United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

L.W., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Attica, NY, Employer 

__________________________________________ 

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Docket No. 15-1170 

Issued: March 10, 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 

ALEC J. KOROMILAS, Alternate Judge 

JURISDICTION 

On April 28, 2015 appellant filed a timely appeal from an April 6, 2015 merit decision of 

the Office 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 an overpayment of compensation in the 

amount of $3,343.44 for the period July 14, 2012 to August 23, 2014; (2) whether OWCP 

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

withheld $350.00 from appellant’s continuing compensation payments beginning May 3, 2014. 

On appeal, appellant contends that she had not received any information regarding the 

overpayment prior to OWCP’s letter which she received on April 7, 2015 and that she was not 

 1

 5 U.S.C. § 8101 et seq. 
2

aware of the $3,343.44 overpayment. She asserts that recovery of the overpayment would cause 

undue hardship for her and her family. 

FACTUAL HISTORY 

OWCP accepted that on May 3, 2011 appellant, then a 51-year-old city carrier, sustained 

a lumbar herniated disc at L2-3 when she slipped and fell in muddy water. It authorized lumbar 

surgery performed on October 1, 2012. 

Appellant began receiving wage-loss compensation on the supplemental rolls from 

July 2, 2011 to August 25, 2012. Periodic rolls payments continued through 

September 22, 2012. Subsequently, OWCP returned appellant to the supplemental rolls from 

April 7 to May 28, 2013. Appellant was placed back on the periodic rolls as of June 2, 2013. 

Postretirement life insurance premiums were not deducted from her payments. 

In a June 4, 2013 letter, the Office of Personnel Management (OPM) informed OWCP 

that as a compensationer, appellant was eligible to continue the Federal Employees’ Group Life 

Insurance (FEGLI) coverage. The final base salary on which FEGLI was based was $56,508.00. 

Appellant’s postretirement election was no reduction and the commencement date for 

postretirement deductions was July 14, 2012. OWCP began making the deduction on 

August 24, 2014. 

On September 19, 2014 OWCP issued a preliminary determination finding that appellant 

had been overpaid in the amount of $3,343.44, because postretirement life insurance premiums 

were not paid from July 14, 2012 to August 23, 2014. It made a preliminary finding that she was 

without fault in creating an overpayment. OWCP stated that premiums for the period July 14, 

2012 to August 23, 2014 amounted to $3,343.44. It informed appellant of her right to challenge 

the fact or amount of the overpayment or request a waiver of the overpayment. If appellant 

wished a waiver of the overpayment, she was directed to submit financial information by 

completing an overpayment recovery questionnaire (Form OWCP-20). She was afforded 30 

days to respond. An overpayment worksheet showed that $3,343.44 should have been deducted 

from appellant’s wage-loss compensation for the period July 14, 2012 to August 23, 2014. The 

preliminary determination was sent to her address of record. Appellant did not respond. 

By decision dated April 6, 2015, OWCP finalized that appellant received an overpayment 

of compensation in the amount of $3,343.44, for which she was not at fault. It denied waiver of 

recovery of the overpayment because she failed to submit the requested financial information. 

OWCP directed recovery from appellant’s continuing compensation payments at the rate of 

$350.00 per month commencing May 3, 2015. The decision was sent to her address of record. 

LEGAL PRECEDENT -- ISSUE 1 

Under the FEGLI program,2

 most civilian employees of the Federal Government are 

eligible to participate in basic life insurance with one or more options. The coverage for basic 

life is effective unless waived and premiums for basic and optional life coverage are withheld 

 2

 The law governing life insurance for federal employees is found at 5 U.S.C. §§ 8701-8716. 
3

from the employee’s pay. With certain restrictions, insurance benefits continue postretirement. 

