United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.M., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

White Plains, NY, Employer 

__________________________________________ 

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Docket No. 14-1384 

Issued: October 21, 2014 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

PATRICIA HOWARD FITZGERALD, Judge 

MICHAEL E. GROOM, Alternate Judge 

JURISDICTION 

On June 2, 2014 appellant filed a timely appeal of a March 24, 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 to 

consider the merits of the case. 

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $1,702.30 for the period May 1, 2013 through January 11, 2014, for which he was not 

at fault; (2) whether OWCP properly denied waiver of recovery of the overpayment; and 

(3) whether it properly determined to deduct $282.28 every 28 days from appellant’s continuing 

compensation benefits. 

 1

 5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY 

On March 16, 2013 appellant, then a 34-year-old city letter carrier, injured his low back, 

right knee, right shoulder and right elbow. He returned to work on March 16, 2013 and began to 

case the mail for his route which increased the pain to his low back, right shoulder and right 

knee. Appellant also developed pain in his right elbow. On May 30, 2013 OWCP accepted his 

claim for aggravation of a right knee lateral meniscus tear, aggravation of internal derangement 

of the right shoulder, aggravation of right shoulder impingement, aggravation of right elbow 

internal derangement and aggravation of lumbar disc syndrome with radiculopathy.2

 

Appellant received continuation of pay from March 17 through April 30, 2013. He filed 

a claim for wage-loss compensation commencing May 2 through June 14, 2013. OWCP 

authorized compensation benefits in the amount of $3,454.28 for the period May 1 through 

June 1, 2013. It authorized compensation in the amount of $3,022.50 for the period June 2 

through June 29, 2013. On June 21, 2013 OWCP entered appellant on the periodic rolls. It 

advised that his weekly pay rate was $1,013.00, that he was entitled to compensation at the 

augmented rate of 75 percent and that cost-of-living adjustments increased his gross weekly 

compensation to $769.75. OWCP stated that appellant’s initial payment from May 1 through 

June 1, 2013 was $3,473.14 with a deduction of $18.86 for basic life insurance with a net amount 

of $3,454.28. Appellant’s regular payment was calculated to be $3,039.00 less basic life 

insurance of $16.50 for a net amount of $3,022.50. OWCP advised him, “If you have optional 

life insurance and/or health benefits coverage, but no deduction for it is shown above, contact 

this office immediately. You are still responsible for these premiums.” Appellant completed a 

direct deposit sign-up form for his bank on June 7, 2013. He completed a second form on 

September 23, 2013 for his credit union. 

In a letter dated November 19, 2013, the Office of Personnel Management (OPM) stated 

that as a compensationer, appellant was eligible to continue Federal Employees’ Group Life 

Insurance (FEGLI) at the final base salary of $52,292.00 at the basic rate. The postretirement 

election was 75 percent reduction and the commencing date for the postretirement deductions 

was April 21, 2012. Basic and optional coverage premiums began on OWCP’s commencing 

date. 

On November 26, 2013 OWCP determined that appellant should have received 

compensation from November 17 through December 14, 2013 at the weekly pay rate of 

$1,013.00 with a gross amount of $3,039.00 effective September 25, 2013. The net amount of 

compensation was $2,822.83 with no deductions for health or life insurance. 

On January 23, 2014 appellant requested that his health insurance be deducted from his 

periodic rolls as his policy had been cancelled due to nonpayment and his medical bills were 

denied. Beginning on January 12, 2014, OWCP deducted $188.44 for health insurance and 

$16.50 for basic life insurance as well as $89.80 for miscellaneous deductions from appellant’s 

gross compensation of $2,822.83, resulting in net compensation of $2,528.09. 

 2

 In a decision dated February 6, 2013, OWCP terminated appellant’s medical and compensation benefits 

effective February 6, 2013 under claim file number xxxxxx193. 
3

In a telephone memorandum dated January 28, 2014, OWCP noted that appellant’s health 

benefits were deducted under claim file number xxxxxx193, which was terminated effective 

February 6, 2013. It determined that it needed to compute arrears for health benefits from 

May 1, 2013 to January 11, 2014, as basic life insurance had been deducted from May 1, 2013. 

OWCP determined the amount not deducted for health benefits from May 1, 2013 

through January 11, 2014 totaled $1,669.30. It also calculated the amount not paid for life 

insurance benefits from November 17, 2013 through January 11, 2014 of $33.00. OWCP 

determined that appellant received an overpayment of compensation in the amount of $1,702.30 

due to underpayment of health benefits. 

