United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

P.W., claiming as widow of D.W., Appellant 

and 

DEPARTMENT OF THE AIR FORCE, 

ELMENDORF AIR FORCE BASE, 

Anchorage, AK, Employer 

__________________________________________ 

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Docket No. 15-0186 

Issued: September 10, 2015 

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 

COLLEEN DUFFY KIKO, Judge 

JURISDICTION 

On October 27, 2014 appellant filed a timely appeal from a September 30, 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 an overpayment of compensation in the 

amount of $3,433.81 for the period November 17, 1999 through July 10, 2003 because OWCP 

failed to deduct premiums for health benefits; (2) whether OWCP properly denied waiver of the 

 1

 The employee died on October 22, 1999. Appellant is the employee’s widow. 

2

 5 U.S.C. § 8101 et seq. 
2

overpayment; and (3) whether it properly found that it would recover the overpayment by 

deducting $230.00 from appellant’s continuing compensation payments. 

FACTUAL HISTORY 

OWCP accepted that on November 26, 1984 the employee, then a 34-year-old boiler 

plant operator, sustained a herniated disc at L5-S1 and thoracolumbar sprain in the performance 

of duty. It paid him compensation for total disability beginning January 3, 1986. OWCP 

deducted premiums for health benefits for the Federal Employee’s Health Benefit (FEHB) plan 

using enrollment code 105. 

The employee died on October 22, 1999 of an oxycodone overdose. On February 20, 

2001 appellant filed a claim for survivor’s benefits. On July 12, 2001 OWCP accepted that the 

employee’s death resulted from his employment injury. In its acceptance letter, it informed 

appellant that if the employee was covered by a health benefits plan with the employing 

establishment, she was eligible for coverage and the benefits would be deducted automatically 

from the survivor benefits. OWCP advised that it was issuing an initial payment of $54,114.67 

covering the period October 23, 1999 to May 19, 2001 and placing her on the periodic rolls for 

continuing payments. Computer worksheets validate, however, that it did not deduct premiums 

for health benefits. 

On March 30, 2005 OWCP completed a notice of change in health benefits enrollment 

(Standard Form 2810) changing appellant’s enrollment code from 105 to 104 as her daughter had 

turned 22. In another health benefit enrollment form dated March 30, 2005, it advised that the 

name of the enrollee should be changed effective October 23, 1999 from the employee to 

appellant. 

On April 5, 2005 OWCP noted that it should have deducted health benefits premiums 

from appellant’s survivor benefits using code 105 from November 17, 1999 to July 10, 2003 and 

using code 104 from July 11, 2003 to March 19, 2005. On December 16, 2005 it began 

deducting health benefits from appellant’s continuing compensation. 

In a telephone call dated September 15, 2011, appellant advised that her health insurance 

provider informed her that her premiums were not being paid and that it was cancelling her 

insurance. OWCP noted that it had stopped her premiums in error. 

On October 14, 2011 OWCP calculated that appellant received an overpayment of 

compensation in the amount of $12,056.92 because it had failed to deduct health benefits 

premiums using code 105 from November 17, 1999 to July 10, 2003 for family coverage and 

failed to deduct premiums using code 104 from July 11, 2003 to March 19, 2005 and October 24, 

2010 to September 24, 2011 for single coverage. 

On October 24, 2011 OWCP advised appellant of its preliminary determination that she 

received an overpayment of compensation in the amount of $12,056.92 because it failed to 

deduct appropriate premiums for health benefits. It further informed her of its preliminary 

determination that she was without fault in the creation of the overpayment. 
3

In a November 17, 2011 response, appellant related that her daughter was not covered 

under the employee’s health insurance policy, but instead received health coverage through her 

biological father’s policy. 

On January 3, 2012 OWCP issued a preliminary determination of overpayment that 

superseded its October 24, 2011 preliminary determination. It found that appellant had received 

an overpayment of compensation only in the amount of $4,165.46 because it had failed to deduct 

health benefit premiums using code 104 for the period July 11, 2003 to March 19, 2005 and 

October 24, 2010 to September 24, 2011. It removed the period November 17, 1999 to 

July 10, 2003. OWCP additionally determined that appellant was not at fault in the creation of 

the overpayment. 

