United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

P.T., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Cincinnati, OH, Employer 

__________________________________________ 

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Docket No. 14-1403 

Issued: November 6, 2014 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

PATRICIA HOWARD FITZGERALD, Judge 

MICHAEL E. GROOM, Alternate Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On June 4, 2014 appellant filed a timely appeal from a December 6, 2013 merit decision of 

the Office of Workers’ Compensation Programs (OWCP), which finalized an overpayment of 

compensation. Pursuant to 20 C.F.R. §§ 501.2(c) and 501.3, the Board has jurisdiction over the 

merits of this case. 

ISSUES 

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

amount of $2,404.38, because postretirement life insurance premiums were not deducted from 

her compensation payments from March 24, 2012 to October 19, 2013; and (2) whether OWCP 

properly denied waiver of the overpayment; and (3) whether OWCP properly determined to 

recover the overpayment at the rate of $120.00 from her continuing compensation payments. 

FACTUAL HISTORY 

On August 10, 2011 OWCP accepted that appellant, then a 39-year-old mail processing 

clerk, had employment-related cervical spinal stenosis and degeneration of a cervical 
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intervertebral disc. On May 9 and August 3, 2012 it accepted cellulitis, other specified local 

infection of skin and subcutaneous tissues, streptococcus group A infection, exacerbation of 

thoracic degenerative disc disease, exacerbation of lumbar degenerative disc disease, cervicitis 

and endocervicitis. Appellant last worked for the employing establishment on January 29, 2011. 

She was placed on the periodic rolls and received wage-loss compensation benefits. 

Postretirement life insurance premiums were not deducted from her payments. 

On July 2, 2013 the Office of Personnel Management (OPM) Retirement Operations 

Center, informed OWCP that as a compensationer, appellant was eligible to continue the Federal 

Employees’ Group Life Insurance (FEGLI). The final base salary on which FEGLI was based 

was $53,102.00. The postretirement election was no reduction and the commencement date for 

postretirement deductions was March 24, 2012. OWCP began making deductions as of 

October 20 to November 16, 2013 payment. 

On October 22, 2013 OWCP issued a preliminary determination finding that appellant had 

been overpaid in the amount of $2,404.38, because postretirement life insurance premiums were 

not paid from March 24, 2012 to October 19, 2013. It made a preliminary finding that appellant 

was without fault in creating an overpayment. OWCP calculated the overpayment, noting that 

appellant’s postretirement life insurance premium was $117.08 per pay period. For the period 

March 24, 2012 to October 19, 2013, appellant received $74,921.06 as she did not have the 

postretirement life insurance premiums deducted. OWCP calculated that she should have been 

paid $72,517.36, after the postretirement life insurance premiums were deducted. It subtracted 

$72,517.36 from the amount she received $74,921.06 to determine that she received an 

overpayment in the amount of $2,404.38. OWCP informed appellant of her right to challenge 

the fact or amount of the overpayment or request a waiver of the overpayment. If appellant 

wished a waiver of the overpayment, she was directed to submit financial information by 

completing an overpayment recovery questionnaire. She was afforded 30 days to respond. The 

record reflects that appellant did not respond. 

By decision dated December 6, 2013, OWCP finalized that appellant received an 

overpayment of compensation in the amount of $2,404.38, for which she was not at fault. 

Appellant was not entitled to waiver of recovery of the overpayment. It directed recovery from 

her continuing compensation payments at the rate of $120.00 per month. 

LEGAL PRECEDENT -- ISSUE 1 

Under the Federal Employees’ Group Life Insurance Program (FEGLI),1

 most civilian 

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

or more of the options. The coverage for basic life insurance is effective unless waived and the 

premiums for basic and optional life coverage are withheld from the employee’s pay. At 

separation from the employing establishment, the FEGLI insurance will either terminate or be 

continued under “compensationer’ status. If the compensationer chooses 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. When an underwithholding of life insurance 

 1

 The law governing life insurance for federal employees is found at 5 U.S.C. §§ 8701-8716. 
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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.2

ANALYSIS -- ISSUE 1 

OWCP found that appellant received a $2,404.38 overpayment of compensation because 

postretirement insurance premiums were not deducted from her compensation payments from 

March 24, 2012 to October 19, 2013. 

The record reflects that OPM informed OWCP that the commencement date for the 

postretirement deductions was March 24, 2012. The record reflects that no deductions for 

postretirement life insurance were made until October 20, 2013. OWCP determined that, during 

this period, the amount of deductions for the postretirement basic life insurance should have been 

$2,404.38. The record contains OWCP payment records and worksheets documenting this 

calculation. Appellant did not respond to the preliminary notice or contest the fact or amount of 

the overpayment. The Board finds that she received an overpayment in the amount of $2,404.38. 

