United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

E.H., Appellant 

and 

DEPARTMENT OF HOMELAND SECURITY, 

LAGUARDIA INTERNATIONAL AIRPORT, 

Flushing, NY, Employer 

__________________________________________ 

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Docket No. 15-0848 

Issued: July 6, 2016 

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 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On February 24, 2015 appellant filed a timely appeal from a January 12, 2015 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 appellant received a $1,759.38 overpayment of compensation 

for the period January 12, 2013 through July 26, 2014, for which he was not at fault; (2) whether 

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

$135.00 from appellant’s continuing compensation payments. 

 1

 5 U.S.C. §§ 8101-8193. 
2

FACTUAL HISTORY 

OWCP accepted that on July 5, 2012 appellant, then a 52-year-old transportation security 

officer, sustained lumbar radiculopathy and an aggravation of a preexisting lumbar disc 

herniation while handling luggage and screening trays.2 He stopped work on July 6, 2012 and 

did not return. Appellant claimed wage-loss compensation from July 9, 2012 and continuing.3 

The employing establishment separated appellant effective January 11, 2013 and OWCP placed 

him on the periodic rolls effective January 12, 2013. 

On May 2, 2014 the record reflects that appellant elected to continue postretirement basic 

life insurance (PRBLI) as a compensationer and elected to receive PRBLI at the “No Reduction” 

option. 

In a July 31, 2014 memorandum, OWCP advised appellant that, according to the Office 

of Personnel Management (OPM), appellant’s PRBLI coverage began on January 12, 2013. 

On August 28, 2014 OWCP informed appellant that, as it had not deducted PRBLI 

premiums from appellant’s compensation for the period January 12, 2013 through July 26, 2014, 

an overpayment of compensation in the amount of $1,759.38 had been created. 

By notice dated August 28, 2014, OWCP advised appellant of its preliminary 

determination of an overpayment of compensation in the amount of $1,759.38 because PRBLI 

premiums had not been deducted from his compensation payments for the period January 12, 

2013 through July 26, 2014. 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 and was provided an opportunity for a telephone conference, a prerecoupment hearing, or a 

decision based on the written record. 

By form dated September 7, 2014 appellant requested that OWCP make a decision based 

on the written record and requested waiver, contending that the overpayment had occurred 

through no fault of his own. Included with the form, was a signed overpayment recovery 

questionnaire (Form OWCP-20). This package was received by OWCP on September 18, 2014.4 

 2

 On July 16, 2012 appellant claimed a recurrence of total disability commencing July 6, 2012. He also filed a 

claim for a July 6, 2012 traumatic lip and left leg injury when he was struck by a tray on a conveyor belt. 

3

 OWCP had originally denied the July 5, 2012 injury claim by decision dated August 30, 2012. Following a 

review of the written record, by decision dated December 12, 2012, a hearing representative affirmed the denial of 

the claim as causal relationship had not been established. OWCP later accepted the claim. 

4

 Appellant listed assets of $20.00 cash, $20.00 in a checking account, and $5.00 in a savings account. He noted 

income of $1,985.00 a month in compensation. Appellant listed monthly expenses totaling $5,792.73: $1,500.00 

for rent; $600.00 in food for himself and his wife; $200.00 for clothing; $1,028.74 in utilities; and $1,863.99 in 

miscellaneous expenses. He noted debt repayment of $100.00 a month to the Internal Revenue Service and $500.00 

a month to his attorney. Appellant submitted utility bills and debt repayment statements corroborating the amounts 

listed. In a September 6, 2014 letter, he advised OWCP of a July 30, 2014 $9,090.00 civil judgment against him for 

rent arrearages. Appellant requested that OWCP not garnish his compensation payments to satisfy the judgment or 

he would be evicted and homeless. He provided a copy of the judgment. 
3

By decision dated January 12, 2015, OWCP finalized that appellant had received an 

overpayment of compensation in the amount of $1,759.38 for the period January 12, 2013 

through July 26, 2014 as no PRBLI premiums had been 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 because no response had been received to the preliminary 

decision. OWCP directed recovery by deducting $135.00 every 28 days from his continuing 

compensation payments. 

LEGAL PRECEDENT -- ISSUE 1 

Under the Federal Employees Group Life Insurance (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 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 2 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 1 percent a 

month after age 65 with a maximum reduction of 50 percent; or Option C -- basic coverage 

 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). 

10 Id. at § 8706(b)(3)(B). See Edward J. Shea, 43 ECAB 1022 (1992) (the Board found that 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 from July 1983 through November 1989). 
4

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 under-withholding of life insurance 

premiums occurs, the entire amount is deemed an overpayment of compensation because OWCP 

must pay the full premium to the 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 

ANALYSIS -- ISSUE 1 

The employing establishment separated appellant effective January 11, 2013 and 

appellant was placed on the period rolls effective January 12, 2013. The record establishes that 

appellant elected to receive PRBLI at the “No Reduction” option. Further, OPM notified OWCP 

that coverage for PRBLI became effective on January 12, 2013 and advised OWCP that the 

premiums should be calculated on an annual salary of $39,619.00. OWCP determined that these 

premiums had not been deducted from appellant’s compensation payment from January 12, 2013 

to July 26, 2014 resulting in an overpayment of $1,759.38. 