In a January 31, 2012 internal memorandum, OWCP noted that the employee claimed the 

stepdaughter as a dependent, but had not submitted a health benefits enrollment form adding 

appellant and her daughter to his health insurance plan after his marriage to appellant on 

March 13, 1993. It indicated that the record contained a form changing the name on the policy 

from the employee to appellant effective October 23, 1999. OWCP further advised that the 

health care insurer, Blue Cross Blue Shield, did not have any records regarding the employee’s 

insurance policy except for his initial selection of the insurance. 

By decision dated April 2, 2012, OWCP finalized its preliminary determination that 

appellant received an overpayment of compensation from July 11, 2003 to March 19, 2005 and 

October 24, 2010 to September 24, 2011 in the amount of $4,165.46 because it failed to deduct 

health benefits premiums from her compensation. It further found that she was not entitled to 

waiver of recovery of the overpayment and that it would and did recover the overpayment by 

deducting $522.15 from further compensation payments until the overpayment for this period 

was located, November 17, 1999 to July 10, 2003. 

On November 4, 2013 OWCP recalculated the overpayment amount for the period in the 

amount of $3,433.81 because it had failed to deduct premiums for health benefits using code 

104. In an attached worksheet, it determined that the health premiums for the period 

November 17, 1999 to July 10, 2003 totaled $3,433.81. 

On November 5, 2013 OWCP notified appellant of its preliminary determination that she 

received an overpayment of compensation in the amount of $3,433.81 for the period 

November 17, 1999 to July 10, 2003 because it failed to deduct health insurance premiums. It 

further advised her of its preliminary determination that she was without fault in the creation of 

the overpayment. OWCP requested that appellant complete the enclosed overpayment recovery 

questionnaire and submit supporting financial documents. Additionally, it notified her that, 

within 30 days of the date of the letter, she could request a telephone conference, a final decision 

based on the written evidence or a prerecoupment hearing. 

On November 19, 2013 appellant requested a prerecoupment hearing before an OWCP 

hearing representative. She advised that OWCP previously found that she received an 

overpayment of compensation from November 17, 1999 to September 24, 2011 which she had 

repaid. Appellant requested waiver of recovery of the overpayment. 
4

At the telephone hearing, held on July 16, 2014, appellant confirmed that she was 

covered by the Blue Cross Blue Shield single plan for the period November 17, 1999 through 

July 10, 2003. She asserted that she did not know if premiums were deducted because she 

moved frequently and did not always receive her mail. OWCP hearing representative asked 

appellant to complete an overpayment recovery questionnaire. Appellant advised that she 

believed that she could pay around $250.00 per month for recovery of the overpayment if 

necessary. 

On August 7, 2014 appellant submitted a completed overpayment recovery questionnaire 

dated November 19, 2013. She listed monthly income of $4,854.00 and expenses of $4,565.00. 

In a decision dated September 30, 2014, OWCP hearing representative found that 

appellant received an overpayment of compensation in the amount of $3,433.81 for the period 

November 17, 1999 through July 10, 2003 because health benefit premiums were not deducted 

from her compensation. He found that she was without fault in creating the overpayment but 

denied waiver of recovery of the overpayment as her monthly income exceeded her monthly 

expenses by more than the allotted amount. The hearing representative determined that OWCP 

should recover the overpayment by deducting $230.00 from appellant’s continuing 

compensation. 

On appeal appellant argues that she did not receive compensation from OWCP for the 

period November 17, 1999 to July 10, 2003 as she did not receive survivor benefits until 

April 4, 2005. She contends that she is both physically and mentally disabled and that repaying 

the overpayment would result in a financial hardship. 

