United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.L., Appellant 

and 

DEPARTMENT OF HOMELAND SECURITY, 

CUSTOMS & BORDER PROTECTION, 

El Paso, TX, Employer 

__________________________________________ 

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Docket No. 16-0778 

Issued: November 2, 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 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On March 8, 2016 appellant filed a timely appeal from a February 19, 2016 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 an overpayment of compensation in the 

amount of $5,860.80, because deductions for life and health insurance premiums were not made 

during the period March 23, 2014 through March 7, 2015; (2) whether OWCP properly denied 

waiver of recovery of the overpayment; and (3) whether OWCP properly determined that the 

 1

 On March 7, 2016 the Board issued an order dismissing appeal as appellant appealed a March 20, 2015 

preliminary overpayment notice, which was not a final adverse decision. Docket No. 16-0197 (issued 

March 7, 2016). 

2

 5 U.S.C. § 8101 et seq. 
2

overpayment should be recovered by withholding $200.00 from appellant’s continuing 

compensation payments. 

FACTUAL HISTORY 

OWCP accepted that on December 15, 2010 appellant, then a 44-year-old customs and 

border patrol officer, was assisting in restraining a subject who kicked him in the chest, ribs, left 

ring finger, and knee. The incident caused internal derangement of the left knee; medial 

meniscus tear, left knee; chondromalacia patellae, left knee; and sprain of the lateral collateral 

ligament, right knee. OWCP paid benefits including left knee surgeries on June 29 and 

November 30, 2011. It also paid appellant compensation for temporary total disability as of 

June 30, 2011 on the periodic rolls. 

By decision dated February 18, 2014, appellant received a schedule award for three 

percent permanent impairment of the left lower extremity. By decision dated February 25, 2014, 

OWCP reduced his wage-loss compensation based on his actual earnings as a clerk with the 

employing establishment, effective August 26, 2013. 

On March 11, 2015 OWCP determined that, from March 23, 2014 through March 7, 

2015, health and life insurance premiums had not been deducted from appellant’s compensation. 

For health insurance premiums, it showed calculations that for the period March 23 to April 5, 

2014 deductions should have been made as follows: (code 312) $15.93 x 14 days = $223.02. 

For the period April 6, 2014 to January 10, 2015: (code 312) $445.94 x 10 (28-day OWCP pay 

cycles) = $4,459.40. For the period January 11 to March 7, 2015: (code 312) $450.46 x 2 

(28-day OWCP pay cycles) = $900.92. The total overpayment for health insurance amounted to 

$5,583.34 ($223.02 + $4,459.40 + $900.92). For basic life insurance premiums, it calculated 

that for the period March 23 to April 5, 2014 the following deductions should have been made: 

$0.79 x 14 days = $11.06. For the period April 6, 2014 to March 7, 2015: $22.20 x 12 (28-day 

OWCP pay cycles) = $266.40. The total overpayment for basic life insurance premiums 

amounted to $277.46 ($11.06 + $266.40). The total overpayment for both health insurance and 

basic life insurance amounted to $5,860.80 ($5,583.34 + $277.46). 

On March 20, 2015 OWCP made a preliminary finding that appellant received an 

overpayment of compensation in the amount of $5,860.80 because health and life insurance 

premium deductions were not made during the period March 23, 2014 to March 7, 2015. It 

found that he was without fault in creating the overpayment because he was not aware, nor could 

he have reasonably been expected to be aware, that OWCP had paid compensation incorrectly. 

OWCP informed appellant of his right to challenge the amount of the overpayment or request a 

waiver of the overpayment by one of three methods including a request for a telephone 

conference, a request for a written review of the record, or a request for a prerecoupment 

hearing. If appellant wished a waiver of recovery of the overpayment, he was specifically 

directed to submit financial information by completing an overpayment recovery questionnaire. 

He was afforded 30 days to submit the requested information. 

