Many injured postal workers reach a point where staying with USPS no longer makes sense for them personally, even if their OWCP claim is still active. The good news is that leaving does not automatically wipe out your benefits. But the answer is not simple, and one particular benefit – the Schedule Award for permanent impairment – carries real risk depending on your current work status. This post breaks down what happens to each type of OWCP benefit when you resign, so you can make an informed decision.
The Simple Question You’re Asking
You have an accepted OWCP claim. Your condition is ongoing. You are thinking about leaving for a different job, something easier, something that makes more sense for your health long-term. And the question that keeps coming up is: if I walk away from USPS, do I lose everything?
The short answer is no. But the longer answer depends on what kind of benefits you are currently receiving, whether you are on a light duty assignment, and where you are in your recovery. There are three main benefit categories under FECA: medical benefits, wage loss compensation, and the Schedule Award for permanent impairment. Each one behaves differently when you separate from federal employment.
Your Medical Treatment Is Not Going Anywhere
This is the part most people do not realize. Under FECA (5 U.S.C. 8103), OWCP is required to cover all medical services, supplies, and treatment prescribed or recommended by a qualified physician for your accepted condition. There is no time limit on this. There is no dollar cap. As long as your treating physician documents a continuing medical need related to your accepted work injury, OWCP must cover it.
That means physical therapy, steroid injections, specialist visits, medication, all of it continues after you leave USPS. Your employment status has no bearing on OWCP’s obligation to cover treatment for conditions it has already accepted.
So if you are asking whether your treatments stop the moment you resign, the answer is no. If your doctor is treating a condition OWCP has accepted on your claim, that coverage follows you regardless of where you work.
Wage Loss Is a Different Story
Wage loss compensation under FECA pays you when your accepted injury prevents you from working at full capacity. It is paid at 66 2/3 percent of your pay rate if you have no dependents, or 75 percent if you have at least one dependent.
Here is the important distinction: if you are currently working full duty and not receiving any wage loss compensation from OWCP, then resigning from USPS and starting a new job does not immediately affect anything on that front. You were not receiving wage loss to begin with.
The situation gets more complicated if your condition worsens after you leave, or if you later develop periods of disability. At that point, OWCP will look at your earning capacity in your current job, not your old postal salary, when calculating what you are owed. This is called a Loss of Wage-Earning Capacity (LWEC) determination. OWCP uses it to estimate what you can reasonably earn given your current restrictions, and then calculates partial compensation based on the difference between that and your date-of-injury pay rate.
The point is: if disability comes later, your new job’s wage history becomes part of the equation.
The Schedule Award – The Benefit Most People Forget to Protect
Here is where things get more complicated, and where the real risk can live if you are not careful.
A Schedule Award compensates you for permanent loss or loss of use of a specific body part or function – a shoulder, a back, a limb – even if you never go off work and never have surgery. It is available under 5 U.S.C. 8107, and it is calculated based on a permanent impairment rating completed by your treating physician using the AMA Guides to the Evaluation of Permanent Impairment, Sixth Edition.
You can only request a Schedule Award after you have reached Maximum Medical Improvement (MMI). MMI means your condition has stabilized and is unlikely to improve significantly with further treatment. You are not there yet if your treating physician has not formally documented it. Here is the critical piece: the fact that you have separated from federal employment does not by itself disqualify you from a Schedule Award. OWCP’s own regulations make clear that eligibility for retirement or separation from government service does not eliminate the right to compensation for scheduled permanent impairments. If your condition results in a permanent impairment, you can still file for a Schedule Award after you leave, as long as your treating physician documents it properly and you file the CA-7 claim form for schedule award once you reach MMI.
The Light Duty Variable That Changes Everything
There is one scenario where leaving USPS creates real exposure on both wage loss and the Schedule Award, and that is if you are currently working a formal light duty or limited duty assignment as an accommodation for your work injury.
Under FECA (5 U.S.C. 8106(c)(2)), an injured worker who refuses or abandons a suitable job offer is not entitled to further wage loss compensation. OWCP defines “suitable work” as employment that falls within your documented medical restrictions. If USPS has placed you in a modified position specifically because of your OWCP claim, that position likely qualifies as suitable work under FECA.
If you walk away from that assignment without a valid reason, OWCP can suspend both your wage loss benefits and your Schedule Award eligibility. This is not a minor consequence. The suspension covers compensation for lost wages and the schedule award simultaneously.
If you are on regular full duty, meaning USPS has not formally placed you on a restricted or light duty assignment through your OWCP case, the calculus is different. Leaving a regular position carries far less immediate risk to your OWCP standing.
The question you need to answer honestly before you decide: am I on a formal limited duty or light duty assignment that exists because of my OWCP claim? If yes, talk to an OWCP attorney before you give notice. If no, your situation is less precarious, though you still need to plan carefully around MMI and the Schedule Award.
Before You Walk Out
If you are seriously considering leaving, a few things matter before you do.
First, make sure your medical treatment plan is set with a physician who can continue managing your accepted condition after you leave. You do not lose coverage, but you do need a provider who will keep documenting medical necessity for OWCP.
Second, stay in communication with your treating physician about where you are in your recovery. If there is any chance of a permanent impairment rating, you want that process moving forward. A Schedule Award can be worth a significant amount, and walking away before MMI is established, without a plan in place, can complicate the process unnecessarily.
Third, if your current role is a light duty assignment connected to your OWCP claim, do not leave it without getting legal advice first. The financial consequences of that decision are serious.
Bay Area Rehab and Medical Can Support Your OWCP Claim Through a Job Change
If you are an injured postal worker thinking about leaving USPS and you want to make sure your medical treatment and claim documentation stay on track during that transition, Bay Area Rehab and Medical can help. As an OWCP-credentialed provider, we work directly with OWCP billing and documentation requirements. We can continue treating your accepted condition regardless of your employment status, and we can help ensure your medical records support a Schedule Award evaluation when you reach MMI.
Call our office in Fremont to schedule an appointment, or book online. Do not make a major life decision about your employment without first making sure your OWCP care is fully in place.
*The information provided in this post is for general informational purposes only and does not constitute legal or medical advice. Bay Area Rehab and Medical is a licensed healthcare provider and an OWCP-credentialed clinic. We are not attorneys and do not provide legal representation or legal counsel. OWCP claims involve complex federal regulations that may vary based on your specific circumstances, agency, and injury. Always consult a qualified OWCP attorney or legal representative for guidance on the legal aspects of your claim. For questions about your medical care, treatment options, or how our clinic can support your OWCP case, contact our office directly.*