LEGAL PRECEDENT -- ISSUE 1 

An employee entitled to disability compensation may continue his or her health benefits 

under the Federal Employees’ Health Benefits program. The regulation of the Office of 

Personnel Management (OPM), which administers the Federal Employees’ Health Benefits 

program, provides guidelines for the registration, enrollment, and continuation of enrollment for 

federal employees. In this connection, 5 C.F.R. § 890.502(a)(1) provides: 

“An employee or annuitant 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 to the United States in the 

amount of the proper employee withholding required for that pay period.”3

In addition, 5 C.F.R. § 890.502(c) provides: 

“An agency that withholds less than or none of the proper health benefits 

contributions for an individual’s pay, annuity or compensation must submit an 

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

 3 Id. at § 890.502(a)(1). 
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contributions required under section 8906 of the title, 5 United States Code, to 

OPM for deposit in the Employee’s Health Benefits Fund.”4

Under applicable OPM regulations, the employee or annuitant is responsible for payment 

of the employee’s share of the cost of enrollment.5

 An agency that withholds less than the proper 

health benefits contribution must submit an amount equal to the sum of the uncollected 

deductions.6

 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.7

ANALYSIS -- ISSUE 1 

OWCP accepted that the employee sustained thoracolumbar sprain and a herniated disc at 

L5-S1 on November 26, 1984. The employee received compensation for total disability as of 

January 1986 with deductions for health benefits using code 105. 

OWCP accepted appellant’s claim for survivor benefits and paid her compensation 

effective October 23, 1999. It informed her that she would be eligible for health coverage if the 

employee was covered by a health benefits plan and that benefits would be automatically 

deducted. OWCP, however, did not deduct premiums for health benefits from November 17, 

1999 to July 10, 2003. It calculated that she was entitled to single coverage using code 104 and 

that the premiums owed during the period totaled $3,433.81.8

 OWCP explained how it 

calculated the overpayment for this time period. When OWCP discovers an under withholding 

of health benefit premiums, the entire amount is deemed an overpayment of compensation 

because OWCP must pay the full amount of the premium to OPM when the error is discovered.9 

At the hearing appellant maintained that she had already repaid an overpayment for the 

period November 17, 1999 to July 10, 2003. However, OWCP’s prior final overpayment 

decision dated April 2, 2012 concerned the periods of July 11, 2003 to March 19, 2005 and 

October 24, 2010 to September 24, 2011. 

On appeal appellant contends that she did not receive survivor’s benefits from OWCP for 

the period November 17, 1999 to July 10, 2003. However, on June 15, 2001 she received a 

retroactive payment from OWCP of $54,114.87 covering the period October 23, 1999 to 

May 19, 2001. The Board finds that appellant received an overpayment of compensation in the 

 4 Id. at § 890.502(c). 

5 Id. at § 890.502(b)(1). 

6 Id. at § 890.502(d). 

7 James Lloyd Otte, 48 ECAB 334 (1997). 

8

 OWCP calculated the overpayment as the daily premium of $2.577 times 1,332 days to equal $3,433.81. In 

fact, the amount would be $3,432.56. 

9 See D.D., Docket No. 14-572 (issued June 9, 2014); Keith H. Mapes, 56 ECAB 130 (2004). 
6

amount of $3,432.56 for the period November 17, 1999 to July 10, 2003 because OWCP failed 

to withhold health insurance premiums. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129 of FECA5 provides that an overpayment must be recovered 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.” 

(Emphasis added.) Thus, a finding that appellant was without fault does not automatically result 

in waiver of the overpayment. OWCP must then exercise its discretion to determine whether 

recovery of the overpayment would defeat the purpose of FECA or would be against equity and 

good conscience. 6

According to 20 C.F.R. § 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 

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.10 An individual’s liquid assets 

include but are not limited to cash, the value of stocks, bonds, savings accounts, mutual funds 

and certificates of deposits.11 Nonliquid assets include but are not limited to the fair market 

value of an owner’s equity in property such as a camper, boat, second home, and furnishings and 

supplies.12 

Section 10.437 provides that 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.13 To establish that a valuable right has been 

relinquished, it must be shown that the right was in fact valuable, that it cannot be regained and 

that the action was based chiefly or solely in reliance on the payments or on the notice of 

payment.14

ANALYSIS -- ISSUE 2 

OWCP determined that appellant was without fault in creating the overpayment. As 

appellant is without fault in the matter of the overpayment, it must adjust later payments only if 

 10 20 C.F.R. § 10.436. OWCP procedures provide that 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) 

(October 2004). 