In a preliminary determination dated February 18, 2014, OWCP informed appellant that 

he had received an overpayment in the amount of $1,702.30 because health benefits premiums in 

the amount of $1,669.30 were not deducted from his compensation payments from May 1, 2013 

through January 11, 2014 and basic life insurance premiums in the amount of $33.00 were not 

deducted from November 17, 2013 through January 11, 2014. It found that he was not at fault in 

the creation of the overpayment and provided him with his appeal rights as well as an 

overpayment recovery questionnaire. OWCP noted that in order for it to consider the question of 

waiver or to determine a reasonable method for collection he must complete and submit the 

overpayment recovery questionnaire with supporting financial documents within 30 days. It 

noted that under 20 C.F.R. § 10.438 the failure to submit the requested information within 30 

days would result in the denial of waiver and no further request for waiver shall be considered 

until the requested information is furnished. 

By decision dated March 24, 2014, OWCP determined that appellant received an 

overpayment in the amount of $1,702.30 for the period May 1, 2013 through January 11, 2014 

for which he was not at fault. It found that he did not respond to the preliminary decision. 

OWCP determined to deduct the amount of $282.28 from appellant’s ongoing compensation and 

noted that this amount represented 10 percent of his current gross periodic compensation 

payments. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8102(a) of FECA3 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

 Section 8129(a) of FECA provides, in pertinent part, that when an 

overpayment has been made to an individual under this subchapter 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 an individual is entitled.5

 

 3

 5 U.S.C. §§ 8101-8193. 

4 Id. at § 8102(a). 

5 Id. at § 8129(a). 
4

The regulations of OPM, which administers the Federal Employees’ Health Benefit 

program, provide guidelines for registration, enrollment and continuation of enrollment of 

federal employees. In this connection, 5 C.F.R. § 890.502(a)(1) provides: 

“[A]n employee or annuitant is responsible for payment of the employee or 

annuitant share of the cost of enrollment for every pay period during which the 

enrollment continues. An employee or annuitant incurs an indebtedness due the 

United States in the amount of the proper employee or annuitant withholding 

required for each pay period that health benefit withholdings or direct premium 

payments are not made but during which the enrollment continues.6

” 

In addition, 5 C.F.R. § 890.502(c) provides: 

“An agency that withholds less than the proper health benefits contributions from 

an individual’s pay, annuity or compensation must submit an amount equal to the 

sum of the uncollected contributions and applicable agency contributions required 

under section 8906 of Title 5 United States Code, to OPM for deposit in the 

Employees’ Health Benefits Fund.7

“ 

Under applicable OPM regulations, the employee or annuitant is responsible for payment 

of the employee’s share of the cost of enrollment.8 An agency that withholds less than the proper 

health benefits contribution must submit an amount equal to the sum of the uncollected 

deductions.9 The Board has recognized that, when an underwithholding of health insurance 

premiums is discovered, the entire amount is deemed an overpayment of compensation because 

OWCP must pay the full premium to OPM when the error is discovered.10 

Under the FEGLI, most civilian employees of the Federal Government are eligible to 

participate in basic life insurance and one or more of the options.11 The coverage for basic life 

insurance is effective unless waived12 and the premiums for basic and optional life coverage are 

withheld from the employee’s pay.13 When an underwithholding of life insurance premiums 

occurs, the entire amount is deemed an overpayment because OWCP must pay the full premium 

to OPM upon discovery of the error.14

 6

 5 C.F.R. § 890.502(a)(1). 

7 Id. at § 890.502(c). 

8 Id. at § 890.502(a)(1). 

9 Id. 

10 T.S., Docket No. 08-1604 (issued March 13, 2009); 5 C.F.R. § 890.502. 

11 5 U.S.C. § 8702(a). 

12 Id. at § 8702(b). 

13 Id. at § 8707. 

14 Id. at § 8707(d). See Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997). 
5

ANALYSIS -- ISSUE 1 

OWCP accepted that appellant sustained aggravation of preexisting conditions and 

authorized compensation beginning May 1, 2013. It did not make any deductions for his health 

insurance benefits until January 11, 2014. As noted above appellant is responsible for the 

resulting overpayment as OWCP must reimburse OPM for his health insurance benefits. OWCP 

also failed to make deductions for appellant’s FEGLI beginning on November 17, 2013 through 

January 11, 2014. 

The Board finds that appellant received an overpayment of compensation in the amount 

of $1,702.30. OWCP did not deduct $1,669.30 for health insurance premiums or $33.00 in life 

insurance premiums for the periods as noted. There is no evidence that appellant cancelled his 

health benefits enrollment or basic life insurance. OWCP explained how the overpayment 

occurred and provided this to him with the preliminary notice of overpayment. Appellant did not 

dispute that he received the overpayment or the amount of the overpayment. Thus, the failure to 

deduct health and basic life insurance premiums caused an overpayment of compensation in the 

total amount of $1,702.30.15 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(a) of FECA provides that when an overpayment of compensation occurs 

“because of an error of fact of law,” adjustment or recovery shall be made by decreasing later 

payment to which the individual is entitled.16 The only exception to this requirement that an 

overpayment must be recovered is set forth in section 8129(b): 

“Adjustment or recovery by the United States may not be made when incorrect 

payment has been made to an individual who is without fault and when 

adjustment or recovery would defeat the purpose of FECA or would be against 

equity and good conscience.” 

