United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

L.V., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Bellmawr, NJ, Employer 

__________________________________________ 

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Docket No. 15-1856 

Issued: July 19, 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 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On September 11, 2015 appellant filed a timely appeal from a merit decision of the 

Office of Workers’ Compensation Programs (OWCP) dated March 18, 2015. 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 an overpayment of compensation in the 

amount of $3,285.32 for the period January 22, 2009 to May 3, 2014; and (2) whether OWCP 

abused its discretion in denying waiver of recovery of the overpayment. 

FACTUAL HISTORY 

OWCP accepted that on September 9, 2008 appellant, then a 41-year-old rural carrier, 

sustained a right foot contusion when a metal bar fell on her right foot. She stopped work on 

 1

 5 U.S.C. § 8101 et seq.
2

January 22, 2009, claiming temporary total disability and received wage-loss compensation as 

limited duty was not available. Appellant continued to receive compensation for total disability 

on the daily rolls until her benefits were terminated on February 22, 2010. 

On March 9, 2010 appellant requested review of the decision terminating her 

compensation benefits by OWCP Branch of Hearings and Review. Following a series of merit 

reviews and further development of the case record, on June 5, 2012 OWCP expanded 

acceptance of the claim to include right reflex sympathetic dystrophy of the lower limb. It found 

that appellant continued to have residuals from the September 9, 2008 employment injury and 

she was retroactively returned to the daily compensation rolls for the period February 23, 2010 

through July 28, 2012 and was placed on the periodic rolls commencing July 29, 2012. 

On June 3, 2014 OWCP issued a preliminary overpayment determination of $8,318.03 

for the period January 22, 2009 to May 3, 2014 as OWCP had failed to deduct postretirement 

basic life insurance premiums, an incorrect annual salary had been used as the basis for the 

insurance deductions, and an incorrect code had been used for the optional life insurance 

premium. It found that appellant was without fault in the creation of the overpayment and 

requested that she submit financial information pursuant to an enclosed overpayment recovery 

questionnaire (Form OWCP-20) within 30 days if she was requesting waiver of recovery of the 

overpayment. OWCP noted that waiver would be denied if she failed to furnish the information 

requested on the enclosed OWCP-20 form with supporting documentation within 30 days. 

On June 30, 2014 appellant requested a prerecoupment hearing where she disagreed that 

an overpayment had occurred and also requested waiver of recovery. She disagreed with the 

amount owed as her benefits had been terminated beginning February 22, 2010 and she would 

not have been covered by health or life insurance during that period and, therefore, should not be 

liable for retroactive premiums during that time. Appellant stated that, by letter dated March 21, 

2011, Blue Cross/Blue Shield notified her that her health insurance had been terminated on 

November 14, 2010. 

Appellant further noted that on August 3, 2012 she was notified by OWCP that she would 

receive retroactive compensation from February 23, 2010 to May 27, 2012 in the amount of 

$118,890.93, but that she only received $111,987.90 during this time period. She believed that 

the discrepancy was due to the fact that deductions had been made for health benefits and life 

insurance premiums during the time her benefits had been terminated and under appeal. 

A hearing was held on December 18, 2014 where appellant testified disputing the fact 

and amount of the overpayment and requested waiver of recovery. She also submitted numerous 

documents contesting the overpayment amount and financial information pertaining to waiver of 

recovery with OWCP-20 form. 

By decision dated February 5, 2015, a Branch of Hearings and Review hearing 

representative reversed the June 3, 2014 preliminary overpayment determination. It explained 

that OWCP had deducted health insurance and life insurance premiums for the period 

January 22, 2009 through May 3, 2014, but appellant’s insurance had been terminated on 

November 14, 2010 and she did not have coverage until her benefits were later reinstated on 

July 29, 2012. The hearing representative found that OWCP had incorrectly included deductions 
3

for premiums for the period November 14, 2010 to July 28, 2012. Upon further calculation, it 

found that appellant had been underpaid $771.51 for the period January 22, 2009 to May 3, 2014 

and returned the case file to OWCP for appropriate payment of compensation. 

By letter dated February 9, 2015, OWCP informed appellant that, pursuant to the 

February 5, 2015 decision of the hearing representative, it was processing a payment in the 

amount of $771.51. 

