United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

R.L., Appellant 

and 

DEPARTMENT OF JUSTICE, FEDERAL 

BUREAU OF PRISONS, FEDERAL 

CORRECTIONAL INSTITUTION -- LA TUNA, 

Anthony, TX, Employer 

__________________________________________ 

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Docket No. 15-0115 

Issued: August 12, 2015 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

COLLEEN DUFFY KIKO, Judge 

JURISDICTION 

On October 21, 2014 appellant filed a timely appeal from a September 18, 2014 merit 

decision of the Office of Workers’ Compensation Programs (OWCP). Pursuant to the Federal 

Employees’ Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has 

jurisdiction over the merits of this case.2

ISSUES 

The issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $6,912.54 because life insurance premiums were 

not properly deducted from appellant’s compensation benefits; (2) whether OWCP properly 

 1

 5 U.S.C. § 8101 et seq. 

2

 The Board notes that appellant has submitted additional evidence on appeal. However, the Board lacks 

jurisdiction to review evidence for the first time on appeal. See 20 C.F.R. § 501.2(c)(1). 
2

denied waiver of the recovery of the overpayment; and (3) whether OWCP properly required 

repayment of the overpayment by deducting $150.00 from each of appellant’s continuing 

compensation payments. 

On appeal, appellant contends that he is suffering from financial hardship and has filed 

for Chapter 13 bankruptcy protection. 

FACTUAL HISTORY 

On April 28, 2003 appellant, then a 45-year-old correctional officer, filed a traumatic 

injury claim alleging that on April 27, 2003, while conducting a routine shakedown of Unit 2, he 

bent down to look under the sinks and that, when he straightened, he felt a twist and sharp pain 

in his lower back and some pain in his legs. On June 18, 2003 OWCP accepted his claim for 

sciatica and radiculitis. Subsequently, it also accepted appellant’s claim for degeneration of the 

lumbar or lumbosacral spine and displacement of the lumbar intervertebral disc. Appellant was 

placed on the periodic rolls. 

On February 11, 2009 appellant completed a form entitled “Continuation of Life 

Insurance Coverage As an Annuitant or Compensationer.” He opted for continuation of basic 

life insurance coverage at the “no reduction” level. Appellant also claimed Option A standard 

optional insurance, Option B insurance at five multiples at the no reduction level, and Option C, 

family optional insurance with one multiple at the no reduction level. 

In a letter dated September 23, 2013, the Office of Personnel Management (OPM) 

informed OWCP that, effective October 1, 2013, appellant cancelled Option B insurance and that 

any excess premiums should be returned to appellant. 

By letter dated June 2, 2014, appellant also requested that postretirement life insurance 

coverage be cancelled effective the next pay period. 

By preliminary determination dated July 30, 2014, OWCP noted that appellant had 

originally opted for postreduction life insurance at the no reduction level but it had not been 

deducted from his compensation payment for the period February 15, 2009 through May 3, 2014. 

It also acknowledged that appellant had cancelled his Option B insurance effective 

October 1, 2013. OWCP calculated that appellant’s refund due to the cancellation of Option B 

insurance was $971.38.3

 It determined that the failure to deduct proper insurance premiums from 

February 15, 2009 to May 3, 2014 was $6,912.54. OWCP found appellant without fault in the 

creation of the overpayment. It provided him with information with regard to the various actions 

he could pursue to contest the finding, as well as forms to be completed with regard to waiver 

and collecting the overpayment. Appellant did not complete these forms or respond to the 

preliminary determination within the 30 days allotted. 

 3

 OWCP found that for the 19 days from October 1 through 29, 2013 appellant was due a refund of $85.88 and for 

the period October 30, 2013 through May 3, 2014, a period of seven 28-day pay periods, appellant was due $126.50 

for a total of $885.50, for a total refund of $971.38. 
3

By decision dated September 18, 2014, OWCP finalized its preliminary determination 

that appellant received an overpayment of compensation in the amount of $6,912.54. It found 

that appellant was not entitled to waiver of recovery of the overpayment, and determined that 

$150.00 will be deducted from future compensation payments until the overpayment is paid. 

LEGAL PRECEDENT 

FECA provides that the United States shall pay compensation for the disability or death 

of an employee resulting from personal injury sustained while in the performance of duty.4

 

When an overpayment has been made to an individual because of an error of fact or law, 

adjustment shall be made under regulations prescribed by the Secretary of Labor by decreasing 

later payments to which the individual is entitled. 