By letter postmarked April 20, 2015, appellant requested a prerecoupment hearing before 

an OWCP hearing representative. He contended that he should be granted a waiver as he did not 

know if the Office of Personal Management (OPM) or OWCP was paying the insurance 
3

premiums as his compensation benefits were directly deposited into his bank account. Appellant 

submitted an overpayment recovery questionnaire (Form OWCP-20) that was completed on 

April 20, 2015, along with a detailed list of debts being paid by monthly installments and 

financial documents to verify the amounts. He indicated that he had total monthly income of 

$7,529.00, which was comprised of $4,666.00 from his wife’s income, $2,600.00 from his 

OWCP compensation benefits, and $263.00 from his Department of Veterans Affairs (VA) 

benefits. Appellant also indicated that he had total monthly expenses of $6,300.00, which was 

comprised of $939.00 rent or mortgage, $3,200.00 in food, $500.00 in clothing, $400.00 in 

utilities, and $1,800.00 in miscellaneous household expenses.3

 He reported $60.00 in available 

funds. 

On December 8, 2015 the requested prerecoupment hearing was held telephonically. 

Appellant confirmed that he understood OWCP’s finding regarding the overpayment, that they 

did not deduct for his health and optional life insurance benefits, and indicated that he did not 

disagree that an overpayment existed. He testified that his household financial situation had 

worsened since he completed the overpayment recovery questionnaire on April 20, 2015. 

Appellant confirmed that the income amounts had remained the same, and that his adult son was 

in college and was not working or contributing to the household. It was noted that his 

breakdown of monthly expenses submitted did not equal the amount listed on the form, and he 

indicated that he believed his monthly expenses had increased. Appellant was advised that the 

record would remain open for 30 days so he could submit more current and more correct 

financial information concerning his household monthly expenses. He was also requested to 

provide any asset information regarding any retirement or investment accounts for the 

household. No additional financial information was received post-hearing. 

By decision dated February 19, 2016, an OWCP hearing representative finalized its 

preliminary determination that appellant had received an overpayment of compensation in the 

amount of $5,860.80, for which he was without fault, but that he was not entitled to waiver of 

recovery of the overpayment. It directed that recovery would be made from appellant’s 

continuing compensation in the amount of $200.00 every 28 days until such time as the 

overpayment is collected in full. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8129(a) of FECA provides that when an overpayment has been made to an 

individual under this subchapter 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 an 

individual is entitled.4

OPM, rather than OWCP, has jurisdiction over the matter of health insurance deductions 

from compensation and enrollment under the Federal Employees Health Benefits (FEHB) 

Program.5

 OPM regulations regarding the FEHB Program provide that an employee or annuitant 

 3

 Based on appellant’s reported expenses, his monthly expenses should total $6,839.00. 

4

 5 U.S.C. § 8129. 

5 See Raymond C. Beyer, 50 ECAB 164 (1998). 
4

is responsible for payment of the employee’s share of the cost of enrollment for every pay period 

during which the enrollment continues. In each pay period for which health benefits 

withholdings or direct premium payments are not made, but during which the enrollment of an 

employee or annuitant continues, he or she incurs an indebtedness due the United States in the 

amount of the proper employee withholding required for that pay period.6

 The regulations 

further provide that an employing establishment that withholds less than or none of the proper 

health benefits contributions from an individual’s pay, annuity or compensation must submit an 

amount equal to the sum of the uncollected deductions and any applicable employing 

establishment contributions required under 5 U.S.C. § 8906 to OPM for deposit in the 

Employees Health Benefits Fund.7 The Board has recognized that, when an under withholding 

of health insurance premiums is discovered, the entire amount is deemed an overpayment of 

compensation because OWCP must pay the full premium to OPM when the error is discovered.8

 

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.9

 The coverage for basic life insurance is effective unless waived10 and the premiums for 

basic and optional life coverage are withheld from the employee’s pay.11 While the employee is 

receiving compensation under FECA, deductions for insurance are withheld from the employee’s 

compensation.12 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.13 

ANALYSIS -- ISSUE 1 

Fact of overpayment is established and is not contested. The record reflects that OWCP 

noted it had failed to deduct the amount for health insurance and life insurance premiums for the 

period March 23, 2014 through March 7, 2015. Worksheets were provided of OWCP’s 

calculations, which indicated that for the period March 23, 2014 through March 7, 2015, it had 

failed to deduct $5,583.34 in health insurance and $277.46 in basic life insurance for a total of 