In a separate letter dated February 27, 2015, OWCP requested that appellant disregard the 

February 9, 2015 letter as the payment had not issued and the overpayment was still under 

review. 

By decision dated March 18, 2015, the Chief of the Branch of Hearings and Review 

(hereinafter Branch Chief) vacated the February 5, 2015 hearing representative’s decision. He 

issued a new final overpayment decision finding that appellant had received an overpayment of 

compensation in the amount of $3,285.32 for the period January 22, 2009 to May 3, 2014, that 

she was without fault in creating the overpayment, and that she was not entitled to waiver of 

recovery. The Branch Chief explained that OWCP had properly not deducted health insurance 

premiums from the retroactive payment, but that it had learned that OWCP was required to 

retroactively deduct the life insurance premiums for that period. The Branch Chief accordingly 

vacated the February 5, 2015 hearing representative’s decision and affirmed, as modified, the 

June 3, 2014 preliminary overpayment determination to reflect an overpayment in the amount of 

$3,285.32 for which she was not at fault. 

LEGAL PRECEDENT -- ISSUE 1 

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 his or her 

duty.2 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.3 

Under Federal Employees’ Group Life Insurance, most civilian employees of the Federal 

Government are eligible to participate in basic life insurance and one or more of the options. 

When an under withholding of life insurance premiums occurs, the entire amount is deemed an 

overpayment because OWCP must pay the full premium to the Office of Personal Management 

(OPM) upon discovery of the error.4

 2 Id. at § 8102(a). 

3 Id. at § 8129(a). 

4 See J.H., Docket No. 15-1385 (issued October 27, 2015). 
4

The Board has similarly 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.5

Section 10.431 of the implementing regulations provides that, before seeking to recover 

an overpayment or adjust benefits, OWCP will advise the individual in writing that the 

overpayment exists and the amount of the overpayment.6

 The written notification must also 

include a preliminary finding regarding whether the individual was at fault in the creation of the 

overpayment.7

 Additionally, OWCP is obliged to advise the individual of his or her right to 

inspect and copy the government records relating to the overpayment.8

 Lastly, the preliminary 

notice must inform the individual of his or her right to challenge the fact or amount of the 

overpayment, the right to contest the preliminary finding of fault in the creation of the 

overpayment, if applicable, and the right to request a waiver of recovery of the overpayment.9

 

The recipient of the alleged overpayment may present evidence in response to OWCP’s 

preliminary notice either in writing or at a prerecoupment hearing.10 The evidence must be 

presented or the hearing requested within 30 days of the date of the written notice of 

overpayment.11 Failure to request the hearing within this 30-day time period shall constitute 

waiver of that right.12

OWCP procedures provide that, once an overpayment is identified and calculated, it is 

responsible for determining whether the claimant was with fault or without fault, issuing a 

preliminary finding, and unless a hearing is requested, OWCP is responsible for issuing a final 

decision.13 These procedures note that, if the claimant is determined to be with fault, Form CA2201 (preliminary finding notice) must be released within 30 days of the date the overpayment is 

identified. Both the reason that the overpayment occurred and the reason for the finding of fault 

must be clearly stated. Form CA-2201 informs the claimant of the right to submit evidence and 

the right to a prerecoupment hearing on the issues of (a) fact and amount of overpayment; (b) 

fault; and (c) waiver. Along with Form CA-2201, OWCP should provide a clearly written 

statement explaining how the overpayment was calculated.14

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

6

 20 C.F.R. § 10.431(a). 

7 Id. at § 10.431(b). 

8 Id. at § 10.431(c). 

9 Id. at § 10.431(d). 

10 Id. at § 10.432 

11 Id. 

12 Id. 

13 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.4 

(May 2004). 

14 Id. at Chapter 2.600.4(a)(1) (May 2004). 
5

ANALYSIS -- ISSUE 1 

On June 3, 2014 OWCP made preliminary findings that appellant had received an 

overpayment of compensation in the amount of $8,318.03 for the period January 22, 2009 to 

May 3, 2014. On June 30, 2014 appellant requested a prerecoupment hearing disagreeing with 

the preliminary overpayment determination. By decision dated February 5, 2015, an OWCP 

hearing representative reversed the June 3, 2014 preliminary determination finding no 

overpayment for the period January 22, 2009 to May 3, 2014. Upon further calculation, 

however, the hearing representative determined that appellant had been underpaid in the amount 

of $771.51 for the period January 22, 2009 to May 3, 2014. By decision dated March 18, 2015, 

the Branch Chief vacated that decision and issued a new, revised final overpayment decision 

finding that she had received an overpayment of compensation in the amount $3,285.32 for the 

period January 22, 2009 to May 3, 2014, that she was without fault in the creation of the 

overpayment, and that she was not entitled to waiver of recovery. 

