United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

S.K., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Cincinnati, OH, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 15-0511 

Issued: September 9, 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 December 30, 2014 appellant filed a timely appeal from a merit decision of the Office 

of Workers’ Compensation Programs (OWCP) dated December 18, 2014. 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. 

ISSUES 

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

overpayment in the amount of $2,775.32 from July 2, 2011 to May 4, 2013; (2) whether it 

abused its discretion in denying waiver of the overpayment; (3) whether OWCP properly 

directed recovery of the overpayment by deducting $184.62 from appellant’s continuing 

compensation payments. 

                                                             1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

Appellant, a 41-year-old distribution clerk, filed a Form CA-1 claim for benefits based on 

traumatic injury on February 16, 2010 alleging that she injured her right elbow due to repetitive 

pushing and pulling of mail. She filed a claim for benefits, which OWCP adjudicated as an 

occupational disease claim and accepted for lateral epicondylitis of the right elbow. Appellant 

underwent right elbow surgery on July 6, 2010. She has not returned to work since that date. 

OWCP paid her compensation for temporary total disability compensation as of July 6, 2010. 

On October 26, 2010 OWCP advised appellant of her periodic rolls compensation 

benefits. The amount to be deducted for insurance benefits was noted. Postretirement basic life 

insurance was noted to be deducted in the amount of $0.00. Appellant was advised that if she 

had optional life insurance coverage and no deduction was shown, she should contact OWCP 

immediately. 

In an April 16, 2013 letter from the Office of Personnel Management (OPM) to OWCP, it 

was indicated that as a compensationer appellant was eligible to continue the Federal 

Employees’ Group Life Insurance (FEGLI) coverage with basic insurance code Y1 (Option B, 5 

times salary, no reduction and Option C family, 1 no reduction multiple). It was also noted that 

she had elected postretirement, no reduction beginning July 2, 2011. 

On May 28, 2013 OWCP issued a preliminary determination that an overpayment had 

occurred in the amount of $2,775.32 from July 2, 2011 to May 4, 2013. It noted that the 

overpayment had occurred because the appropriate life insurance premiums had not been 

deducted from her continuing compensation payments during that period. OWCP advised that 

OPM’s April 16, 2013 letter indicated that appellant’s premiums were not being correctly 

collected for optional life insurance postretirement, no reduction, commencing July 2, 2011. As 

a result of this error, appellant had been overpaid for the period July 2, 2011 through May 4, 

2013 in the amount of $2,775.32. 

In an OWCP pay rate worksheet accompanying the notice of overpayment, the amount of 

the overpayment was calculated based on the life insurance premiums not being deducted from 

her monthly compensation checks from July 2, 2011 to May 4, 2013. It calculated the 

overpayment by taking the amount she was paid compensation during this period, $69,914.43, 

and subtracting this from the correct amount of compensation which she should have been paid, 

$67,139.11, for a total overpayment of $2,775.32. OWCP further advised appellant that she had 

been found without fault in the creation of the overpayment. It advised her that if she disagreed 

with the fact or amount of the overpayment she could submit new evidence in support of her 

contention or request a prerecoupment hearing. OWCP further advised appellant that, when she 

was found without fault in the creation of the overpayment, recovery might not be made if it 

could be shown that such recovery would defeat the purpose of the law or would be against 

equity and good conscience. 

On June 6, 2013 appellant requested a prerecoupment hearing and completed the Form 

OWCP-20. She stated that she had a total monthly household income of $2,775.32, plus a social 

security check in the amount of $877.00, which amounted to $3,641.64, and monthly expenses 

totaling $3,429.00. Appellant, however, did not submit complete documentation supporting 

these totals. She requested a prerecoupment hearing for the overpayment, which was held on 

November 13, 2014. At the hearing appellant was advised that she needed to submit additional 
3

documentation from her two most recent billing cycles to confirm her stated expenses in order to 

obtain a waiver of the overpayment. The hearing representative afforded her 30 days to submit 

this additional information. Appellant did not submit any additional information within the 

allotted 30 days. 

By letters dated September 17 and October 9, 2014, appellant was advised by OWCP that 

postretirement basic life insurance benefits had been inadvertently overdeducted after 

January 2012, resulting in an underpayment of compensation benefits in the amount of $285.60. 

In a decision dated December 18, 2014, an OWCP hearing representative finalized the 

preliminary determination regarding the overpayment of $2,775.32 for the period July 2, 2011 

through May 4, 2013. He stated that on April 16, 2013 OPM had informed OWCP that appellant 

was enrolled in FEGLI, with no reduction in postretirement benefits. OWCP was to begin 

withholding premiums for this coverage effective July 2, 2011, but it was unaware of the 

postretirement coverage and therefore under withheld that component of the premium. 

OWCP hearing representative further found that appellant was not eligible for waiver of 

the overpayment, as she had failed to submit the required, requested documentation to support 

her stated income and expenses. He directed recovery of the overpayment by finding that a 

monthly repayment of $200.00 was appropriate, an amount he found which would not cause 

hardship based on her available monthly income. The hearing representative advised that 

conversion of this monthly figure to a 28-day cycle resulted in a periodic withholding of 

$184.62. 

