United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

K.M., Appellant 

and 

 

DEPARTMENT OF THE AIR FORCE, 

WESTOVER AIR FORCE BASE, 

Chicopee, MA, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 14-2001 

Issued: November 6, 2015 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

JURISDICTION

On September 17, 2014 appellant filed a timely appeal from a July 9, 2014 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 appellant received a $5,420.74 overpayment of compensation 

for the period November 1, 2008 through October 19, 2013, for which he was not at fault; 

(2) whether the overpayment is subject to waiver of recovery; and (3) whether OWCP properly 

withheld $150.00 from appellant’s continuing compensation payments. 

 1

 Appellant filed a prior appeal with the Board on April 28, 2005, docketed as 05-1145. On July 22, 2005 the 

Board issued an order asking the Director to produce the case record. The Board has not issued a final decision or 

order under Docket No. 05-1145. 

2

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

OWCP accepted that on August 27, 1992 appellant, then a 34-year-old aircraft 

pneudraulic systems mechanic, sustained a back strain, L3-4 and L4-5 disc herniations and 

thoracolumbar radiculitis when he fell at work. It later expanded the claim to accept lumbar 

spina bifida with hydrocephalus, an open vertebral fracture, and herniated C4-5, C5-6, and T8-9 

and T9-10 discs.3

 

Appellant received wage-loss compensation in late 1992, for a recurrence of disability in 

1994, from August 15, 1999 to April 3, 2000, and from November 23, 2003 to June 27, 2005. 

He stopped work again on August 22, 2005 and received wage-loss compensation for total 

disability from December 25, 2005 onward. OWCP did not deduct health or life insurance 

premiums from appellant’s wage-loss compensation. 

Appellant retired from the employing establishment effective March 24, 2008. He 

initially elected to receive retirement benefits through the Office of Personnel Management 

(OPM). The notification of personnel action indicated that appellant was “excluded from life 

insurance coverage by law or reg[ulation].” Appellant then elected to receive compensation 

benefits under FECA effective October 25, 2008. OWCP did not deduct health or life insurance 

premiums from his compensation payments. 

In a letter dated March 18, 2009, the OPM advised OWCP that appellant had elected 

Federal Employees’ Group Life Insurance (FEGLI) and that there had been no reduction for 

postretirement life insurance election, which commenced November 1, 2008. Deduction was to 

be made using code BO, effective November 1, 2008, for basic life insurance and no reduction 

postretirement life insurance. 

In an October 24, 2013 worksheet, OWCP calculated that, for the period November 1, 

2008 through October 19, 2013, appellant received gross compensation of $185,442.24, based on 

his final salary in his date-of-injury position of $33,700.00. It found that it should have deducted 

$699.69 in basic life insurance and $4,721.05 in postretirement basic life insurance premiums, a 

total of $5,420.74. As OWCP had not deducted the premiums, it found that the $5,420.74 

amount constituted an overpayment of compensation for the period November 1, 2008 to 

October 19, 2013. 

By notice dated February 6, 2014, OWCP advised appellant of its preliminary 

determination that he had received a $5,420.74 overpayment of compensation because basic life 

insurance premiums had not been properly deducted from his compensation payments for that 

 3

 Appellant had L3-4 and L4-5 microdiscectomies on March 1, 1993, a repeat L4-5 microdiscectomy on 

September 20, 1994, repeat L3-4 and L4-5 microdiscectomies and an L3-5 posterior lumbar fusion on August 17, 

1999, exploration of the L3-5 fusion and L2-3 posterior decompression and fusion on May 28, 2004, and repairs of a 

postsurgical L2-3 pseudomeningiocele on September 10, 2004 and October 5, 2005. On August 22, 1996 OWCP 

issued a schedule award for six percent impairment of the left leg. On December 8, 2005 it issued a schedule award 

for nine percent impairment of each leg, covering the period February 20, 2005 to February 16, 2006. OWCP issued 

a January 14, 2009 decision adjusting the period of the 2005 schedule award to avoid overlapping a period of 

compensation, but vacated this decision on June 4, 2009, finding that no adjustment was necessary. By decision 

dated December 24, 2009, it denied appellant’s request for reconsideration of the June 4, 2009 decision. 
3

period. It provided a calculation of the overpayment, noting that he was not at fault in its 

creation. OWCP requested that appellant provide financial information within 30 days or 

indicate if he contested the overpayment. 