The Board finds that OWCP denied appellant due process in issuing the March 18, 2015 

overpayment decision. OWCP regulations provide that before seeking to recover an 

overpayment or adjust benefits, it will advise the individual in writing that the overpayment 

exists and the amount of overpayment.15 It must inform the individual of her right to challenge 

the fact or amount of the overpayment, the right to contest the preliminary finding of fault in the 

creation of the overpayment, and the right to request a waiver of recovery of the overpayment.16 

OWCP’s procedures further provide that a preliminary finding of overpayment must be provided 

within 30 days and must clearly identify the reason that the overpayment occurred and the basis 

for any fault finding.17 

The preliminary notice of findings is essential in overpayment cases because OWCP 

regulations limit further review of a final decision concerning overpayment to the Board. A 

claimant is prohibited from requesting a hearing, or reconsideration, following a final 

overpayment decision.18 The claimant is, therefore, precluded from introducing new evidence to 

rebut findings made in a final overpayment decision. 

The Board notes that OWCP routinely issues a new preliminary determination after an 

OWCP hearing representative reviews a preliminary overpayment decision and remands the case 

to OWCP for further findings.19 

In this case, OWCP did not issue a new preliminary determination advising appellant of 

its findings following the February 5, 2015 decision of OWCP’s hearing representative. Rather, 

 15 20 C.F.R. § 10.431(a). 

16 Id. at § 10.431(d). 

17 Id.

18 See 20 C.F.R. § 10.440 (b). 

19 See N.N., Docket No. 14-0603 (issued July 22, 2014); J.J., Docket No. 13-1905 (issued April 8, 2014); L.B., 

Docket No. 12-1202 (issued February 6, 2013). 
6

it simply amended the final amount of overpayment to the amount of $3,285.32. OWCP has not 

provided appellant with the right to challenge the new amount of overpayment or inform her 

whether she was entitled to waiver of recovery, thereby infringing upon her due process 

procedural rights.20 The Board finds that OWCP did not provide her due process and improperly 

issued the March 18, 2015 overpayment decision. 

In B.T.,

21 the Board remanded a January 2, 2013 decision finding an overpayment of 

compensation in the amount of $2,934.53 for OWCP to properly calculate the amount of the 

overpayment and to consider waiver of the entire amount of the overpayment. On remand 

OWCP recalculated the amount of overpayment as directed by the Board and, by final decision 

dated April 11, 2014, determined that the claimant had received an overpayment of 

compensation in the amount of $3,031.23. On subsequent appeal the Board set aside the 

April 11, 2014 decision finding that OWCP had failed to follow its procedures by failing to issue 

a revised preliminary determination advising the claimant of its new findings, prior to finalizing 

the overpayment. The Board concluded that as OWCP had failed to provide the claimant with 

the right to challenge the amount of the overpayment or to request waiver, it had infringed upon 

procedural rights. The case was remanded for OWCP to issue a preliminary determination 

regarding any overpayment in accordance with its procedures, prior to making any final 

overpayment decision.22 

As in B.T., in the current March 18, 2015 decision, the Branch Chief modified the fact 

and amount of overpayment from the initial June 3, 2014 preliminary determination, and also 

from the February 5, 2015 final decision. Yet, appellant was not afforded another process by 

which to present evidence to challenge the amount. 

In K.G.,23 the Board set aside an OWCP August 20, 2007 decision finding that an 

overpayment of compensation had been created in the amount of $7,183.80, and that the 

claimant was at fault in the creation of the overpayment, thereby precluding waiver of 

recovery.

24 It had remanded the case for further development regarding fact of overpayment, 

after which OWCP issued a final June 3, 2008 overpayment decision without issuing a new 

preliminary determination. The fact and amount of overpayment and findings of fault had not 

changed from the initial January 16, 2007 preliminary determination and final August 20, 2007 

overpayment decision. However, when the case returned to the Board for the second time on 

appeal, the Board found that OWCP had erred in not issuing a new preliminary determination. 