11 Id. 

12 Id. 

13 20 C.F.R. § 10.436. 

14 Id. at § 10.437(b)(1). 
7

adjustment would not defeat the purpose of FECA or be against equity and good conscience. 

Appellant provided an overpayment recovery questionnaire which indicated that her monthly 

income of $4,854.00 exceeded her monthly expenses of $4,565.00 by $289.00. An individual is 

deemed to need substantially all of her current income to meet ordinary and necessary living 

expenses if monthly income does not exceed monthly expenses by more than $50.00.15 The 

Board thus finds that as appellant’s monthly income exceeds her monthly expenses by $289.00, 

she is not entitled to waiver of recovery of the overpayment as she does not need substantially all 

of her income to meet current ordinary and necessary expenses.16 

Additionally, the evidence does not demonstrate that repayment of the overpayment 

would be against equity and good conscience because appellant has not shown that she would 

experience severe financial hardship in attempting to repay the debt or that she relinquished a 

valuable right or changed her position for the worse in reliance on the payment which created the 

overpayment.17 Consequently, OWCP properly denied waiver of recovery of the overpayment. 

On appeal appellant asserts that she is physically and mentally disabled and would 

experience hardship repaying the overpayment. As discussed, however, she has not submitted 

evidence establishing that she would experience severe financial hardship in attempting to repay 

the debt or that she relinquished a valuable right or changed her positon for the worse in reliance 

on the payments that created the overpayment.18

LEGAL PRECEDENT -- ISSUE 3 

Section 10.321(a)19 of OWCP’s implementing regulations provide that, if an 

overpayment of compensation has been made to one entitled to future payments, proper 

adjustment shall be made by decreasing subsequent payments of compensation, having due 

regard to 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 resulting 

hardship upon such individual. 

ANALYSIS -- ISSUE 3 

The record reflects that appellant continues to receive benefits from OWCP. OWCP 

hearing representative reduced her future compensation benefits by $230.00 every 28 days. He 

noted that her monthly income exceeded her monthly expenses by $289.00. The hearing 

representative found appellant was capable of repaying the debt with deductions of $230.00 

every 28 days from her continuing compensation benefits. The Board finds that OWCP gave due 

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

6.200.6a(1)(a) (June 2009). 

16 See B.P. (R.P), Docket No. 14-2017 (issued March 19, 2015); P.G., Docket No. 14-227 (issued 

January 9, 2015). 

17 See E.C., Docket No. 14-1467 (issued July 2, 2015). 

18 See William J. Murphy, 41 ECAB 569 (1989). 

19 20 C.F.R. § 10.321(a). 
8

regard to the relevant factors noted above in setting a rate of recovery of $230.00 per 

compensation period.20 It thus properly required repayment of the overpayment by deducting 

$230.00 from appellant’s ongoing compensation payments every four weeks. 

CONCLUSION 

The Board finds that appellant received an overpayment of compensation in the amount 

of $3,432.56 for the period November 17, 1999 through July 10, 2003 because OWCP failed to 

deduct premiums for health benefits. The Board further finds that OWCP properly denied 

waiver of recovery of the overpayment and properly found that it would recover the overpayment 

by deducting $230.00 from appellant’s continuing compensation. 

ORDER 

IT IS HEREBY ORDERED THAT the September 30, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed, as amended as to amount. 

Issued: September 10, 2015 

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 

 20 Id.; see also C.M. & J.M. (J.M.), 58 ECAB 504 (2007).