United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

B.H., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Dallas, TX, Employer 

__________________________________________ 

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Docket No. 14-1846 

Issued: January 2, 2015 

Appearances: Case Submitted on the Record

Stephen Hunt, for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

PATRICIA HOWARD FITZGERALD, Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On August 20, 2014 appellant, through her representative, filed a timely appeal from an 

August 1, 2014 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 an overpayment of 

$3,117.24 was created; (2) whether OWCP properly denied waiver of the overpayment; and 

(3) whether OWCP properly found that the overpayment should be recovered by deducting 

$300.00 from continuing compensation. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

On August 20, 2010 appellant, then a 58-year-old customer service supervisor, filed an 

occupational disease or illness claim (Form CA-2). In a narrative statement, she indicated that 

she became a supervisor in 1986 and her job included keyboard entry, filing, and writing. 

Appellant noted that she underwent left thumb surgery on March 5, 2010. OWCP accepted left 

trigger finger, left tendon ganglion, and left carpal tunnel syndrome. 

Appellant began receiving compensation on the periodic rolls as of May 8, 2011. The 

compensation payments included deductions for basic life insurance (BLI) and optional life 

insurance (OLI) premiums. 

On June 17, 2013 OWCP received a June 7, 2013 letter from the Office of Personnel 

Management (OPM) indicating that appellant’s election as a compensationer had been no 

reduction in basic life insurance coverage. This election requires the payment of additional 

premiums. OPM indicated that the commencing date for these additional life insurance 

premiums was March 10, 2012. 

In a letter dated November 20, 2013, OWCP advised appellant of a preliminary 

determination that an overpayment of $3,117.24 had been created from March 11, 2012 to 

October 19, 2013. It indicated that during this period, the additional premiums for 

postretirement life insurance benefits should have been deducted in the amount of $148.44 for 

each 28-day compensation period. The overpayment amount was determined by multiplying 

$148.44 by 21 compensation periods. OWCP found that appellant was not at fault in creating the 

overpayment. Appellant was advised to complete an OWCP-20 form and submit relevant 

financial evidence with respect to waiver. 

Appellant requested a prerecoupment hearing with OWCP Branch of Hearings and 

Review. On December 26, 2013 she submitted an OWCP-20 and financial information 

regarding expenses. A hearing was held on June 23, 2014. The hearing representative requested 

that appellant submit additional financial evidence, including a federal retirement (Thrift Savings 

Plan, or TSP) statement. 

On August 1, 2014 OWCP received additional evidence, including a TSP statement, a 

pay stub from appellant’s spouse, and a statement as to earnings. By decision dated August 1, 

2014, the hearing representative finalized the preliminary overpayment of $3,117.24. He stated 

he had requested additional financial evidence, but none had been received. The hearing 

representative denied waiver of the overpayment and found the overpayment could be recovered 

by deducting $300.00 from continuing compensation. 

LEGAL PRECEDENT -- ISSUE 1 

Under the Federal Employees Group Life Insurance (FEGLI) Program, most civilian 

employees of the Federal Government are eligible to enroll in BLI and other options. Premiums 

are withheld from an employee’s pay.2 These premiums are still withheld while an employee is 

 2 C.B., Docket No. 12-87 (issued May 23, 2012). 
3

receiving disability compensation.3 A claimant may elect life insurance benefits when separated 

or retired from federal employment, or after the claimant is separated from the employing 

establishment as a compensationer and coverage is effective immediately.4

 The default 

reduction is 75 percent (no cost), but a claimant can elect no reduction (or 50 percent reduction) 

and OWCP deducts the appropriate premiums from compensation payments.5 When premiums 

are not withheld, an overpayment arises because OWCP must pay the full amount to OPM upon 

discovery of the error.6

ANALYSIS -- ISSUE 1 

In the present case, the record does establish that an overpayment was created from 

March 11, 2012 to October 19, 2013. OPM advised OWCP that appellant had selected basic life 

insurance benefits, at no reduction, commencing March 10, 2012. OWCP therefore must deduct 

the appropriate premiums for the coverage from that date. 

The record indicates that there were 21 compensation payments issue covering the period 

March 11, 2012 to October 19, 2013. None of the payments included a life insurance premium 

deduction. As of October 20, 2013 OWCP began deducting $148.44 from continuing 

compensation. The overpayment was calculated by multiplying $148.44 by 21, resulting in 

$3,117.24 as an overpayment, with no contrary evidence of record. The Board finds OWCP 

properly found an overpayment of $3,117.24 was created. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(b) of FECA7 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 

good conscience.”8 Since OWCP found 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 

 3

 5 U.S.C. § 8707(b)(1). 

4

 Federal (FECA) Procedure Manual, Part 2 -- Claims, Compensation Claims, Chapter 2.901.15(c)(3) 

(March 2014). 

5 Id. The premiums are deducted automatically in the case management system when payments are issued. 

6 See P.H., Docket No. 13-642 (issued August 12, 2013). 

7

 5 U.S.C. § 8101 et seq. 

8 Id. at § 8129(b). 
4

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.9

 For waiver 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.10 

 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; (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. 

ANALYSIS -- ISSUES 2 & 3 

Appellant’s argument on appeal is that OWCP did not consider all the evidence of record. 

As noted in the history of the case, on August 1, 2014 OWCP received additional financial 

information. The hearing representative did not consider the evidence in the August 1, 2014 

decision, as he stated that he did not receive any evidence after the June 23, 2014 hearing. 

In the case of William A. Couch,11 OWCP had not reviewed evidence that had been 

received by OWCP four days prior to issuance of the final decision. The Board explained that it 

was critical that OWCP review all evidence submitted prior to the issuance of a final decision, 

noting that the Board can review only evidence that was before OWCP at the time of the 

decision and Board decisions are final as to the subject matter appealed. The case was remanded 

for proper consideration of the evidence. 

The principle set forth in Couch was applied to evidence received on the date of the 

OWCP decision in Linda Johnson.12 Evidence received on the date of the decision must 

properly be reviewed by OWCP. When relevant evidence is received on the date of a hearing 

representative’s decision and was not considered by the hearing representative, the case must be 

remanded to OWCP.13 

In the present case, there was relevant financial evidence received on the same date 

OWCP issued its decision, August 1, 2014. For example, the hearing representative specifically 

requested that appellant submit evidence with respect to TSP assets, and this was among the 

evidence received. As the financial evidence relates to both the waiver and recovery of the 

 

 9 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) (October 2004). 

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

11 41 ECAB 548 (1990). 

12 45 ECAB 439 (1994). 

13 See E.Z., Docket No. 14-274 (issued November 10, 2014). 
5

overpayment, the case will be remanded to OWCP in accord with Board precedent. After 

consideration of the evidence of record and any additional development as deemed necessary, 

OWCP should issue an appropriate decision. 

CONCLUSION 

The Board finds that an overpayment of $3,117.24 was created from March 11, 2012 to 

October 19, 2013. The Board further finds that the case must be remanded on the issues of 

waiver and recovery as appellant timely submitted relevant information that was not considered 

by OWCP. 

ORDER 

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

Compensation Programs dated August 1, 2014 is affirmed with respect to fact and amount of 

overpayment, and set aside and remanded with respect to waiver and recovery of the 

overpayment. 

Issued: January 2, 2015 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia Howard Fitzgerald, Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board