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                              2022
                              David Kiser, DAB CR6183 (2022)
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David Kiser, DAB CR6183 (2022)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





David Kiser,
Petitioner,

v.

Social Security Administration.
Docket No. C-22-793Decision No. 6183November 4, 2022

        
              
    

      DECISION

For 13 pay periods after Petitioner transferred from a position with the United States Postal Service (USPS) to the Social Security Administration (SSA), SSA neither paid its share of Petitioner’s Federal Employee Health Benefits (FEHB) insurance nor deducted from Petitioner’s pay his share of the cost of that insurance.  SSA ultimately paid its entire share of the cost of Petitioner’s FEHB insurance for all 13 pay periods and notified Petitioner that he owed all of the money that SSA had failed to deduct during those 13 pay periods.  Petitioner requested a hearing to dispute the alleged debt.

In this proceeding, Petitioner questioned the existence of the debt.  Petitioner reasons that, if SSA had paid no money toward his FEHB insurance for 13 pay periods, then Petitioner was effectively uninsured during that time.  Petitioner argues that, if he was not covered by the FEHB insurance, then he should not have to pay his share of the cost of the insurance during those 13 pay periods.  SSA argues in response that applicable regulations required the FEHB insurance to cover him during those 13 pay periods even though payments were not made during those pay periods.

As explained below, I agree with SSA that Petitioner was covered by his FEHB insurance during the first 13 pay periods of employment with SSA.  SSA had the authority to

Page 2

correct Petitioner’s personnel records and to conclude, after making those corrections, that Petitioner owed a debt.  Therefore, Petitioner owes a debt of $2,143.05 to the United States Government.

As also discussed below, I urge SSA and Petitioner to enter into a voluntary agreement as to a mutually acceptable repayment schedule.  If SSA imposes a repayment schedule, Petitioner may request a hearing to dispute it.

Further, I find below that SSA failed to promptly refer Petitioner’s hearing request for the appointment of an administrative law judge.  SSA did not refer the hearing request until after the statutorily required timeframe to issue a decision in Petitioner’s case had already elapsed.  I also find that Petitioner’s argument concerning his debt was not baseless and was not made with the intent to delay SSA’s collection of the debt.  Based on these findings, SSA should not charge Petitioner any interest on his debt during the period of time that SSA failed to refer his hearing request for adjudication.

I.  Procedural History

In a June 13, 2022 letter, SSA informed Petitioner, an SSA employee, that he owed a total of $2,143.05 retroactively for FEHB insurance deductions that SSA had not taken from Petitioner’s pay for 13 pay periods (i.e., pay periods 25 and 26 for 2021 and pay periods 1 through 11 in 2022).  E-Filing System (E-File) Document No. 1a at 1.  The letter stated that up to seven percent of interest would accrue on this debt unless Petitioner paid the full amount within 30 days from the date of the letter.  E-File Document No. 1a at 1.  A document attached to the June 13, 2022 letter, entitled “Right to Hearing,” informed Petitioner that he could request a hearing to dispute the existence of the debt or the amount of the debt by mailing, within 15 days of June 13, 2022,  a written request for hearing to the Director of the Division of Central Accounting and Reporting, Box 47, Baltimore, Maryland 21235.  E-File Document No. 1a at 8.

In a letter, Petitioner requested a hearing in which he asserted that he was not at fault for the overpayment that SSA alleged.  Petitioner indicated that, since Petitioner’s transfer from the USPS to SSA, SSA’s Human Resources made various mistakes related to his leave and benefits.  He stated that the USPS sent his “transfer paperwork 3 times to the SSA . . . I did everything I could to try to get my benefits to transfer over.”  Petitioner asserted that the fault of the overpayment lies with SSA’s Human Resources.  E-File Document No. 1 at 3.

The envelope containing Petitioner’s hearing request was addressed to “Director, DCAR, Security Administration, Box 47, Baltimore, MD 21235” and had a postmark of June 23,

Page 3

2022.  E-File Document No. 1 at 1.  SSA’s Headquarters Mail Services Center received Petitioner’s letter on June 27, 2022.  E-File Document No. 1 at 2; E-File Document No. 3a.

On September 13, 2022, SSA forwarded Petitioner’s hearing request, by email, to the Director of the Civil Remedies Division (CRD).  E-File Document No. 2 at 1.

