United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

A.R., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

New Orleans, LA, Employer 

__________________________________________ 

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Docket No. 14-1681 

Issued: March 3, 2016 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On July 29, 2014 appellant filed a timely appeal from a July 8, 2014 overpayment 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 in the amount of $5,358.52 from June 6, 2010 to May 3, 2014; (2) whether OWCP 

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

directed recovery of the overpayment at the rate of $237.00 per month from appellant’s 

continuing compensation payments. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

Appellant, a 34-year-old mail carrier, injured her lower back while throwing mail onto a 

pouching table on November 27, 1999. She filed a claim for benefits, which OWCP accepted for 

lumbar sprain, generalized anxiety disorder, and thoracic or lumbosacral neuritis/radiculitis. 

Appellant returned to work and missed intermittent periods of work due to her accepted work 

injury. 

By letter dated October 25, 2010, OWCP informed appellant that she was being placed 

on the periodic rolls, effective July 3, 2010 and that it was making deductions for health benefits, 

basic life and optional life Insurance. It commenced payment for temporary total disability 

compensation. 

On March 21, 2013 appellant checked a box in response to Office of Personnel 

Management’s (OPM) July 2, 2012 letter, indicating that she elected to continue receiving 

OWCP compensation benefits under FECA. 

By letter dated June 13, 2013, OPM advised OWCP that appellant was eligible to 

continue receiving coverage under the Federal Employees Group Life Insurance (FEGLI) 

program. It indicated that the premiums were based on the “[n]o reduction” to basic option 

which she elected in choosing her postretirement life insurance, with a “[b]asic” salary of 

$53,102.00; the commencing date for postretirement life insurance deductions was June 4, 2011. 

The letter asked OWCP “please deduct for Code Z51,” with basic and optional coverage to begin 

on OWCP’s commencing date. 

In OWCP pay rate worksheets dated May 14, 2014, it was indicated that appellant had an 

overpayment of $5,358.52 based on the difference between basic and optional life insurance 

premiums, and base salary, postretirement premiums for zero reduction premiums, incorrectly 

deducted from her monthly compensation checks from June 6, 2010 to May 3, 2014. It 

calculated the overpayment by adding the deductions from the following periods: the $16.80 

basic life deduction between June 6, 2010 and May 3, 2014, from which it subtracted $13.80 for 

a total of $3.30, which it multiplied times 51 (28-day) pay periods, for a total of $168.30. 

Regarding optional life insurance, the premium of $57.30 for the period June 6, 2010 to 

January 14, 2012 was established, from which the deducted premium of $46.50 multiplied by 21 

pay periods was subtracted for a total of $226.80; for the period between January 15, 2012 and 

August 24, 2013 the correct premium was found to be $51.30, from which it subtracted $42.50 

for a total of $8.80, which multiplied times 21 pay periods, for a total of $184.80; the optional 

life insurance deduction for the period between August 25, 2013 and May 3, 2014, was 

determined to be $82.40 from which it subtracted $42.50 for a total of $39.90, which it 

multiplied times 9 pay periods, for a total of $226.80 in which it multiplied $4.05 times 14 days, 

for a total of $359.10. This amounted to a total overpayment of $770.70 based on OWCP’s 

failure to make the proper deductions for optional life insurance. 

With regard to the total deductions for postretirement life insurance, OWCP added the 

deductions from the following periods; June 5, 2011 to January 14, 2012, multiplying $113.39 

times 8 pay periods (based on a 28-day pay period), totaling $907.12; and January 15, 2012 to 
3

May 3, 2014, multiplying $117.08 times 30 pay periods (based on a 28-day pay period), totaling 

$3,512.40, for a total overpayment of $4,419.52. Totaling the above calculations, this amounted 

to a total overpayment of $5,358.52 for the period June 6, 2010 to May 3, 2014. 

On June 4, 2014 OWCP issued a preliminary determination that an overpayment had 

occurred in the amount of $5,358.52 from June 6, 2010 to May 3, 2014. It noted that the 

overpayment had occurred because the appropriate life insurance premiums were not deducted 

from appellant’s continuing compensation payments for the period; OWCP further advised that 

she had been found without fault for the creation of the overpayment. OWCP 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. It 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. Appellant did not respond to this determination. 

In a decision dated July 8, 2014, OWCP finalized the preliminary determination 

regarding the overpayment of $5,358.52. It found that appellant was not entitled to waiver 

because she did not complete the attached (Form OWCP-20) overpayment questionnaire and did 

not submit supporting documentation. 