LEGAL PRECEDENT -- ISSUE 1 

Under the FEGLI program, most civilian employees of the Federal Government are 

eligible to participate in basic life insurance with one or more options. The coverage for basic 

life is effective unless waived and premiums for basic and optional life coverage are withheld 

from the employees’ pay. With certain restrictions, insurance benefits continue postretirement. 

Insurance remains in effect until canceled and premiums due are to be deducted from the injured 

employees’ compensation payments.2

 When FEGLI premiums, including postretirement 

insurance premiums are incorrectly withheld, the entire amount of the unpaid premium is 

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

upon discovery of the error.3

 

A 1980 amendment of 5 U.S.C. § 8706(b)(2) provided that an employee receiving 

compensation under FECA could elect continuous withholdings from her compensation, so that 

her life insurance coverage could be continued without reduction. 5 C.F.R. § 870.701 

(December 5, 1980) provided that an eligible employee had the option of choosing no life 

insurance; Option A -- basic coverage (at no additional cost) subject to continuous withholdings 

from compensation payments that would be reduced by two percent a month after age 65 with a 

maximum reduction of 75 percent; Option B -- basic coverage (at an additional premium) subject 

to continuous withholdings from compensation payments that would be reduced by one percent a 

                                                             2

 5 C.F.R. §§ 870-73. 

3 See James Lloyd Otte, 48 ECAB 334, 337 (1997). 
4

month after age 65 with a maximum reduction of 50 percent; or Option C -- basic coverage 

subject to continuous withholdings from compensation payments with no reductions after age 65 

(at a greater premium).4 

Each employee must elect or waive Option A, Option B, and Option C coverage, in a 

manner designated by OPM, within 60 days after becoming eligible unless, during earlier 

employment, she filed an election or waiver that remains in effect. Any employee who does not 

file a Life Insurance Election with her employing office, in a manner designated by OPM, 

specifically electing any type of Optional insurance, is considered to have waived it and does not 

have that type of Optional insurance.5 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.6

 

ANALYSIS -- ISSUE 1 

The Board finds that the case is not in posture for decision regarding whether appellant 

received an overpayment of compensation in the amount of $2,775.32 for the period July 2, 2011 

to May 4, 2013. 

Appellant has received compensation benefits from OWCP since July 6, 2010. While in 

compensationer status, she remained responsible for all insurance benefits, including the 

premiums for postretirement basic life insurance at whatever option appellant had selected. 

While OPM notified OWCP by letter dated April 16, 2013 that appellant had elected the 

postretirement, no reduction option beginning July 2, 2011, it did not provide documentation of 

that election. In this case, the hearing representative simply relied on a statement from OPM and 

placed the burden on appellant to disprove the fact of the overpayment. 

In the N.J. case,7 the Board remanded the case to OWCP for further development because 

the evidence was unclear as to why postretirement optional life insurance premiums had been 

deducted as of a certain date. Similarly in this case the evidence fails to establish the basis for 

the optional postretirement life insurance premiums for the no reduction option as the signed 

election form is not in the record. The Board notes in this regard that when OWCP advised 

appellant of her periodic rolls compensation benefits on October 26, 2010, it was noted that 

postretirement basic life insurance premiums were being deducted in the amount of $0.00. 

Appellant was advised that she should contact OWCP immediately if she did have optional life 

insurance coverage. The record does not reflect that appellant ever advised OWCP that she did 

in fact have optional postretirement life insurance coverage. It is unclear from the record why 

OPM advised OWCP that these optional life insurance premiums should have been collected as 

of July 2, 2011. 

                                                             4 See James J. Conway, Docket No. 04-2047 (issued May 20, 2005). 

5 See J.L., Docket No. 14-1094 (issued June 25, 2015). 

6 Id. 

7

 Docket No. 13-2164 (issued April 18, 2014). 
5

Appellant would be responsible for the additional cost associated with her election of the 

optional postretirement basic life insurance. However, as OWCP has not factually established 

that appellant elected the optional coverage, there can be no finding of overpayment. The case 

will be remanded to OWCP.8

 On remand, OWCP should obtain from OPM the executed 

election form completed by appellant, prior to determining whether appellant received an 

overpayment of compensation. After such further development as OWCP deems necessary, it 

should issue a de novo decision.9 

CONCLUSION 

The Board finds that the case is not in posture for decision regarding whether appellant 

received an overpayment in the amount of $2,775.32 for the period July 2, 2011 to 

May 4, 2013.10

ORDER 

IT IS HEREBY ORDERED THAT the December 18, 2014 decision of the Office of 

Workers’ Compensation Programs is set aside and the case is remanded for further proceedings 

consistent with this opinion of the Board. 

Issued: September 9, 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 

                                                             8 Supra note 5. 

9

 If OWCP verifies the fact of overpayment, it should further review the calculation of the overpayment, given 

that these premiums were previously over deducted, as noted in OWCP’s letters of September 17 and 

October 9, 2014. 

10 In view of the Board’s finding that the case is not in posture for decision regarding whether appellant received 

an overpayment of compensation, it is premature to address the issues of waiver and recovery.