On September 14, 2022, I issued an Acknowledgment, Prehearing Order, and Notice of Informal Conference or Meeting (Prehearing Order).  In the Prehearing Order, I acknowledged receipt of Petitioner’s hearing request and directed SSA to explain why it took over two months for SSA to forward the hearing request to CRD.  The Prehearing Order also provided a schedule for the submission of arguments and evidence as well as notice that I may hold an informal conference or meeting by either video or audio teleconference on October 25, 2022, if the parties explained why such a conference or meeting was necessary.

On September 16, 2022, SSA filed an explanation as to why it untimely forwarded Petitioner’s hearing request to CRD and, on September 20, 2022, SSA filed a prehearing brief/motion for summary judgment (SSA Br.) and three proposed exhibits (SSA Exs. 1-3).  One of the proposed exhibits was a declaration signed by an SSA witness.  SSA Ex. 3.  On September 26, Petitioner filed a prehearing brief (P. Br.) and five proposed exhibits (P. Exs. 1-5).  One of the proposed exhibits was a written statement from an individual whom Petitioner identified as a witness.  P. Ex. 2.  One exhibit showed that SSA had already commenced collecting Petitioner’s alleged debt.  P. Ex. 5.

On September 27, 2022, I issued an Order in which I:  1) stated the only three issues that I could decide in this case; 2) sealed SSA Exhibits 1 and 2 as well as Petitioner Exhibits 3 and 5; 3) directed SSA to submit documentation showing that Petitioner’s FEHB insurance was in effect during the pay periods at issue in this case and permitted Petitioner to submit additional evidence and argument in response to SSA’s submission; and 4) ordered SSA to cease collecting the alleged debt and to return the improperly collected funds.

On October 6, 2022, SSA filed a supplemental brief (SSA Supp. Br.) and four additional proposed exhibits (SSA Exs. 4-7).  On October 11 and 13, 2022, Petitioner filed a statement (P. Supp. Br.) and a motion for summary judgment (P. MSJ).

In an October 19, 2022 Order, I cancelled the informal conference/meeting scheduled for October 25, 2022, and informed the parties I would render a decision based on the written record.

Page 4

On October 28, 2022, Petitioner submitted two additional exhibits, confusingly marked as Exhibit 1 and Exhibit 2, late because he just received them from the USPS in response to a request he made.  I will refer to them as P. Ex. 1 (Oct. 28) and P. Ex. 2 (Oct. 28).

II.  Issues

As stated in my September 27, 2022 Order, I may only decide the following issues:

1)  Does Petitioner owe a debt to the United States Government (i.e., whether a debt exists);

2)  Does Petitioner owe $2,143.05 to the United States Government (i.e., what is the amount of the debt if a debt exists); and

3)  If there is a repayment schedule that is established other than by written agreement (i.e., SSA imposed a repayment schedule), whether the terms of the repayment schedule are appropriate.

III.  Jurisdiction

The three issues identified above are the only appealable issues regarding a salary overpayment matter.  5 U.S.C. § 5514(a)(2)(D); 20 C.F.R. § 422.810(f)(1)(vii), (h)(4)(ii).

The statute authorizing these proceedings specifies that the head of an agency may appoint an administrative law judge to adjudicate an employee’s appeal of an alleged debt.  *See* 5 U.S.C. § 5514(a)(2); *see also* 20 C.F.R. § 422.810(d) (definition of *Hearing official*), (i)(1).  SSA maintains an interagency agreement under which administrative law judges with CRD adjudicate SSA federal salary overpayment cases.  *See* *Portia L. Pierce*, DAB CR2049 at 5 (2009); *Jan Donsbach*, DAB CR1536 (2006).1

IV.  Admission of Evidence

I admit all of the proposed exhibits into the record, without objection.

I allow Petitioner’s late-filed exhibits (P. Ex. 1 (Oct. 28) and P. Ex. 2 (Oct. 28)) into the record because Petitioner only received them from the USPS on October 26, 2022.  I also seal P. Ex. 2 (Oct. 28) because it contains Petitioner’s social security number.

Page 5

V.  Decision on the Written Record

In the Prehearing Order I scheduled an informal conference/meeting for October 25, 2022.  However, I also directed the parties to state in their prehearing submissions why an informal conference or meeting was necessary to the adjudication of this case.  Prehearing Order at 4.  Although, in their prehearing submissions, the parties each identified a witness to testify in this case and submitted a written declaration/statement for each witness as marked exhibits, neither party explained why an informal conference or meeting was necessary.

