United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

D.W., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Coppell, TX, Employer 

__________________________________________ 

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Docket No. 15-0341 

Issued: April 18, 2016 

Appearances: Case Submitted on the Record

Stephen V. Hunt, Esq., for the appellant 

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 3, 2014 appellant, through counsel, filed a timely appeal from an 

October 8, 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. 

ISSUES 

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

overpayment of compensation in the amount of $1,343.80 because OWCP failed to correctly 

withhold premiums for the optional postretirement basic life insurance for the period 

December 29, 2012 to October 19, 2013; (2) whether it properly denied waiver of recovery of the 

overpayment; and (3) whether OWCP properly found that the overpayment should be recovered 

by deducting $285.00 from appellant’s continuing compensation. 

 1

 5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY 

OWCP accepted that on November 6, 2011 appellant, then a 56-year-old maintenance 

mechanic, strained his lower back while lifting mail at work. He stopped work on 

November 7, 2011. OWCP accepted appellant’s claim for sprain of the lumbosacral joint or 

ligament, and thoracic or lumbosacral neuritis or radiculitis. It paid disability compensation. On 

January 25, 2012 appellant was placed on the periodic rolls. 

In a letter dated June 6, 2013, the Office of Personnel Management (OPM), Retirement 

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

Federal Employees’ Group Life Insurance. The final base salary on which appellant’s Life 

Insurance benefit was based was $58,601.00. The elections were listed as “no [r]eduction” for 

postretirement optional basic life insurance and Code E5 for “Basic” and “Option C x 5 no 

reduction”. The commencement date for these deductions was December 29, 2012. 

In an audit conducted by OWCP on November 12, 2013 it was determined that 

appropriate premiums for the postretirement basic life insurance elections, with zero percent 

reduction, had not commenced until October 20, 2013. Appellant had, therefore, received an 

overpayment in the amount of $1,343.80. 

On November 20, 2013 OWCP issued a preliminary determination that appellant had 

received an overpayment of compensation in the amount of $1,343.80 for the period 

December 29, 2012 to October 19, 20132 because OWCP had not withheld appropriate 

premiums for postretirement life insurance. It found that he was without fault in the creation of 

the overpayment and requested that he provide financial information in order to determine his 

eligibility for waiver of recovery of the overpayment.3

 Appellant was advised that if he failed to 

complete the Form OWCP-20 or to submit financial documents in support of waiver within 30 

days, pursuant to 20 C.F.R. § 10.438, waiver would be denied. No additional information was 

received from appellant. 

By decision dated December 23, 2013, OWCP finalized its preliminary determination 

and found that appellant had received an overpayment in the amount of $1,343.80. It denied 

waiver of recovery of the overpayment because OWCP had received no financial documentation 

or a completed overpayment recovery questionnaire upon which to base its decision. OWCP 

determined that it would deduct $285.00 every 28 days from his continuing compensation 

benefits. 

On January 3, 2014 OWCP received appellant’s request for a prerecoupment hearing on 

the issue of fault and overpayment. Appellant believed that the overpayment occurred through 

 2

 In its November 20, 2013 preliminary determination, OWCP incorrectly identified October 29, 2013 as the date 

of the end of the overpayment period instead of October 19, 2013. The correct date was used when calculating the 

overpayment amount. 

3

 OWCP calculated the overpayment by taking the daily premium of $4.56, which should have been deducted, 

and multiplying it by 15 days for the period December 29, 2012 to January 12, 2013, which totaled $68.40. It then 

took the 28-day premium amount of $127.54 and multiplied it by 10 months for the period January 13 to 

October 19, 2013, which totaled $1,275.40, for a total in overpayment of $1,343.80. 
3

no fault of his own and requested a waiver. He contended that he was never informed or notified 

that he was responsible for paying any increased premiums from his OWCP income. 

In a completed overpayment recovery questionnaire form, appellant provided his income, 

expenses, assets, and liabilities. 

Appellant submitted a form dated January 17, 2014 requesting that any postretirement 

optional life insurance coverage be cancelled and in a second form dated January 17, 2014, he 

requested that his life insurance be changed to a 75 percent reduction option (which is the option 

with no cost to the compensationer). 

On January 28, 2014 OWCP vacated the December 23, 2013 overpayment decision as 

appellant’s request for a pre-recoupment hearing had been timely received prior to the 

overpayment decision. 

On July 11, 2014 a pre-recoupment hearing was held. Appellant did not disagree with 

the existence or amount of the overpayment, but contended that he should be entitled to waiver 

due to his financial situation. Counsel for appellant argued that appellant’s lack of income had 

created a hardship, and that denial of waiver would be against equity and good conscience as 

appellant’s wife had suffered from acute illnesses and health conditions that required his 

disability income. Counsel stated that appellant’s condition both physically and emotionally 

would diminish if he did not receive full disability income. He also contended that denial of 

waiver would defeat the purpose of FECA because appellant needed all of his disability income 

to meet ordinary and necessary expenses. 

OWCP’s hearing representative noted that in his overpayment recovery questionnaire 

appellant had reported income of only $2,854.46 but his OWCP disability compensation was 

$3,023.60. He also noted that, although appellant had submitted financial documents and bills, 

there was insufficient evidence to support appellant’s expenses. The hearing representative 

advised appellant that the record would be held open for a period of 30 days to submit an 

updated Form OWCP-20 and documentation of income and expenses. 