The Board found that the claimant had been denied due process because it had failed to issue a 

new preliminary determination from which she could request a hearing or review of the 

 20 20 C.F.R. §§ 10.431, 10.432. 

21 Docket No. 13-1619 (issued February 24, 2014). 

22 B.T., Docket No. 14-1909 (issued May 19, 2015). 

23 K.G., Docket No. 08-2135 (issued April 16, 2009). 

24 On January 16, 2007 OWCP made a preliminary determination that appellant was overpaid in the amount of 

$7,183.80 for the period April 10 to July 7, 2007. It found that she was at fault in the creation of the overpayment as 

she accepted a payment which she knew or should have known to be incorrect. 
7

evidence. Similarly, in the case currently before the Board, OWCP has failed to afford appellant 

due process as she was not issued a new preliminary determination of overpayment according to 

its procedures. 

Likewise in M.V.,

25 a preliminary determination had been issued on April 3, 2012 and 

finalized on October 10, 2012 finding an overpayment of compensation in the amount 

$20,227.46. On appeal the Board remanded the case for further development of the medical 

evidence for its schedule award determination and further determined that it was premature to 

address the overpayment issue as the case was not in posture for determination.26 Per the 

Board’s instructions on remand, OWCP further developed the medical evidence for its schedule 

award determination and issued a new, final overpayment decision dated December 19, 2013 

finding the same $20,227.46 overpayment amount. On a subsequent appeal, the Board remanded 

the December 19, 2013 overpayment decision for failing to properly issue a new preliminary 

determination notifying the claimant of its findings, providing the right to challenge the fact or 

amount of overpayment, or to submit new information regarding waiver of recovery of the 

overpayment.27 The Board notes that the fact and amount of overpayment had not changed from 

the initial April 3, 2012 preliminary determination and October 10, 2012 final overpayment 

decision. Yet, the Board nonetheless found that the claimant had not been afforded his 

procedural rights as OWCP had failed to issue a new preliminary determination. 

The Board notes that, in the current case, as the fact and amount of overpayment differed 

in two subsequent decisions following the initial June 3, 2014 preliminary determination, 

appellant was not afforded her procedural rights to challenge the fact and new amount of 

overpayment and to request a waiver of recovery of the overpayment.28 In both M.V. and K.G., 

the fact and amount of the overpayment did not change from the preliminary to the final 

overpayment decision issued on remand.29 However, the Board still determined that procedural 

rights had been denied without a new preliminary determination prior to its final overpayment 

decision. As in this case, OWCP failed to issue a new preliminary determination notifying 

appellant of its new findings, providing her with the right to challenge the fact and new amount 

of overpayment, or to submit new information regarding waiver of recovery of the overpayment. 

Consequently, it did not comply with the procedural rights under its regulations.30 

 25 M.V., Docket No. 13-798 (issued August 14, 2013). 

26 The Board set aside an October 20, 2012 schedule determination finding that the claimant was not entitled to 

more than 20 percent impairment of the right upper extremity and instructed OWCP to refer him for a new impartial 

medical specialist for an impairment evaluation. The Board further set aside an October 10, 2012 decision finding 

that appellant received an overpayment of compensation because he received excess compensation for a schedule 

award in the amount of $20,227.46. It determined that it was premature to address the overpayment issue as the case 

was not in posture for determination regarding the extent of permanent impairment. Id.

27 M.V., Docket No.14-1131 (issued November 14, 2014). 

28 20 C.F.R. § 10.431(d). 

29 Supra note 24 and 26. 

30 20 C.F.R. §§ 10.431, 10.432; see also K.H., Docket No. 11-603 (issued September 27, 2011); and K.G. supra 

note 24. 
8

Accordingly, the case will be remanded for OWCP to issue a preliminary determination 

regarding overpayment consistent with its own procedures. 

CONCLUSION 

The Board finds that OWCP improperly issued its March 18, 2015 overpayment decision. 

ORDER 

IT IS HEREBY ORDERED THAT the March 18, 2015 decision of the Office of 

Workers’ Compensation Programs is set aside and the case is remanded for further proceedings 

consistent with this decision of the Board. 

Issued: July 19, 2016 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board