In an October 19, 2022 Order, I cancelled the informal conference/meeting scheduled for October 25, 2022, and stated that I would decide this case based on the written record.  I noted that neither party stated in their submissions that an in-person conference/meeting was necessary, both parties sought summary judgment, and Petitioner explicitly requested a “decision on the record that the debt is not valid.”  October 19, 2022 Order (citing P. Supp. Br. at 2.)  Further, I stated that, based on my review of the record, an oral proceeding was not required because I could resolve the issues in this case based on the documentary exhibits and none of the issues turned on the veracity or credibility of witnesses.  *See*20 C.F.R. § 422.810(h)(3)(ii)-(iii).  Neither party objected to my Order.

VI.  Findings of Fact

Prior to November 21, 2021, Petitioner was employed with the USPS.  While at the USPS, Petitioner was enrolled in the FEHB program.  His specific health plan was the “Standard Option for Self and Family Coverage” through the Government Employees Health Association, Inc. (GEHA).  SSA Ex. 3 ¶ 4.
	Petitioner transferred employment from USPS to SSA.  SSA Ex. 3 ¶ 4.  The USPS indicated that it had deducted money for Petitioner’s FEHB insurance from his salary through November 20, 2021.  SSA Ex. 7.  Effective November 21, 2021, SSA appointed Petitioner to the position of Customer Service Representative (General Schedule grade 6, step 8) in an SSA field office.  SSA Ex. 1 at 1; SSA Ex. 3 ¶ 3.
	The Notification of Personnel Action (SF-50) documenting Petitioner’s appointment to the SSA position indicated, among other things, that “Health Benefits Coverage Continues.”  SSA Ex. 1 at 1.
	USPS did not immediately, upon Petitioner’s transfer to SSA, provide SSA with Petitioner’s FEHB plan enrollment code.  SSA Ex. 3 ¶ 5.  USPS sent an SF-1150Page 6

(Record of Leave Data) to SSA on February 22, 2022, which provided Petitioner’s FEHB insurance plan code (i.e., 315) along with a statement that Petitioner’s share of the premium was “DEDUCTED THROUGH 11/20/2021.”  P. Ex. 1 at 2 (Oct. 28); P. Ex. 2 (Oct. 28).

According to the Earnings and Leave Statement that SSA issued at the end of Petitioner’s first pay period of work with SSA (pay period 25 in 2021), SSA stated:  “Health Benefit Plan Change Processed this Pay Period.”  SSA Ex. 2 at 1.
	According to Earnings and Leave Statements that SSA issued to Petitioner for pay periods 25 and 26 in 2021 and pay periods 1 through 11 in 2022, SSA neither paid its portion of Petitioner’s FEHB plan premium nor deducted any money from Petitioner’s salary for Petitioner’s share of his FEHB plan premium.  SSA Ex. 2.
	Petitioner contacted GEHA, and GEHA informed him that, as of May 12, 2022, Petitioner was “up to date.”  SSA Ex. 6.  On May 16, 2022, Petitioner informed the Operations Supervisor of his field office, who understood Petitioner to be telling him the following:  “According to [Petitioner’s] records, his insurance is current, but his [Earnings and Leave Statement] does not show that he is paying for it.”  SSA Ex. 6.
	SSA inputted Petitioner’s FEHB plan enrollment code (i.e., 315) into SSA’s payroll system on or about May 27, 2022, during pay period 12 of 2022.2  SSA Ex. 3 ¶ 5; SSA Ex. 4.  The code permitted SSA to learn that Petitioner’s bi-weekly premium deduction was $164.85 per pay period.  SSA Ex. 3 ¶ 5.  SSA’s payroll system “generated an overpayment of $2,143.05 for the 13 pay periods from pay period 25 of 2021 through pay period 11 of 2022.”  SSA Ex. 3 ¶ 5.Page 7