Appellant requested that OWCP make a decision based on the written evidence. He 

asserted that he had not previously elected life insurance as the employing establishment’s 

personnel office advised him that he was ineligible as he had not been insured for five 

continuous years prior to becoming permanently disabled. Appellant completed an overpayment 

recovery questionnaire with supporting documentation on February 22, 2014, listing monthly 

income of $5,000.00 and total monthly expenses of $3,367.10, including a $1,100.00 mortgage 

payment, $500.00 for food, $400.00 for utilities, $200.00 for clothing, $600.00 for vehicular and 

miscellaneous expenses, and $567.10 for debt repayment. He listed assets of $270.00 in cash 

and bank accounts. 

By decision dated July 9, 2014, OWCP finalized that appellant had received an 

overpayment of compensation in the amount of $5,420.74 for the period November 1, 2008 

through October 19, 2013 as no basic life and postretirement life insurance premiums had been 

properly deducted from his compensation payments. It found that he was not at fault in the 

creation of the overpayment but that the overpayment was not subject to waiver as his income 

exceeded his monthly expenses by $1,632.90.4

 OWCP directed recovery by deducting $150.00 

every 28 days from his continuing compensation payments. It noted that appellant had not 

submitted any evidence from the employing establishment substantiating his allegation that its 

personnel office had advised him he was ineligible for life insurance. 

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.5 The coverage for 

basic life insurance is effective unless waived,6 and premiums for basic and optional life 

coverage are withheld from the employee’s pay.7

 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.8

 Basic insurance coverage shall be continued without cost to an employee who retired 

or began receiving compensation on or before December 31, 1989,9 however, the employee is 

 4

 OWCP accepted all expenses appellant listed, and accepted the $600.00 vehicular and miscellaneous amount as 

stated. 

5

 5 U.S.C. § 8702(a). 

6 Id. at § 8702(b). 

7 Id. at § 8707. 

8 Id. at § 8706. 

9 Id. at § 8707(b)(2). 
4

responsible for payment of premiums for optional life insurance coverage which is accomplished 

by authorizing withholdings from his compensation.10 

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 compensation, so that 

his 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).11 

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.12 Any employee who 

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.13 When an underwithholding 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.14 

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.15 

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.16 

 10 Id. at 8706(b)(3)(B). See Edward J. Shea, 43 ECAB 1022 (1992) (the Board found that the 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 July 1983 through November 1989). 

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

12 5 C.F.R. § 870.504(a)(1). 

13 Id. at 504(b). 

14 5 U.S.C. § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997). 

15 Id. at § 8102(a). 

16 Id. at § 8129 (a). 
5

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 $5,420.74 for the period 

November 1, 2008 through October 19, 2013 

Appellant elected to receive compensation benefits from OWCP instead of retirement 

benefits from OPM effective October 25, 2008. While in compensationer status, appellant 

remained responsible for all insurance benefits, including the premiums for postretirement basic 

life insurance at whatever option appellant had selected.17 He maintained, however, that he did 

not elect life insurance after he retired as the employing establishment advised him he was not 

eligible for coverage. The record does not contain any documentation reflecting appellant’s 

election of the optional postretirement basic life insurance. While OPM notified OWCP by letter 

dated March 18, 2009, that appellant had elected that option, it did not provide documentation of 

that election. OWCP procedures state that the preliminary notice of overpayment must clearly 

set forth the reason for the overpayment and contain a clearly written explanation as to how the 

overpayment was calculated.18 In this case, OWCP simply relied on a statement from OPM and 

placed the burden on appellant to disprove the fact of the overpayment. A claimant is entitled to 

an adequate statement of reasons with respect to any final decision by OWCP.19 

In N.J.,20 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 

form is not in the record. 

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. The case 

will be remanded to OWCP.21 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. 

 17 See supra note 14. 

18 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.4a 

(June 2009). 

19 J.L., Docket No. 14-0194 (issued June 25, 2015). See also L.D., Docket No. 12-1408 (issued April 26, 2013) 

(finding that OWCP did not provide adequate reasons for calculating an overpayment when the record contained no 

worksheets or other specific documentation confirming the amount of compensation received). 

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

21 See generally id. (finding that the information from OPM did not sufficiently establish the date that a 

claimant’s deductions for postretirement basic life began); D.R., Docket No. 13-1531 (issued October 21, 2013) 

(finding that OWCP improperly found that a claimant received dual benefits from OPM and OWCP when the record 

did not contain clear documentation establishing that he received benefits from OPM during the period in question). 
6

CONCLUSION 

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

received an overpayment of compensation in the amount of $5,420.74 for the period

November 1, 2008 through October 19, 2013 because it failed to deduct premiums for the 

optional postretirement basic life insurance.22

ORDER 

IT IS HEREBY ORDERED THAT the July 9, 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: November 6, 2015 

Washington, DC 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 22 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.