Insurance remains in effect until canceled and premiums due are to be deducted from the injured 

employee’s compensation payments.3 When FEGLI premiums, including postretirement 

insurance premiums are incorrectly withheld, the entire amount of the unpaid premium is 

deemed an overpayment of compensation because OWCP must pay the full premium to OPM 

upon discovery of the error.4

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 or her compensation, 

so that his or her 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 two 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 one percent a month after age 65 with a maximum reduction of 50 percent; or Option 

C -- basic coverage subject to continuous withholdings from compensation payments with no 

reductions after age 65 (at a greater premium).5

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.6 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.7

 When an underwithholding 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.8

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.9 

When an overpayment has been made to an individual because of an error of fact or law, 

 3

 5 C.F.R. §§ 870-73. 

4 James Lloyd Otte, 48 ECAB 334, 337 (1997). 5 U.S.C. § 8707(d); see also Keith H. Mapes, 56 ECAB 130 

(2004); James Lloyd Otte, id. An underwithholding of premiums results in a two-tiered liability: The claimant owes 

the employing establishment the underwithheld funds, and similarly the employing establishment owes the 

insurance fund/OPM. If this occurs, OWCP must make OPM whole and remit the entire amount of the 

underwithholding, even if the debt is eventually waived. Federal (FECA) Procedure Manual, Part 5 -- Benefit 

Payments, Life Insurance, Chapter 5.401.11.b(2) (August 2004). 

5 See James J. Conway, Docket No. 04-2047 (issued May 20, 2005). 

6

 5 C.F.R. § 870.504(a)(1). 

7 Id. at § 504(b). 

8

 5 U.S.C. § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, supra note 4. 

9 Id. at § 8102(a). 
4

adjustment shall be made under regulations prescribed by the Secretary of Labor by decreasing 

later payments to which the individual is entitled.10

ANALYSIS -- ISSUE 1 

The Board finds that the case is not in posture for decision regarding whether appellant 

received an overpayment of compensation in the amount of $3,343.44 for the period July 14, 

2012 to August 23, 2014. 

Appellant has received compensation benefits from OWCP since July 2, 2011. While in 

compensationer status, she remained responsible for all insurance benefits, including the 

premiums for postretirement basic life insurance at whatever option appellant had selected. 

While OPM notified OWCP by letter dated June 4, 2013 that appellant had elected the 

postretirement, no reduction option beginning July 14, 2012, it did not provide documentation of 

that election. In this case, OWCP simply relied on a statement from OPM and placed the burden 

on appellant to disprove the fact of the overpayment. A claimant is entitled to an adequate 

statement of reasons with respect to any final decision by OWCP.11

In N.J.,

12 the Board remanded the case to OWCP for further development because the 

evidence was unclear as to why postretirement optional life insurance premiums had been 

deducted as of a certain date. Similarly, in this case the evidence fails to establish the basis for 

the optional postretirement life insurance premiums for the no reduction option as the signed 

election form is not in the record. 

Appellant would be responsible for the additional cost associated with her election of the 

optional postretirement basic life insurance. However, as OWCP has not factually established 

that appellant elected the optional coverage, there can be no finding of overpayment. The case 

will be remanded to OWCP.13 On remand, OWCP should obtain from OPM the executed 

election form completed by appellant, prior to determining whether appellant received an 

overpayment of compensation. After such further development as OWCP deems necessary, it 

should issue a de novo decision. 

 10 Id. at § 8129(a). 

11 J.L., Docket No. 14-0194 (issued June 25, 2015). See also L.D., Docket No. 12-1408 (issued April 26, 2013) 

(finding that OWCP did not provide adequate reasons for calculating an overpayment when the record contained no 

worksheets or other specific documentation confirming the amount of compensation received). 

12 Docket No. 13-2164 (issued April 18, 2014). 

13 See generally id. (finding that the information from OPM did not sufficiently establish the date that a claimant’s 

deductions for postretirement basic life began). See S.K., Docket No. 15-0511 (issued September 9, 2015); K.M., 

Docket No. 14-2001 (issued November 6, 2015). 
5

CONCLUSION 

The Board finds that the case is not in posture for decision regarding whether appellant 

received an overpayment in the amount of $3,343.44 for the period July 14, 2012 to 

August 23, 2014.14

ORDER 

IT IS HEREBY ORDERED THAT the April 6, 2015 decision of the Office of 

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

consistent with this decision of the Board. 

Issued: March 10, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 14 In view of the Board’s finding that the case is not in posture for decision regarding whether appellant received 

an overpayment of compensation, it is premature to address the issues of waiver and recovery.