According to the Earnings and Leave Statement that SSA issued to Petitioner for pay period 12 of 2022, SSA deducted $164.85 from Petitioner’s pay as his portion of the bi-weekly premium for Petitioner’s FEHB plan and indicated that SSA had paid $6,923.70 for its share of the premium for Petitioner’s FEHB plan.  SSA Ex. 5 at 1.
	According to the Earnings and Leave Statements that SSA issued to Petitioner for pay periods 13 and 14, SSA deducted $164.85 from Petitioner’s pay as his portion of the bi-weekly premium for Petitioner’s FEHB plan and indicated that SSA paid $494.55 for its share of the bi-weekly premium for Petitioner’s FEHB plan.  SSA Ex. 5 at 2-3.
	According to the Earnings and Leave Statement that SSA issued to Petitioner for pay period 15 in 2022:  SSA paid $494.55 for its share of the bi-weekly premium for Petitioner’s FEHB plan; SSA had paid a total of $8,407.35 for the year toward its share of the premium for Petitioner’s FEHB plan; SSA deducted from Petitioner’s pay $164.85 for Petitioner’s bi-weekly share of his FEHB plan premium; SSA had deducted a total of $659.40 for the year toward Petitioner’s share of his FEHB plan; and SSA deducted $206.28 for Petitioner’s FEHB debt, i.e., the money Petitioner owed for FEHB coverage that had not been previously deducted.  SSA Ex. 5 at 4; P. Ex. 5.VII.  Conclusions of Law and Analysis

**Petitioner owes a debt to the United States Government due to a salary overpayment.**As found above, Petitioner was an employee of the USPS through November 20, 2021, at which point he transferred to SSA effective November 21, 2021.  While at USPS, Petitioner was enrolled in the FEHB program.  Specifically, Petitioner had his health insurance coverage through GEHA.  USPS made deductions from Petitioner’s salary for his portion of the GEHA insurance coverage through November 20, 2021.  The SF-50 documenting Petitioner’s transfer to SSA indicated that Petitioner’s FEHB insurance coverage continued.  In mid-May 2022, Petitioner confirmed that GEHA was providing insurance coverage to him.

There is no dispute that, during the first 13 pay periods Petitioner worked for SSA, SSA neither deducted Petitioner’s share of the bi-weekly cost for the GEHA insurance coverage that Petitioner received nor paid SSA’s share of the cost of the insurance. Because of this, Petitioner questions how his GEHA coverage could have continued in

Page 8

effect during those pay periods when neither he nor SSA was not paying for it.  P. Br. at 2; P. Supp. Br. at 1.  Petitioner provides evidence that one of his SSA co-workers, who transferred from another federal agency to SSA, had a similar situation, i.e., SSA failed to make deductions for Kaiser Permanente FEHB insurance after his transfer.  After the co-worker took his children to a medical appointment, he received a bill from Kaiser Permanente for the services because the children were considered uninsured.  P. Ex. 2.  This happened despite the co-worker’s SF-50, documenting his transfer to SSA,  stating that “Health Benefits Coverage Continues.”  P. Ex. 3.

SSA provided a declaration from a Human Resources Specialist, who stated the following:

[Petitioner’s] FEHB enrollment continued without change when he transferred to SSA.  When employees transfer from agency to agency, they may not make changes in their FEHB enrollment until they either have a life changing event or during open season.  [Petitioner] did not have a life changing event (i.e., birth, marriage, divorce, etc.) and did not make an open season change in 2021.

SSA Ex. 3 ¶ 4.  The Human Resources Specialist also stated that there was a delay in obtaining the code from USPS that identified the insurer (GEHA) and the type of insurance plan (standard option for self plus family coverage) Petitioner was enrolled in.  The Specialist went on:

Without the code, SSA could not deduct the proper premiums ($164.85 per pay period) from [Petitioner’s] pay.  [Petitioner’s] FEHB coverage continued uninterrupted despite the fact he was not paying any premiums.

SSA Ex. 3 ¶ 5.

SSA argues that Petitioner’s GEHA insurance coverage continued during the 13 pay periods when neither Petitioner nor SSA was paying for it.  SSA quotes 5 C.F.R. § 890.303(a)(1) that an employee’s FEHB enrollment continues “without change when he or she moves from one employing office to another, without a break in service of more than 3 days, whether the personnel action is designated as a transfer or not.”  SSA Supp. Br. at 2.  SSA also asserts that its documentation (i.e., the SF-50 (SSA Ex. 1) and SF-2810 (SSA Ex. 4)) shows that Petitioner’s FEHB insurance continued from November 21, 2021.  SSA Supp. Br. at 3.  SSA further argues that Petitioner’s own contact with

Page 9

GEHA in May 2022, as memorialized in an email to a supervisor, confirmed that Petitioner was covered by health insurance even though neither Petitioner nor SSA had yet paid for it.  SSA Supp. Br. at 3.  Finally, SSA points out that Petitioner’s co-worker, who was billed by Kaiser Permanente because his insurance had lapsed, brought the situation to SSA’s attention and his insurance was reinstated retroactively back to November 7, 2021, which was the effective date of his appointment with SSA.  SSA Supp. Br. at 5-6; P. Exs. 2-3.