$5,860.80. The Board finds that OWCP properly determined the fact and the amount of 

overpayment as no other probative evidence has been presented.14 

 6

 5 C.F.R. § 890.502(b)(1). 

7 Id. at § 890.502(d); see John Skarbek, 53 ECAB 630 (2002); Jennifer Burch, 48 ECAB 633 (1997). 

8 D.D., Docket No. 14-572 (issued June 9, 2014). 

9

 5 U.S.C. § 8702(a). 

10 Id. at § 8702(b). 

11 Id. at § 8707. 

12 Id. at § 8707(b)(1). 

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

14 See M.N., Docket No. 16-0360 (issued July 5, 2016). 
5

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.15 Waiver of an overpayment is not permitted unless the claimant is without 

fault in creating the overpayment.16 

Section 10.433(a) of OWCP regulations provide that OWCP may consider waiving an 

overpayment only if the individual to whom it was made was not at fault in accepting or creating 

the overpayment.17 According to 20 C.F.R. § 10.436, recovery of an overpayment will defeat the 

purpose of FECA if such recovery would cause hardship to a currently or formerly entitled 

beneficiary because the beneficiary from whom OWCP seeks recovery needs substantially all of 

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

necessary living expenses; and the beneficiary’s assets do not exceed a specified amount as 

determined by OWCP from data furnished by the Bureau of Labor Statistics.18 Recovery of an 

overpayment is considered to be against equity and good conscience under section § 10.437 of 

OWCP regulations when any individual who received an overpayment would experience severe 

financial hardship in attempting to repay the debt.19 Recovery of an overpayment is also 

considered to be against equity and good conscience when any 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.20 

OWCP procedures provide that recovery of an overpayment will defeat the purpose of 

FECA if recovery would cause hardship by depriving a presently or formerly entitled beneficiary 

of income and resources needed for ordinary and necessary living expenses under the criteria set 

out in this section. Recovery would defeat the purpose of FECA if both the individual from 

whom recovery is sought needed substantially all of his or her current income (including FECA 

periodic benefits) to meet current ordinary and necessary living expense, and if the individual’s 

assets did not exceed the resource base of $4,800.00 for an individual or $8,000.00 for an 

individual with a spouse or one dependent, plus $960.00 for each additional dependent. An 

individual is deemed to need substantially all of his or her current income to meet current 

 15 5 U.S.C. § 8129. 

16 Steven R. Cofrancesco, 57 ECAB 662 (2006). 

17 20 C.F.R. § 10.433(a). 

18 Id. at § 10.436. An individual is deemed to need substantially all of his or her monthly income to meet current 

and ordinary living expenses if monthly income does not exceed monthly expenses by more than $50.00. 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. See Federal (FECA) Procedure Manual, Part 6 -- Debt 

Management, Initial Overpayment Actions, Chapter 6.200.6(a) (October 2004); B.F., Docket No. 13-785 (issued 

September 20, 2013). 

19 Id. at § 10.437(a). 

20 Id. at § 10.437(b). 
6

ordinary and necessary living expenses if monthly income does not exceed monthly expenses by 

more than $50.00. In other words, the amount of monthly funds available for debt repayment is 

the difference between current income and adjusted living expenses (i.e., ordinary and necessary 

living expenses plus $50.00). If an individual has disposable current income or assets in excess 

of the allowable amount, a reasonable repayment schedule can be established over a reasonable, 

specified period of time. It is the individual’s burden to submit evidence to show that recovery 

of the overpayment would cause the degree of financial hardship sufficient to justify waiver.21 

Recovery of an overpayment is considered to be against equity and good conscience 

when any individual, in reliance on such payments or on notice that such payments would be 

made, gives up a valuable right or changes his position for the worse.22 Conversion of the 

overpayment into a different form, such as food, consumer goods, real estate, etc., from which 

the claimant derived some benefit, is not to be considered a loss.23 

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.24 

ANALYSIS -- ISSUE 2 

OWCP found that appellant was not at fault in creating the overpayment of compensation 

and thus considered whether he was entitled to waiver of recovery of the overpayment. Waiver 

is only possible if recovery would defeat the purpose of FECA or would be against equity and 

good conscience. In order to establish that repayment of the overpayment would defeat the 

purpose of FECA, appellant must show that he requires substantially all of his income to meet 

current ordinary and necessary living expenses and that his assets do not exceed the established 

limit as determined by OWCP’s procedures.25 

During the prerecoupment hearing, appellant testified that his household financial 

situation had worsened since he completed the overpayment recovery questionnaire form on 