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 

ANALYSIS -- ISSUE 1 

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $5,358.52 from June 6, 2010 to May 3, 2014. In its May 14, 

2014 worksheets, OWCP calculated the amount of overpayment by adding the basic life 

premiums, which were not deducted from her monthly compensation checks between June 6, 

2010 and May 3, 2014 for a total of $168.30; the basic life premiums which were not deducted 

from her monthly compensation checks between June 6, 2010 to May 3, 2014 for a total of 

$770.70; and the postretirement, zero reduction premiums which were not deducted from her 

monthly compensation checks from June 6, 2010 to May 3, 2014 for a total of $4,419.52, in 

accordance with the calculations outlined above. Adding the totals from these periods, it 

 2

 20 C.F.R. §§ 870-73. 

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

calculated a total overpayment of $5,358.52. Based on this determination, OWCP properly 

found that appellant received an overpayment of compensation in the stated amount during that 

period. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129 of FECA provides that an overpayment in compensation shall be recovered 

by OWCP unless 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 

good conscience.4

 Section 10.438 of OWCP’s regulation5 provides that 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 

on an overpayment would defeat the purpose of FECA or be against equity and good 

conscience.6

 Failure to submit the requested information within 30 days of the request shall 

result in denial of waiver.7

 

ANALYSIS -- ISSUE 2 

OWCP determined that appellant was without fault in the creation of the overpayment. 

The fact that appellant was without fault does not preclude OWCP from recovering all or part of 

the overpayment.8 She still bears responsibility for submitting financial information to support a 

request for waiver of the overpayment. As appellant did not respond to OWCP’s June 4, 2014 

preliminary determination and did not submit any financial information, it acted properly finding 

that she was not entitled to waiver under the defeat the purpose of FECA standard. There is no 

evidence of record to support that she met the criteria to qualify for waiver of the recovery of the 

overpayment.9 In absence of the information requested, OWCP properly denied waiver of the 

overpayment.10 

 4

 5 U.S.C. § 8129. 

5

 20 C.F.R. § 10.438(a). 

6

 Recovery of an overpayment will defeat the purpose of FECA if such recovery would cause hardship to a 

currently or formerly entitled beneficiary because: (a) the beneficiary from whom OWCP seeks recovery needs 

substantially all of his or her current income (including compensation benefits) to meet current or ordinary and 

necessary living expenses; and (b) the beneficiary’s assets do not exceed a specified amount as determined by 

OWCP from data furnished by the Bureau of Labor Statistics. Id. at § 10.436. Recovery of an overpayment is 

considered to be against equity and good conscience when an individual who received an overpayment would 

experience severe financial hardship attempting to repay the debt; and when an 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. Id. at § 10.437. 

7 Id. at § 10.438(b). 

8 See George A. Rodriguez, 57 ECAB 224 (2005). 

9 See E.M., Docket No. 07-785 (issued August 17, 2007); 20 C.F.R. § 10.436. 

10 See P.T., Docket No. 14-1403 (issued November 6, 2014). 
5

LEGAL PRECEDENT -- ISSUE 3 

The amount of adjustment of continuing compensation to recover an overpayment lies 

within OWCP’s discretion. The analysis that determines the amount of adjustment is 

substantially the same as that used to determine waiver.11 With regard to the amount withheld 

from appellant’s continuing compensation payments to recover the amount of the overpayment, 

section 10.441(a) of OWCP regulations provide: 

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

payments, the individual shall refund to [OWCP] the amount of the overpayment 

as soon as the error is discovered or his or her attention is called to same. If 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.”12

ANALYSIS -- ISSUE 3 

After determining that appellant was not entitled to waiver of the recovery of the 

overpayment, OWCP found that she could repay the overpayment by withholding $237.00 per 

month from her continuing compensation. As appellant did not provide any argument that this 

amount was not reasonable and would cause her hardship due to her financial circumstances, 

OWCP did not abuse its discretion in determining that repayment of the overpayment could be 

accomplished by withholding $237.00 per month from her continuing compensation. 

CONCLUSION 

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $5,358.52 from June 6, 2010 to May 3, 2014. The Board finds 

that the overpayment occurred because the appropriate life insurance premiums were not 

deducted from her continuing compensation payments during the period. The Board further 

finds that OWCP properly denied waiver of the overpayment, and that it properly directed 

recovery of the overpayment at the rate of $237.00 per month from appellant’s continuing 

compensation payments.13

 11 Howard R. Nahikian, 53 ECAB 406 (2002). 

12 20 C.F.R. § 10.441(a). 

13 The Board notes that appellant submitted additional evidence to the record following OWCP’s July 8, 2014 

decision. The Board’s jurisdiction is limited to a review of evidence which was before OWCP at the time of its final 

review. Id. at § 501(c). 
6

ORDER 

IT IS HEREBY ORDERED THAT the July 8, 2014 decision of the Office of Workers’ 

Compensation Programs is affirmed.14 

Issued: March 3, 2016 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 14 James A. Haynes, Alternate Judge, participated in the preparation of the decision but was no longer a member 

of the Board effective November 16, 2015.