As OWCP had failed to deduct any PRBLI premiums for the period, appellant was 

overpaid in compensation benefits in the amount of $1,759.38. The Board finds that OWCP 

properly determined the fact and the amount of overpayment. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(a) of FECA provides that when an overpayment of compensation occurs 

because of an error of fact of law, adjustment or recovery shall be made by decreasing later 

 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

payment to which the individual is entitled.17 The only exception to this requirement that an 

overpayment must be recovered is set forth in section 8129(b). 

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. 

Thus, a finding that appellant was without fault is insufficient, in and of itself, for OWCP 

to waive the overpayment. OWCP must exercise its discretion to determine whether recovery of 

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

conscience, pursuant to the guidelines provided in the implementing federal regulations. 

Section 10.436 of the implementing regulations18 provide that recovery of an 

overpayment will defeat the purpose of FECA if recovery would cause hardship to a currently or 

formerly entitled beneficiary such that: (a) 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 (b) the beneficiary’s assets do not exceed the 

resource base of $4,800.00 for an individual.19 An individual is deemed to need substantially all 

of his or her current income to meet current 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).20 

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 or her position for the worse.21 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.22 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.23 

 

 17 5 U.S.C. § 8129(a). 

18 20 C.F.R. § 10.436. 

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

6.200.6.a(1)(b) (October 2004). 

20 Id.

21 Id. at § 10.437(b). 

22 Federal (FECA) Procedure Manual, see supra note 19 at Chapter 6.200.6.b(3) (October 2004). C.P., Docket 

No. 14-975 (issued September 11, 2014). 

23 20 C.F.R. § 10.438(a); Ralph P. Beachum, Sr., 55 ECAB 442 (2004). 
6

ANALYSIS -- ISSUE 2 

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

and considered whether he was entitled to waiver of recovery. 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.24 

In its January 12, 2015 decision, OWCP found that appellant had failed to respond to the 

preliminary notice of overpayment. However, appellant had submitted substantial information 

regarding his income, assets, and expenses. He had provided an overpayment recovery 

questionnaire with supporting documentation, showing $1,500.00 in rent, $600.00 for food, 

$200.00 for clothing, $1,028.74 in utilities, and $600.00 in debt repayment, although the terms of 

the repayment were not entirely clear. Appellant also submitted a July 30, 2014 civil judgment 

for $9,090.00 for back rent. 

FECA provides that OWCP shall determine and make findings of fact in making an 

award for or against payment of compensation after considering the claim presented by the 

employee and after completing such investigation as OWCP considers necessary with respect to 

the claim.25 Since the Board’s jurisdiction of a case is limited to reviewing that evidence which 

is before OWCP at the time of its final decision,26 it is necessary that OWCP review all evidence 

submitted by a claimant and received by OWCP prior to issuance of its final decision. As the 

Board’s decisions are final as to the subject matter appealed,27 it is crucial that all evidence 

relevant to that subject matter which was properly submitted to OWCP prior to the time of 

issuance of its final decision be addressed by OWCP.28

In the present case, OWCP clearly did not review relevant evidence received prior to the 

issuance of its January 12, 2015 decision, i.e., the waiver request and the financial information 

submitted by appellant. The Board, therefore, must set aside the Office’s January 12, 2015 

decision with respect to the issues of waiver and recovery of the overpayment and remand the 

case so that OWCP may fully consider the evidence that was properly submitted by appellant 

prior to the issuance of this decision, as well as apply the standards for determining entitlement 

to waiver. Following such further consideration and after such further development as it deems 

necessary, OWCP shall issue a de novo decision. 

 24 Id. at § 10.436. 

25 Supra note 1 at § 8124(a)(2); Id. at § 10.130. 

26 See 20 C.F.R. § 501.2(c). 

27 Id. at § 501.6(c). 

28 William A. Couch, 41 ECAB 548, 553 (1990). 
7

The decision of whether OWCP shall waive recovery of an overpayment is a matter that 

rests in its discretion to be exercised pursuant to regulatory guidelines. The Board will not 

substitute its own discretion to decide the matter.29 

The case will be remanded to OWCP for further clarification, including the provision of 

additional detailed findings, regarding the issue of waiver of recovery of the $1,759.38 

overpayment. If appropriate, OWCP should request updated financial information from 

appellant. After such development as it deems necessary, it shall issue an appropriate decision in 

the case. 

On appeal appellant requests waiver of recovery due to financial hardship, emphasizing 

that he was not at fault. As stated above, the case is not in posture on the issue of waiver, as 

OWCP had not fully considered the financial evidence submitted. Appellant also contends that 

OWCP erred in finding that he failed to respond to the preliminary notice of overpayment, as he 

had submitted the overpayment recovery questionnaire and supporting documentation as 

requested. The case will be remanded to OWCP for full consideration of his financial 

information.30 

CONCLUSION 

The Board finds that OWCP properly found an overpayment of compensation in the 

amount of a $1,759.38 for the period January 12, 2013 through July 26, 2014, for which he was 

not at fault. The Board further finds that the case is not in posture for a decision regarding 

appellant’s entitlement to waiver of recovery of the overpayment. 

 29 See John M. Dunn, Docket No. 92-2096 (issued February 18, 1994). 

30 As the case is not in posture for a decision on the issue of waiver, it is premature for the Board to address the 

rate of recovery under Issue 3. 
8

ORDER 

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

Compensation Programs dated January 12, 2015 is affirmed, in part, regarding the fact and 

amount of the overpayment, and remanded in part for additional development regarding waiver 

and recovery in accordance with this decision and order. 

Issued: July 6, 2016 

Washington, DC 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board