I find SSA’s argument persuasive.  In a previous case, a similar situation occurred as has happened here.

In October 1995, Petitioner accepted a position as an Administrative Law Judge at SSA.  He transferred to SSA from the Department of Veteran's Affairs.  At that time, SSA advised him that his Federal Employee Health Benefits coverage with Blue Cross and Blue Shield (BCBS) would transfer with him.  From the time of his transfer until Spring 2005, all of his health insurance claims with BCBS were processed and allowed.  There is no question or dispute that during this period Petitioner was receiving full health insurance benefits from BCBS.  However, while BCBS continued to cover Petitioner’s medical claims, SSA did not deduct health insurance benefit premiums from his pay.  The error was finally noticed in Spring 2005 and the overpayments were discovered.

*Donsbach*, DAB CR1536.  Therefore, the facts stated in the *Donsbach* case confirm that FEHB insurance coverage continues when an employee transfers to SSA, even if SSA does not deduct payments from his or her pay for the insurance coverage.  In *Donsbach*, this was true even when payments were not deducted for nearly a decade.  The relevant regulations also support this contention.

Congress established the FEHB program by statute, which permits federal employees to enroll in health benefit plans established under that statute.  5 U.S.C. §§ 8903, 8905(a).  Congress authorized the United States Office of Personnel Management (OPM) to promulgate regulations to implement the statute establishing the FEHB program.  5 U.S.C. § 8913.

As SSA asserts, OPM promulgated a regulation that requires FEHB insurance coverage elected by an employee to continue if the employee transfers to another position in the

Page 10

federal government without a break in service of more than three days.  5 C.F.R. § 890.303(a)(1).  Therefore, there is legal authority to conclude that FEHB insurance cannot be terminated simply because an employee transfers to another agency and an administrative mistake occurs at the time of transfer.

In fact, OPM foresaw the possibility that agencies would make mistakes and not deduct an employee’s share of the FEHB premium.  When this happens, the agency is liable to pay the employee’s share to the Employees Health Benefits Fund within 60 days after the agency concludes there was an “under-deduction.” 5 C.F.R. § 890.502(c).

Despite the agency’s requirement to pay this money quickly to the Employee Health Benefits Fund, OPM regulations also authorize the agency to recover the money from the employee.  “The employing office may make retroactive corrections of administrative errors that occur after December 31, 1994.”  5 C.F.R. § 890.103(a).  These “[r]etroactive corrections are subject to withholdings and contributions under the provisions of § 890.502.”  5 C.F.R. § 890.103(e).  Section 890.502 makes it clear that an agency’s failure to properly withhold the money an employee is to pay for FEHB  insurance coverage creates a debt for the employee.

Employees and annuitants are responsible for paying the enrollee share of the cost of enrollment for every pay period during which they are enrolled.  An employee or annuitant incurs a debt to the United States in the amount of the proper employee or annuitant withholding required for each pay period during which they are enrolled if the appropriate health benefits withholdings or direct premium payments are not made.

5 C.F.R. § 890.502(a)(1).

While it is true that SSA did not deduct the proper FEHB insurance premium from Petitioner’s pay, it is not true that Petitioner was not covered by his FEHB insurance at that time.  The record shows that SSA acted within the authority granted under OPM’s regulations to correct its failure to deduct Petitioner’s share of his FEHB insurance premium during 13 pay periods and to consider the money it needed to collect as a debt.

Page 11

**The amount of Petitioner’s debt is $2,143.05.**The record indicates that Petitioner’s share of the cost of his FEHB insurance with GEHA was $164.85 per pay period.  SSA Ex. 3 ¶ 5; SSA Ex. 5; P. Ex. 5.  Petitioner did not dispute this.

Thirteen pay periods multiplied by $164.85 is $2,143.05.  Therefore, this is the debt Petitioner owes.

**There is no repayment schedule at issue in this case.**A federal employee has the right to dispute the “terms of the repayment schedule” of a debt when an agency imposes a repayment schedule other than by a written agreement between the employee and the agency.  5 U.S.C. § 5514(a)(2)(D).