 Thus, a finding that appellant was without fault is not sufficient, in and of itself, for 

OWCP to waive the overpayment. OWCP must exercise its discretion to determine whether 

recovery of the overpayment would “defeat the purpose of FECA or would be against equity and 

good conscience,” pursuant to the guidelines provided in the implementing federal regulations. 

 Section 10.436 of the implementing regulations17 provide that recovery of an 

overpayment will defeat the purpose of FECA if recovery would cause hardship by depriving a 

presently or formerly entitled beneficiary of income and resources needed for ordinary and 

necessary living expenses and outlines the specific financial circumstances under which recovery 

may be considered to defeat the purpose of FECA. 

 15 E.G., Docket No. 13-989 (issued December 11, 2013). 

16 5 U.S.C. § 8129(a). 

17 20 C.F.R. § 10.436. 
6

Section 10.437 provides that recovery of an overpayment is considered to be against 

equity and good conscience when an individual who received an overpayment would experience 

severe financial hardship attempting to repay the debt and when an individual, in reliance on 

such payments or on notice that such payments would be made, gives up a valuable right or 

changes his or her position for the worse.18 

Section 10.438(a) provides that the individual who received the overpayment is 

responsible for providing information about income, expenses and assets as specified by OWCP, 

as this information is needed to determine whether or not recovery of an overpayment would 

defeat the purpose of FECA or be against equity and good conscience.19 This information would 

also be used to determine the repayment schedule, if necessary. Section 10.438(b) provides that 

failure to submit the requested information within 30 days of the request shall result in denial of 

waiver.20

ANALYSIS -- ISSUE 2 

The Board finds that OWCP properly determined that appellant did not establish 

entitlement to waiver of recovery of the $1,702.30 overpayment under the above-described 

standards. Appellant did not provide a completed overpayment recovery questionnaire or any 

financial information to show that he was entitled to waiver of the overpayment within 30 days 

of the preliminary overpayment determination. Despite being advised by OWCP’s 

February 18, 2014 letter regarding the importance of providing financial information on an 

overpayment recovery questionnaire form, he failed to provide such information or a completed 

form before OWCP’s March 24, 2014 decision. For these reasons, OWCP properly determined 

that appellant did not show that recovery of the overpayment would defeat the purpose of FECA 

or be against equity and good conscience. Therefore, it properly denied waiver of recovery of 

the overpayment.21

LEGAL PRECEDENT -- ISSUE 3 

Section 10.321(a)22 provides that, if an overpayment of compensation has been made to 

one entitled to future payments, proper adjustment shall be made by decreasing subsequent 

payments of compensation, “having due regard to the probable extent of future payments, the 

rate of compensation, the financial circumstances of the individual and any other relevant 

factors, so as to minimize any resulting hardship upon such individual.” When, as in this case, 

an individual fails to provide requested information on income, expenses and assets, OWCP 

should follow minimum collection guidelines, which state in general that government claims 

 18 Id. at § 10.437. 

19 Id. at § 10.438(a). 

20 Id. at § 10.438(b). 

21 S.H., Docket No. 14-421 (issued August 27, 2014). 

22 20 C.F.R. § 10.321(a). 
7

should be collected in full and that, if an installment plan is accepted, the installments should be 

large enough to collect the debt promptly.23

ANALYSIS -- ISSUE 3 

The Board finds that OWCP did not abuse its discretion in following the guidelines in 

this case. OWCP determined that the overpayment should be recovered from appellant’s 

continuing compensation payments at the rate of $282.28 and noted that this amount represented 

10 percent of his current gross periodic compensation payments. In the absence of the financial 

information provided by the overpayment recovery questionnaire, it was left to consider the 

extent of his future compensation payments, the rate of his compensation and minimum 

collection guidelines. OWCP gave due regard to the relevant factors. The Board finds that it 

properly determined that recovery should be made in the amount of $282.28 from appellant’s 

continuing compensation benefits. 

CONCLUSION 

The Board finds that appellant received an overpayment of compensation in the amount 

of for $1,702.30 for the period May 1, 2013 through January 11, 2014, for which he was not at 

fault and that OWCP properly denied waiver of recovery of the overpayment and properly 

determined the rate of recovery of the overpayment from continuing compensation payments. 

 

 23 See Gail M. Roe, 47 ECAB 268 (1995) (when an individual failed to provide the requested information on 

income, expenses and assets, the Board found that OWCP did not abuse its discretion in following minimum 

collection guidelines, which state in general that government claims should be collected in full and that, if an 

installment plan is accepted, the installments should be large enough to collect the debt promptly). 
8

ORDER 

IT IS HEREBY ORDERED THAT the March 24, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: October 21, 2014 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia Howard Fitzgerald, Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board