United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

B.B., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Riverdale, MD, Employer 

__________________________________________ 

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Docket No. 16-0135 

Issued: March 9, 2016 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

COLLEEN DUFFY KIKO, Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On October 29, 2015 appellant filed a timely appeal from a September 9, 2015 merit 

decision of the Office of Workers’ Compensation Programs (OWCP).1

 Pursuant to the Federal 

Employees’ Compensation Act2

 (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 found an overpayment of $515.69 due to 

incorrect life insurance premium deductions from August 9, 2014 to May 2, 2015, and 

(2) whether OWCP properly denied waiver of recovery of the overpayment. 

 1

 Appellant has not appealed an August 6, 2015 OWCP decision denying a schedule award. She did not identify 

this decision, and her arguments on appeal were limited to overpayment of compensation issues. See 20 C.F.R. 

§ 501.3. 

2

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

The case has previously been before the Board. There have been six traumatic injuries to 

appellant’s back accepted by OWCP: a lumbar strain on December 19, 1981 (File No. 

xxxxxx669); acute low back strain, cervical strain, and psychogenic pain disorder on 

December 17, 1985 (File No. xxxxxx047); aggravation of degenerative disc disease C5-6 and 

C6-7 on May 10, 1988 (File No. xxxxxx048), cervical strain, lumbar strain, and herniated C6-7 

disc on November 28, 1988 (File No. xxxxxx412); lumbar strain on June 19, 1999 (File No. 

xxxxxx644) and aggravation of preexisting cervical spine conditions on November 23, 2005 

(File No. xxxxxx891).3

By decision dated November 13, 1985, OWCP found, with respect to the December 19, 

1981 employment injury, that appellant was not entitled to continuing compensation for wageloss or medical benefits after September 9, 1982. It noted that the thermogram was normal and 

previous tests were within normal limits. By decision dated April 19, 2000, OWCP denied merit 

review of the claim. In a decision dated April 12, 2002, the Board affirmed the April 19, 2000 

decision.4

 With respect to the November 13, 1985 decision, OWCP had denied a reconsideration 

request on July 1, 2009. The Board affirmed this decision on June 28, 2010.5 Appellant again 

requested reconsideration of the November 13, 1985 decision, which was denied by OWCP on 

September 4, 2014. By decision dated July 29, 2015, the Board affirmed the September 4, 2014 

decision.6

The record indicates that appellant began receiving wage-loss compensation, pursuant to 

her claims filed from December 17, 1985 through November 28, 1988. As of March 1, 1997, she 

was working four hours and receiving compensation reduced by actual earnings. OWCP 

compensation payments indicate that the pay rate date was November 28, 1988, the date of 

injury for the cervical strain, lumbar strain, and herniated C6-7 disc noted above. The pay rate 

was reported as $560.29 per week. The compensation amount was adjusted to reflect actual 

earnings. 

By decision dated November 22, 2006, the Board affirmed OWCP decisions dated 

May 27 and January 28, 2005, denying a claimed recurrence of disability commencing 

April 2004 causally related to appellant’s cervical condition.7

Appellant was paid compensation from December 19, 2010 to May 10, 2013 pursuant to 

a schedule award. Compensation payments, adjusted for actual earnings, commenced on 

May 11, 2013. The compensation payment for the period May 11 to June 29, 2013 indicated that 

 3

 The master file for these claims is File No. xxxxxx047. 

4

 Docket No. 00-2528 (issued April 12, 2002). 

5

 Docket No. 09-2258 (issued June 28, 2010). 

6

 Docket No. 15-0825 (issued July 29, 2015). 

7

 Docket No. 06-0263 (issued November 22, 2006). 
3

appellant’s current pay rate for the date-of-injury position was $1,010.12, with her having actual 

earnings of $505.06 per week. No deductions were made for life insurance. 

The record indicates that appellant worked four hours on July 23, 2014 and then stopped 

working. OWCP accepted that no work was available and began paying her temporary total 

disability. The employing establishment advised OWCP by letter dated November 7, 2013, that 

appellant’s salary on July 24, 2013 was $53,840.00 per year, and her optional life insurance 

(OLI) code was K0. The employing establishment indicated that it had paid OLI premiums 

through July 24, 2013. A supplemental payment covering the period July 24 to September 20, 

2013 indicated that OLI premiums had been deducted based on a coverage amount of 

$53,839.56. Another supplemental payment covering the period September 21 to December 14, 

2013 indicated that OLI premiums had been deducted based on coverage of $52,526.00. 

