What Is the FECA Chargeback Year?
The Federal Employees’ Compensation Act (FECA) chargeback year never follows the fiscal or calendar year. Instead, it runs from July 1 to June 30. We now stand at the end of chargeback year 2025 and, on July 1, 2025, agencies will enter chargeback year 2026.
Why Q1 Drives the Biggest FECA Chargeback Savings
Act early, save more. When a workers-comp program returns an employee to work or terminates compensation in the first quarter (July–September), those savings compound over the remaining nine months. The earlier you cut costs, the larger the impact on the total 2026 chargeback.
Cost-Savings Math: Early vs. Late Actions
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First-Quarter Action: An immediate return-to-work in July saves 12 months of payments.
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Third-Quarter Action: The same action in March saves only three months.
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Takeaway: Early victories build momentum and offset later surprises such as retroactive schedule awards or overturned denial
Common Outliers That Raise Costs
Even well-run programs face sudden spikes, including:
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Large schedule awards paid as lump sums into the future.
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Retroactive schedule awards requested after maximum medical improvement.
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Overturned denials that require back pay and medical reimbursements.
Creating first-quarter savings helps buffer these outliers.
Fourth-Quarter Prep: Set Up Q1 Wins
The last months of FECA chargeback year 2025 are the launch pad for year 2026 savings. Therefore, managers should:
- Push open SECOPs and IME exams to completion.
- Issue light-duty or permanent job offers for employees able to return with restrictions.
- Pursue timely terminations when medical evidence shows recovery.
These steps can take weeks or months—start now so results land in July.
Factor in the 2.8 % CPI Increase
On April 1, 2025, OWCP added a 2.8 % Consumer Price Index (CPI) raise to all periodic-roll payments. Because this boost rolls into year 2026, agencies face higher baseline costs they can’t control. Consequently, timely returns-to-work and terminations become even more critical.
Action Checklist for Q1 2026
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Review every open termination or RTW case from year 2025.
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Set weekly targets for job offers, second-opinions, and decision letters.
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Track savings monthly to measure compounding value.
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Report early wins to leadership to reinforce program momentum.
Conclusion: Make Q1 Count
The first quarter of the FECA chargeback year sets the tone for total costs. By acting early, your agency creates compounding savings, cushions outlier expenses, and counters CPI-driven increases. Start now, and the 2026 chargeback report will reflect your proactive strategy.
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