Handling Disputes and Denials
- If a funeral expense claim is denied, dependents can request a formal review through the Office of Administrative Law Judges (OALJ).
- Common reasons for denial include:
- Late submission beyond the one-year deadline.
- Insufficient documentation (missing receipts, incorrect payment details).
- Disputed work-related cause of death requiring medical or legal review.
While LHWCA covers many maritime workers, offshore and seafaring workers may be protected under the Jones Act, to understand how these laws differ, read our guide on Understanding The Basics of the Jones Act in Maritime Law.
How You Can Stay Protected from LHWCA Claim Disputes
To minimize legal risks, you should:
- Ensure proper LHWCA coverage: Having the right insurance policy reduces financial exposure.
- Maintain accurate wage and employment records: This prevents disputes over AWW calculations and dependent eligibility.
- Document workplace injuries thoroughly: In case of a contested claim, clear documentation helps resolve disputes efficiently.
- Consult legal professionals when needed: Expert advice can prevent costly errors if facing a complex or disputed claim.
Given the complexities of LHWCA compliance, having the right insurance coverage is critical. This is where TWFG Khan Insurance comes in.
How TWFG Khan Insurance Helps Businesses Stay Protected
Handling LHWCA death benefit claims can be complex, and mistakes in filing, documentation, or compliance can lead to delays, disputes, and financial risks. You need a reliable insurance partner to navigate these challenges efficiently.
At TWFG Khan Insurance, we provide:
- Comprehensive LHWCA coverage tailored to high-risk industries.
- Expert claims support to ensure accurate and timely processing.
- Risk management solutions to help your business stay compliant and avoid penalties.
- Legal and compliance guidance to handle disputes and appeals effectively.
Ensure your business is protected. Get a Quote with Us today!