LEGAL PRECEDENT -- ISSUE 2 & 3 

Section 8129 of FECA provides that an individual who is without fault in creating or 

accepting an overpayment is still subject to recovery of the overpayment unless adjustment or 

recovery would defeat the purpose of FECA or would be against equity and good conscience.3 

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

waive the overpayment.4 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.5

Recovery of an overpayment will defeat the purpose of FECA if such recovery would 

cause hardship to a currently or formerly entitled beneficiary because the beneficiary from whom 

OWCP seeks recovery needs substantially all of his or her current income, including 

compensation benefits, to meet current ordinary and necessary living expenses, and the 

beneficiary’s assets do not exceed a specified amount as determined by OWCP.6

 Additionally 

 2 Id. at § 8707(d); Keith H. Mapes, 56 ECAB 130 (2004). An underwithholding of premiums results in a twotiered liability: The claimant owes the agency the underwithheld funds, and similarly the agency owes the insurance 

fund/OPM. If this occurs, OWCP must make OPM whole and remit the entire amount of the underwithholding, 

even if the debt is eventually waived. Federal (FECA) Procedure Manual, Part 5 -- Benefit Payments, Life 

Insurance, Chapter 5.401.11.b(2) (August 2004). 

3 Id. at § 8129(b); 20 C.F.R. §§ 10.433, 10.434, 10.436 and 10.437. 

4 James Lloyd Otte, 48 ECAB 334 (19970; see William J. Murphy, 40 ECAB 569 (1989). 

5

 20 C.F.R. §§ 10.434 and 10.437. 

6 Id. at § 10.436(a)(b). For an individual with no eligible dependents the asset base is $4,800.00. The base 

increases to $8,000.00 for an individual with a spouse or one dependent, plus $960.00 for each additional dependent. 

Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 

6.200.6(a)(1)(b) (June 2009). 
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recovery of an overpayment is considered to be against equity and good conscience when any 

individual who received an overpayment would experience severe financial hardship in 

attempting to repay the debt or when any individual, in reliance on such payment or on notice 

that such payments would be made, gives up a valuable right or changes his or her position for 

the worse.7

The individual who received the overpayment is responsible for providing information 

about income, expenses and assets as specified by OWCP. 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. This information will also be used to determine the 

repayment schedule, if necessary.8

When an overpayment has been made to an individual who is entitled to further payments 

and no refund is made, OWCP shall decrease later payments of compensation, taking into 

account 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 hardship.9

ANALYSIS -- ISSUE 2 & 3 

OWCP advised appellant on October 22, 2013 of its preliminary determination of the 

$2,404.38 overpayment and that she was found not at fault in the creation of the overpayment. 

Although appellant was without fault, she nonetheless bears responsibility for providing the 

financial information necessary to support the request for waiver. OWCP properly requested that 

she submit information regarding her income, assets, and expenses by completing a 

questionnaire and providing supporting documentation. However, appellant did not respond to 

the request for financial information or documentation. In the absence of the information 

requested, OWCP could not determine whether or not recovery of the overpayment would defeat 

the purpose of FECA or be against equity and good conscience. Therefore, the Board finds that 

OWCP properly denied waiver of recovery in conformance with its implementing regulations at 

20 C.F.R. § 10.438(b).10

The Board also finds that OWCP properly determined to recover the overpayment at the 

rate of $120.00 from her continuing compensation payments. Appellant did not provide any 

financial information or documentation, as requested. The Board finds that in directing recovery 

of the overpayment from her continuing compensation, OWCP followed its regulations at 20 

C.F.R. § 10.441(a). 

On appeal, appellant argued that, if she was aware the premiums were so high, she would 

have canceled the insurance until her return to work. She stated that the overpayment would 

 7 Id. at § 10.437(a)(b). 

8 Id. at § 10.438(a); Ralph P. Beachum, Sr., 55 ECAB 442 (2004). 

9 Id. at § 10.441(a). 

10 See C.A., Docket No. 14-86 (issued April 14, 2014).
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cause her undue hardship. As noted, the fact that she was without fault in the creation of the 

overpayment is insufficient to warrant waiver of recovery of the overpayment. Appellant must 

demonstrate that recovery would defeat the purpose of FECA or would be against equity and 

good conscience.11 In this case, she failed to provide a Form OWCP-20 or any financial 

information or documentation to establish that recovery of her overpayment would defeat the 

purpose of FECA or be against equity and good conscience. Accordingly, appellant is not 

entitled to waiver of recovery. 

CONCLUSION 

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

$2,404.3, because postretirement life insurance premiums were not deducted from her 

compensation payments from March 24, 2012 to October 19, 2013. The Board also finds that 

OWCP properly denied waiver of the overpayment and properly determined to recover the 

overpayment at the rate of $120.00 from her continuing compensation payments. 

ORDER 

IT IS HEREBY ORDERED THAT the December 6, 2013 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: November 6, 2014 

Washington, DC 

 

 Patricia Howard Fitzgerald, Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board 

 11 See James Lloyd Otte, supra note 4; see William J. Murphy, 40 ECAB 569 (1989); 20 C.F.R. §§ 10.434 and 

10.437.