SSA’s letter informing Petitioner of his debt did not establish a repayment schedule.  *See* E-File Document No. 1a at 1.  Further, in the attachment to the letter entitled “Right to Hearing,” SSA only advised Petitioner that he could request a hearing to dispute the existence and the amount of the debt but did not mention his right to dispute a schedule of payments.  E-File Document No. 1a at 8.
Although SSA improperly initiated collecting $206.28 per pay period from Petitioner’s pay, I ordered that collection terminated and the funds restored to Petitioner.  Therefore, this also does not establish a repayment schedule subject to appeal, unless SSA later recommences this collection effort.

Before imposing a repayment schedule on Petitioner, I urge SSA to attempt to come to an agreement with Petitioner concerning the repayment schedule.  *See* 5 U.S.C. § 5514(a)(2)(C).  The amount of debt in this case is significant in comparison to Petitioner’s salary.  However, if SSA ultimately imposes a repayment schedule on Petitioner, Petitioner may request a hearing seeking review of the terms by an administrative law judge.

**Petitioner’s dispute of the debt in this case was not baseless and Petitioner did not dispute the debt with the intent to delay SSA’s collection activity.**My decision must “includ[e] a determination whether the employee’s petition for hearing was baseless and resulted from an intent to delay the creditor agency’s collection activity.”  20 C.F.R. § 422.810(h)(4)(ii)(B).

Page 12

Based on the record in this case, I conclude that Petitioner’s hearing request was not baseless or intended to delay SSA’s collection activities.  SSA’s letter informing Petitioner of the debt provide no detailed explanation as to the exact circumstances that resulted in Petitioner’s debt.  Further, Petitioner raised a legitimate argument as to whether he was insured during the period of time that neither Petitioner nor SSA paid any money for his FEHB insurance.  It is only because the regulations ensured that he was covered, despite non-payment, that his argument failed.  Petitioner is not a lawyer and cannot have been expected to conduct the legal research necessary to reach this counter-intuitive conclusion.

Further, there is no reason to believe Petitioner intended to delay collection of the debt.  As discussed above, SSA was responsible for the longest delay in this case.  Once this case was docketed, Petitioner made all filings in this case ahead of the deadlines I imposed and, despite his right to do so, did not asked for a delay in the proceedings.

**SSA’s failure to timely refer Petitioner’s hearing request to CRD is not a basis for finding that Petitioner owes no debt.  However, SSA should charge no interest on the debt between the date that SSA received Petitioner’s hearing request and the date SSA referred the hearing request to CRD for adjudication.**SSA received Petitioner’s hearing request on June 27, 2022.  However, SSA did not forward the hearing request to CRD for the appointment of an administrative law judge until September 13, 2022.  In the Prehearing Order, I directed SSA to explain why it took so long for SSA to forward the hearing request to CRD.

In SSA’s September 16, 2022 Late Submission Statement, SSA concedes that it failed to comply with its own regulatory requirement to expeditiously refer Petitioner’s hearing request to CRD for an administrative law judge adjudication.  SSA stated that the failure to do so was inadvertent, unintentional, and not meant to delay the proceedings or harm Petitioner.  SSA explained that there are significant communication and processing gaps (which involves the personnel from the Department of the Interior) concerning salary overpayment cases that led to the delay.

Petitioner seeks summary judgment based on SSA’s failure to promptly refer his hearing request to CRD.  Petitioner asserts that, although SSA counsel provided an explanation as to why it took SSA so long, the SSA employee specifically involved in the incident did not provide a written statement.  P. MSJ at 1.  Petitioner further points out that SSA not only failed to timely refer his hearing request to CRD but also started to deduct money from Petitioner’s pay when the timely filing of the hearing request should have stayed

Page 13

such debt collection efforts.  P. Supp. Br. at 1.  Petitioner asserts that SSA’s actions violate the requirement, in 5 U.S.C. § 5514(a)(2)(D), that a decision be issued within 60 days of the filing of his hearing request.  Petitioner states that, under 20 C.F.R. § 422.810(f)(1)(xiii), only Petitioner can permit a delay in the 60-day deadline for a decision to be issued and not SSA.  Petitioner argues that SSA did not show good cause for its late referral of the hearing request to CRD and that this is grounds for dismissing SSA’s debt collection notice.  P. Supp. Br. at 2; *see* P. MSJ at 1.