April 20, 2015, but he did not provide any additional updated financial information to support his 

claim. He confirmed that his household income amounts had remained the same. Based on the 

April 20, 2015 overpayment recovery questionnaire and appellant’s testimony, OWCP’s hearing 

representative found that his total monthly income totaled $7,249.44, which included $4,666.00 

 21 B.R., Docket No. 15-1247 (issued October 26, 2015). 

22 Supra note 20. 

23 Supra note 18 at Chapter 6.200.6.b(3) (October 2004). 

24 20 C.F.R. § 10.438(a); Ralph P. Beachum, Sr., 55 ECAB 442 (2004). 

25 Id. at § 10.436. 
7

from his wife’s income, $263.00 VA benefits, and $2,320.44 OWCP benefits.26 The hearing 

representative noted that on April 20, 2015 overpayment recovery questionnaire, his household 

total monthly expenses were incorrectly reported as $6,300.00 as the proper calculation equaled 

$6,839.00.27 The hearing representative found the monthly household income of $7,249.44 

minus the monthly expenses of $6,839.00 exceeded the monthly expenses by more than 

$410.00.28 The hearing representative noted that no assets were reported on the overpayment 

recovery questionnaire, but while appellant had testified that his wife may have a retirement 

account, he did not provide that information post hearing. Based on his reported expenses and 

income, his household income exceeded his expenses by more than $50.00 per month. As 

appellant’s income exceeds expenses by more than $50.00, the Board finds that OWCP properly 

found that recovery of the overpayment would not defeat the purpose of FECA. 

The evidence also does not demonstrate that repayment of the overpayment would be 

against equity and good conscience. Appellant submitted no evidence that he had relied upon the 

incorrect payments to his detriment or that he would experience severe financial hardship 

attempting to repay the debt. Consequently, OWCP properly denied waiver of recovery of the 

overpayment. 

Because appellant has failed to establish that recovery of the overpayment would defeat 

the purpose of FECA or be against equity and good conscience, the Board finds that he has failed 

to show that OWCP abused its discretion by refusing to waive the $5,860.80 overpayment. 

LEGAL PRECEDENT -- ISSUE 3 

The Board’s jurisdiction over recovery of an overpayment is limited to reviewing those 

cases where OWCP seeks recovery from continuing compensation under FECA. Section 

10.441(a) of the 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.”29 

 26 The hearing representative noted that as appellant currently receives $2,141.94 every 28 days, or 13 payments a 

year, $2,141.94 x 13 payments a year equaled $27,845.22, which when divided by 12 months, converted to a 

monthly amount of $2,320.44. 

27 See infra note 4. 

28 The Board notes the accurate figure is $410.44. 

29 20 C.F.R. § 10.441. 
8

ANALYSIS -- ISSUE 3 

OWCP found that the overpayment should be repaid in the amount of $200.00 per month. 

On appeal appellant contends that his compensation benefits are insufficient and he cannot 

provide for his son in college and his two other children, who are in high school. 

OWCP’s procedures provide that, if a claimant is being paid compensation or is due 

accrued benefits, the debt should be recovered as quickly as possible.30 The Board finds that 

OWCP did not abuse its discretion in this matter. OWCP took into consideration the financial 

information submitted by appellant resulting in a monthly surplus of over $410.00 as well as the 

factors set forth in section 10.441(a) of its regulations and found that this method of recovery 

would minimize any resulting hardship on him. Therefore, it properly required repayment of the 

overpayment by deducting $200.00 from his compensation payments every four weeks.31

CONCLUSION 

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

of compensation in the amount of $5,860.80 for the period March 23, 2014 through March 7, 

2015 for which he was without fault, that he was not entitled to waiver of recovery of the 

overpayment, and that the overpayment should be recovered by withholding $200.00 per month 

from his continuing compensation benefits. 

 30 See Frederick Arters, 53 ECAB 397 (2002), citing supra note 18 at Chapter 6.200.4(c)(2) (September 2009). 

31 See P.B., Docket No. 15-1462 (issued February 5, 2016). 
9

ORDER 

IT IS HEREBY ORDERED THAT the February 19, 2016 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: November 2, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board