As of December 15, 2013, the compensation payments indicated that deductions of 

$62.40 were made for OLI under code K0, with the annual pay rate of $29,135.08. This 

represented the November 28, 1988 compensation pay rate of $560.29 per week. OWCP advised 

appellant by letter dated December 26, 2014 that she would receive compensation on the 

periodic rolls. The OLI deduction was reported as $62.40. 

By letter to OWCP dated March 25, 2015, the Office of Personnel Management (OPM) 

“Retirement Operations Center” indicated that appellant was eligible to continue Federal 

Employees Group Life Insurance (FEGLI) coverage. It reported that the final base salary was 

$55,574.00. The code reported was K0, basic life insurance with 75 percent reduction, and 

option B, two times salary. OPM indicated that premium deductions by OWCP were to 

commence as of August 9, 2014. An OWCP memorandum dated March 25, 2015 indicated that 

OPM had reported that appellant had continued eligibility for postretirement basic life insurance 

(PRBLI) at 75 percent reduction with Option B. The memorandum states that per OPM, the 

PRBLI coverage should begin on August 9, 2014. 

The record indicates that as of May 3, 2015, OWCP began deducting $116.48 for OLI 

from every 28 day payment. The coverage amount was reported as $55,574.00. 

OWCP sent appellant a letter dated August 5, 2015, advising her of a preliminary 

determination that an overpayment of compensation in the amount of $515.69 had been created. 

The preliminary determination notes that information from OPM established the base salary for 

life insurance purposes as $55,574.00 annually. According to OWCP, for the period August 9, 

2014 to May 2, 2015, $595.03 had been deducted for OLI premiums, but it should have deducted 

$1,110.72.8

 Therefore, an overpayment of $515.69 was created. It found that appellant was not 

at fault in creating the overpayment, and an overpayment recovery questionnaire (OWCP-20) 

was enclosed. 

On September 8, 2015 appellant submitted an August 26, 2015 letter. She indicated that 

she had not been notified of a salary change, and inquired as to whether her compensation pay 

 8

 The preliminary determination states that the amount actually deducted was $593.03, but a memorandum in the 

file indicates that $595.03 was deducted from August 9, 2014 to May 2, 2015. 
4

rate should match her salary for life insurance purposes. Appellant also asserted that she had a 

previous overpayment and to repay the current overpayment would be a financial hardship.9

 

By decision dated September 9, 2015, OWCP finalized its determination of a $515.69 

overpayment of compensation. It denied waiver of recovery of the overpayment, finding that 

appellant had not submitted evidence sufficient to warrant waiver. 

LEGAL PRECEDENT -- ISSUE 1 

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

eligible to participate in basic life insurance and one or more of the options.10 The coverage for 

basic life is effective unless waived11 and premiums for basic and optional life coverages are 

withheld from the employee’s pay.12

FECA and its implementing regulations provide that an employee entitled to disability 

compensation benefits may continue his or her basic life insurance coverage without cost under 

certain circumstances13 and may also retain the optional life insurance.14 At separation from the 

employing establishment, the FEGLI insurance will either terminate or be continued under 

“compensationer” status.15 If the compensationer chooses to continue basic and optional life 

insurance coverage, the schedule of deductions made while the compensationer was an employee 

will be used to withhold premiums from his or her compensation payments.16 Thus while 

receiving disability compensation in lieu of retirement benefits, the former employee is 

responsible for all insurance premiums.17 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.18 

 9

 The record includes a December 28, 2012 decision finding an overpayment of $611.25 due to an incorrect pay 

rate. 

10 5 C.F.R. § 870.201. 

11 Id. at § 870.204(a). 

12 Id. at § 870.401(a). 

13 Id. at § 870.701, subpart G. 

14 Id. at § 871.201, subpart B; 8702.201, subpart B; 873.203, subpart B. 

15 Id. at § 870.501. 

16 Id. at § 872.410, subpart D. 

17 Scherri L. Stanley, 53 ECAB 433 (2002). 

18 See James Lloyd Otte, 48 ECAB 334, 337 (1997). 
5

ANALYSIS -- ISSUE 1 

In the present case, the record indicates that the employing establishment had paid 

appellant’s OLI premiums through July 24, 2013. When appellant began receiving wage-loss 

compensation for total disability as of July 24, 2013, OWCP had initially deducted OLI 

premiums based on her current pay rate for the date-of-injury position. The employing 

establishment indicated that the annual salary was $53,849.00 as of July 24, 2013. 