Under the Federal Employees Group Life Insurance Program (FEGLI), most civilian 

employees of the Federal Government are eligible to participate in basic life insurance and one 

or more options.5 The coverage for basic life insurance is effective unless waived6 and the 

premiums for basic and optional life insurance are withheld from the employee’s pay.7 While 

the employee is receiving compensation under FECA, deductions for insurance are withheld 

from the employee’s compensation.8 At separation from the employing establishment, the 

FEGLI insurance will either terminate or be continued under compensationer status. If the 

compensationer choses to continue basic and optional life insurance coverage, the schedule of 

deductions made will be used to withhold premiums from his or her compensation payments.9 

When an under withholding of life insurance premiums occurs, the entire amount is deemed an 

overpayment of compensation because OWCP must pay the full premium to OPM upon 

discovery of the error.10

ANALYSIS 

The Board finds that, although fact of overpayment has been established, the case is not 

in posture for decision regarding the amount of the overpayment of compensation. 

On February 11, 2009 appellant opted for continuation of life insurance coverage, and 

opted for basic life insurance at the no reduction level, standard option insurance, Option B 

optional insurance at five multiples at the no reduction level, and Option C optional insurance at 

one multiple. By letter dated June 2, 2014, he requested that postretirement coverage be 

 4

 5 U.S.C. § 8102(a). 

5 Id. at § 8702(a). 

6 Id. at § 8702(b). 

7 Id. at § 8707. 

8 Id. at 8707(b)(1). 

9 Id. at § 8706(b). 

10 Id. at § 8707(d); see Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997). 
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cancelled effective the next pay period. While in compensationer status, appellant remained 

responsible for all insurance premiums benefits at whatever option appellant had selected.11 An 

overpayment occurred as OWCP failed to properly deduct life insurance premiums from 

February 15, 2009 through May 3, 2014. Accordingly, the Board finds that OWCP properly 

determined that appellant received an overpayment of compensation. 

However, the Board finds that OWCP did not establish the amount of overpayment. 

OWCP did not provide a clearly written explanation indicating how the overpayment was 

calculated. The July 30, 2014 letter explained that appellant was entitled to a refund of $971.38 

that was due to appellant for the period October 1, 2013 through May 3, 2014. OWCP then 

determined that, after a credit is taken for this refund, appellant still received an overpayment of 

$6,912.54. Although it explained that the overpayment occurred due to improper withholding of 

life insurance premiums, it did not provide any explanation as to how it calculated this figure. 

The preliminary decision reads, “Postretirement 0 [percent] reduction owed....” There is nothing 

following those words. The final decision simply states, “The preliminary decision is 

incorporated herein by reference.” OWCP regulations require that a final decision shall contain 

findings of fact and a statement of reasons. As OWCP failed to follow these regulations it 

denied appellant an effective opportunity to present relevant evidence and argument on the 

amount of the overpayment before issuing a final decision on the matter.12 Accordingly, the 

Board will set aside OWCP’s September 18, 2014 decision on the issue of amount and remand 

the case for a new and proper preliminary determination.13

CONCLUSION 

Appellant received an overpayment of compensation as a result of an under withholding 

of premiums for life insurance coverage, but the case is not in posture for decision on the amount 

of this overpayment. OWCP must issue a preliminary determination clearly explaining how it 

calculated the amount. As the new preliminary determination will allow appellant to request 

waiver and present financial information in support thereof, the Board need not address on this 

appeal whether OWCP properly denied waiver or if it properly set the rate of recovery for 

continuing compensation. 

 11 Id., see also J.L., Docket No. 14-1094 (issued June 25, 2015). 

12 20 C.F.R. § 10.126 (2011); Federal (FECA) Procedure Manual, Part 2 -- Debt Management, Initial 

Overpayment Actions, Chapter 6.200(4)(a)(2) (2004). 

13 Rebecca F. Reed, Docket No. 04-2011 (issued March 3, 2005); Vincent E. Washington, 42 ECAB 636, 640 

(1991); Sandra K. Neil, 40 ECAB 924, 927 (1989). 
5

ORDER 

IT IS HEREBY ORDERED THAT the decision of the Office of Workers’ 

Compensation Programs dated September 18, 2014 is affirmed in part as to fact of overpayment 

but set aside as to amount of overpayment. The case is remanded for further action consistent 

with this opinion. 

Issued: August 12, 2015 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board