Petitioner is correct that the statute and regulations require me to issue a decision in this case within 60 days of SSA’s receipt of Petitioner’s hearing request.  5 U.S.C. § 5514(a)(2)(D); 20 C.F.R. §§ 422.810(f)(1)(xiii) and 422.810(h)(4)(i).  SSA’s regulations specify that “[t]he recipient of an employee’s request for a hearing must forward the request expeditiously to the hearing official to avoid jeopardizing the hearing official’s ability to issue a decision within this 60-day period.”  20 C.F.R. § 422.810(h)(4)(i).  Further, “[t]he timely filing of a petition for hearing shall stay the commencement of collection proceedings.”  5 U.S.C. § 5514(a)(2)(D); *see* 20 C.F.R. § 422.810(f)(1)(xi), (xii).  Once a hearing is requested, deductions cannot commence until after the hearing official issues a decision upholding the debt.  20 C.F.R. § 422.810(*l*)(4).

There is no doubt in this case that SSA failed to expeditiously refer Petitioner’s hearing request to CRD and that SSA’s actions made it impossible for me to adjudicate this case within 60 days of Petitioner’s filing of his hearing request.  Further, SSA improperly began deducting the alleged debt.  Both actions violate a statute and SSA’s own regulations.  However, the amount of delay in this case is insufficient as a legal basis to invalidate a debt owed to the United States Government.  Despite this conclusion, SSA must act to expeditiously reform its system for receiving and forwarding salary overpayment hearing requests for adjudication as well as ensure that the Department of the Interior does not initiate debt collection after receipt of a timely filed hearing request.

Bearing SSA’s failure to comply with federal law in mind, I note that SSA’s letter informing Petitioner of his debt indicated that it would charge Petitioner interest on the debt if Petitioner did not pay the entire debt within 30 days of the date that the June 13, 2022 letter was mailed.  E-File Document No 1a at 1.  The only stated exceptions to the date on which interest was to commence were:  1) the head of SSA or her designee extends the date or 2) the debt is subject to an agreed upon payment schedule.  E-File Document No 1a at 3.

Again, I suggest that the parties to resolve the repayment of Petitioner’s debt through a repayment agreement, which could also resolve the issue of interest.  However, if this is

Page 14

not possible, then waiver of the interest is appropriate.  As found above, SSA delayed these proceedings by over two months when it failed to promptly refer Petitioner’s hearing request to CRD.  Further, I have found that Petitioner’s hearing request was neither baseless nor filed with the intent to delay SSA’s collection of the debt.  As a result, should SSA intend to assess interest on Petitioner commencing on the 31st day from the date of the mailing of the June 13, 2022 letter, SSA should waive the interest that would accrue from the time that SSA received Petitioner’s hearing request until the date SSA referred the hearing request to CRD.  Charging interest during a time-period while SSA was in violation of its own regulations, which in turn caused a violation of a statutory deadline for the adjudication in this case, would be against equity and good conscience and would not be in the best interest of the United States.  *See* 20 C.F.R. § 422.807(g)(2).

VIII.  Conclusion

Petitioner is indebted to the United States Government in the amount of $2,143.05.

This is the final agency decision.  5 U.S.C. § 5514(a)(2)(D).

Endnotes

1 Previous decisions issued by administrative law judges with CRD can be found at:    https://www.hhs.gov/about/agencies/dab/decisions/alj-decisions/index.html

2 SSA’s witness said that SSA did not receive Petitioner’s FEHB plan enrollment code from USPS until May 2022.  SSA Ex. 3 ¶ 5.  However, SSA submitted a Record of Leave Data from the USPS with Petitioner’s FEHB insurance code dated June 15, 2022.  SSA Ex. 7.  This document could not have been the one that SSA used to generate Petitioner’s overpayment because SSA took its action more than two weeks before USPS issued that Record of Leave Data.  *See* SSA Ex. 4.  Therefore, SSA may have obtained the FEHB insurance code from the Record of Leave Data that USPS provided to SSA at the end of February 2022 and failed to input that information until May.  *See* P. Ex. 1 at 2 (Oct. 28); P. Ex. 2 (Oct. 28).  I need not resolve this factual dispute because it does not impact the issues I must decide in this case.
  
          /s/
        Scott Anderson

                      Administrative Law Judge Back to top
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