The overpayment in this case has been based on the failure to properly deduct OLI 

premiums from August 9, 2014 to May 2, 2015. There is no indication that appellant disputes 

that OLI premiums should be deducted from her continuing compensation. She had previously 

elected OLI coverage, there is no indication that she waived coverage,19 and there is no dispute 

that during the period August 9, 2014 to May 2, 2015 the OLI deductions were based on 

coverage for a salary of $29,135.08 per year. According to the March 25, 2015 letter from OPM, 

the proper base salary, as of August 9, 2014, was $55,574.00 per year. This is consistent with 

evidence as to appellant’s current salary for the date-of-injury position and there is no contrary 

evidence of record. 

The record therefore supports a finding that the OLI premiums were deducted based on 

an incorrect salary coverage. OWCP calculated that, during the period August 9, 2014 to May 2, 

2015, OLI premiums of $595.03 had been deducted. Using the salary of $55,574.00, it found 

that $1,110.72 should have been deducted. The difference between these amounts represents a 

$515.69 overpayment of compensation. 

On appeal, appellant notes that her pay rate for compensation purposes was not 

$55,574.00, but the date to determine pay rate under FECA is determined by 5 U.S.C. 

§ 8101(4).20 OWCP used a date of November 28, 1988, a date of injury in accord with this 

section. The OLI premiums are based on a current salary, as the benefit is a multiple of that 

salary. For the reasons discussed, OWCP properly found an overpayment of compensation in the 

amount of $515.69 in this case. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(b) of FECA21 provides: “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 

 19 Cf. S.K., Docket No. 15-0511 (issued September 9, 2015) (there was no indication that the claimant had elected 

OLI prior to retirement, and no election form or other documents establishing that she had elected OLI as of the date 

identified by OPM).

20 Monthly, pay means the monthly pay at the time of injury, or the monthly pay at the time disability begins, or 

the monthly pay at the time compensable disability recurs, if the recurrence begins more than six months after the 

injured employee resumes regular full-time employment with the United States, whichever is greater. 5 U.S.C. 

§ 8101(4). 

21 Supra note 2. 
6

good conscience.”22 Since OWCP found that appellant to be without fault in the creation of the 

overpayment, OWCP may only recover the overpayment if recovery would neither defeat the 

purpose of FECA nor be against equity and good conscience. The guidelines for determining 

whether recovery of an overpayment would defeat the purpose of FECA or would be against 

equity and good conscience are set forth in sections 10.434 to 10.437 of Title 20 of the Code of 

Federal Regulations. 

According to section 10.436, recovery of an overpayment would defeat the purpose of 

FECA if recovery would cause hardship because the beneficiary “needs substantially all of his or 

her current income (including compensation benefits) to meet current ordinary and necessary 

living expenses,” and, also, if the beneficiary’s assets do not exceed a specified amount as 

determined by OWCP from data provided by the Bureau of Labor Statistics.23 For waiver of 

recovery under the “defeat the purpose” of FECA standard, appellant must show that he needs 

substantially all of his current income to meet current ordinary and necessary living expenses, 

and that his assets do not exceed the resource base.24 

Section 10.437 provides that recovery of an overpayment would be against equity and 

good conscience if: (a) the overpaid individual would experience severe financial hardship in 

attempting to repay the debt; and (b) the 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. 

With respect to the submission of financial evidence, OWCP’s regulations at 20 C.F.R. 

§ 10.438 provide: 

“(a) 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. 

“(b) Failure to submit the requested information within 30 days of the request 

shall result in denial of waiver, and no further request for waiver shall be 

considered until the requested information is furnished.” 

ANALYSIS -- ISSUE 2 

In the present case, OWCP requested that appellant submit financial information relevant 

to the issue of waiver. It sent her an OWCP-20 form which requests information with respect to 

 22 5 U.S.C. § 8129(b). 

23 OWCP procedures provide that the assets must not exceed a resource base of $4,800.00 for an individual or 

$8,000.00 for an individual with a spouse or dependent plus $960.00 for each additional dependent. Federal (FECA) 

Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.6(a) (June 2009). 

24 See Robert E. Wenholz, 38 ECAB 311 (1986). 
7

income and expenses. As noted above, appellant is responsible for submitting the necessary 

evidence on which OWCP may properly make an informed determination as to entitlement to 

waiver under OWCP procedures. She did not submit the requested financial information. 

Pursuant to 20 C.F.R. § 10.438, OWCP must deny waiver of recovery of the overpayment until 

the requested information is furnished. 

CONCLUSION 

The Board finds that OWCP properly found an overpayment of compensation in the 

amount of $515.69 was created and that waiver of recovery of the overpayment was properly 

denied. 

ORDER 

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

Compensation Programs dated September 9, 2015 is affirmed. 

Issued: March 9, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board