In a September 6, 2014 statement, counsel requested that appellant’s overpayment be 

forgiven in its entirety because it occurred through no fault of appellant. He also requested that 

monthly payments be no more than $53.80 in his effort to clear the account without additional 

hardship. 

In a decision dated October 7, 2014, the hearing representative finalized the preliminary 

determination, finding that appellant had received an overpayment in the amount of $1,343.80 

for the period December 29, 2012 to October 19, 2013. She further found that appellant was 

without fault in the creation of the overpayment, but denied waiver of recovery of the 

overpayment. The hearing representative found that although he had listed his financials, he had 

failed to submit the required documentation to support his stated income and expenses as 

requested. She determined that OWCP would deduct $285.00 every 28 days from his continuing 

compensation benefits. 
4

LEGAL PRECEDENT -- ISSUE 1 

Under the Federal Employees’ Group Life Insurance program, most civilian employees 

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

the options.4 The coverage for basic life insurance is effective unless waived,5 and premiums for 

basic and optional life coverage are withheld from the employee’s pay.6 Upon retirement or 

upon separation from the employing establishment or being placed on the periodic FECA 

compensation rolls, an employee may choose to continue basic and optional life insurance 

coverage, in which case the schedule of deductions made will be used to withhold premiums 

from his or her annuity or compensation payments.7 Basic insurance coverage shall be continued 

without cost to an employee who retired or began receiving compensation on or before 

December 31, 1989,8

 however, the employee is responsible for payment of premiums for 

optional life insurance coverage which is accomplished by authorizing withholdings from his 

compensation.9

 

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

compensation under FECA could elect continuous withholdings from his or her compensation, 

so that the 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 

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).10

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, he or she filed an election or waiver that remains in effect.11 Any employee who 

 4

 5 U.S.C. § 8702(a). 

5

 5 U.S.C. § 8702(b). 

6

 5 U.S.C. § 8707. 

7

 5 U.S.C. § 8706. 

8

 5 U.S.C. § 8707(b)(2). 

9

 5 U.S.C. § 8706(b)(3)(B). See Edward J. Shea, 43 ECAB 1022 (1992) (the Board found that claimant received 

an overpayment of compensation where he elected postretirement basic life insurance with no reduction and no 

premiums had been deducted from his compensation from January 3, 1988 to May 6, 1989). See also Glen B. Cox, 

42 ECAB 703 (1991) (the Board found that an overpayment was created due to no deduction of premiums for 

optional life insurance for periods from July 1983 through November 1989). 

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

11 5 C.F.R. 870.504 (a)(1) 
5

does not file a Life Insurance Election with his or 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.12 When an under-withholding of life 

insurance premiums occurs, the entire amount is deemed an overpayment of compensation 

because the Office must pay the full premium to the OPM upon discovery of the error.13 

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.14 

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.15 

ANALYSIS -- ISSUE 1 

The Board finds that the case is not in posture for decision as OWCP has not properly 

determined that an overpayment of $1,343.80 was created from December 29, 2012 to 

October 19, 2013. 

OPM informed OWCP that appellant had elected, as a compensationer, to receive 

optional postretirement basic life insurance benefits, at no reduction, commencing 

December 29, 2012. The record reflects that OWCP failed to make any postretirement insurance 

premium deductions from December 29, 2012 to October 19, 2013. 

The Board finds, however, that the record does not provide any evidence that appellant 

signed a document electing the optional no reduction postretirement basic life insurance benefit. 

This information was provided to OWCP by OPM in a letter, but the record does not contain any 

supporting documentation. While the employing establishment completed a CA-7 form on 

January 17, 2012 indicating that appellant had both basic and optional life insurance, Class E-5, 

the record does not include the form signed by appellant, electing the no reduction option for 

postretirement basic life insurance. The Board has previously found that OWCP must document 

whether and when appellant elected life insurance coverage after retirement.16

In the case N.J.,17 the Board remanded the case to OWCP for further development 

because the evidence was unclear as to why postretirement insurance deduction were made as of 

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

optional postretirement basic life insurance premiums at the no reduction option, as the record 

does not contain a signed election form. It is unclear from the record why OPM informed 

 12 Id. At 504(b). 

13 5 USC § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997). 

14 5 U.S.C. § 8102(a). 

15 Id. at § 8129(a). 

16 J.L., Docket No. 14-1094 (issued June 25, 2015); see also R.W., Docket No. 11-1303 (January 9, 2012). 

17 Docket No. 13-2164 (April 18, 2014). 
6

OWCP that premiums for postretirement basic life insurance at no reduction should have been 

deducted as of December 29, 2012. 

Appellant would be responsible for the additional cost associated with his 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. As the fact 

and amount of overpayment are not clearly established by the record, case will be remanded to 

OWCP. 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.18 

CONCLUSION 

The Board finds that this case is not in posture for decision. 

ORDER 

IT IS HEREBY ORDERED THAT the October 8, 2014 decision of the Office of 

Workers’ Compensation Programs is set aside and this case is remanded to OWCP for further 

proceedings consistent with this opinion. 

Issued: April 18, 2016 

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 

 18 As the issues of fact and amount of overpayment are to be further developed upon return of the case record, the 

issues of waiver and recovery of the overpayment are not in posture for decision at this time. See S.G., Docket No. 

14-769 (issued December 9, 2014); see also J.H., Docket No. 07-656 (issued July 26, 2007).