United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

C.M., Appellant

and

U.S. COURTS, OFFICE OF THE FEDERAL 

PUBLIC DEFENDER, Little Rock, AR, 

Employer

__________________________________________

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Docket No. 16-1638

Issued: October 6, 2017

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 August 1, 2016 appellant filed a timely appeal from February 4 and April 7, 2016 

merit decisions 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 is entitled to reimbursement of health benefits 

insurance (HBI) premiums for the period February 9, 2014 to May 4, 2015; and (2) whether 

OWCP properly calculated appellant’s wage-loss compensation for the period December 20 

to 31, 2013.

 

 

1

5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY

OWCP initially accepted that on November 1, 2006 appellant, then a 41-year-old 

investigator, sustained a medial meniscus tear of her left knee due to a fall from a ladder at work. 

She stopped work on November 6, 2006 and underwent OWCP-authorized anterior cruciate 

ligament reconstruction and medial/lateral meniscus debridement of her left knee on 

December 12, 2006. Appellant received disability compensation on the daily rolls beginning 

December 27, 2006 and on the periodic rolls beginning January 21, 2007. She returned to lightduty work on February 10, 2007 and stopped work shortly thereafter. Appellant was terminated 

by the employing establishment on May 22, 2007 because she did not return to available lightduty work despite the fact that an attending physician had released her to such work. OWCP 

accepted appellant’s claim for a recurrence of disability (Form CA-2a) effective May 23, 2007 

and paid her disability compensation on the periodic rolls.

On June 10, 2009 appellant underwent OWCP-authorized left knee surgery, including 

meniscectomy and anterior cruciate ligament revision surgery. In September 2009 OWCP 

expanded the accepted conditions to include sprain of the acromioclavicular joint of the right 

shoulder and several additional left knee conditions -- bone contusion, cruciate ligament sprain, 

retear of the medial meniscus, retear of the lateral meniscus, and anterior cruciate ligament 

disruption.

By decision dated February 25, 2010, OWCP terminated appellant’s wage-loss 

compensation benefits effective March 14, 2010. It based its termination action on an October 6, 

2009 report of Dr. John L. Vander Schilden, an attending Board-certified orthopedic surgeon. 

Appellant requested reconsideration.

By decision dated July 26, 2010, OWCP denied modification of its February 25, 2010 

termination decision, finding that the medical evidence submitted was insufficient to establish 

that appellant continued to be totally disabled from all work due to the accepted conditions. 

Appellant again requested reconsideration. In a February 28, 2011 decision, OWCP

denied modification of its July 26, 2010 decision. Appellant filed an appeal with the Board.

In a June 6, 2012 decision,2the Board reversed OWCP’s February 28, 2011 decision and 

thereby reversed OWCP’s termination of appellant’s wage-loss compensation effective

March 14, 2010. The Board found that Dr. Vander Schilden’s October 6, 2009 report was not 

sufficiently well rationalized to justify the termination of appellant’s wage-loss compensation 

effective March 14, 2010. Appellant was returned to the periodic rolls.

 

2 Docket No. 11-1988 (issued June 6, 2012).
3

On a Form EN1032, signed on February 4, 2013,3appellant reported that she had been 

employed since April 19, 2012 by the Department of Veterans Affairs as a clinical pastoral 

education resident (student chaplain) at a rate of pay of $13.17 per hour.4

In an April 3, 2013 e-mail to an OWCP claims examiner, appellant indicated that she 

participated in the clinical pastoral education resident program at the Department of Veterans 

Affairs for 40 hours per week and she took both clinical and educational seminars. She advised 

that the program was accredited through the Association for Clinical Pastoral Education (ACPE) 

but was not considered a degree program.

In accordance with the Board’s June 6, 2012 decision, OWCP made supplemental 

payments to appellant to effectively reinstate her wage-loss compensation to the date of the 

March 14, 2010 termination. Based on appellant’s wages as a clinical pastoral education resident 

beginning April 19, 2012 and continuing, OWCP determined her percentage of wage-earning 

capacity under the principles of the Albert C. Shadrick case.

5

 OWCP characterized the pay 

appellant received in this job as a stipend. In making these payments, it deducted HBI premiums 

for Blue Cross Blue Shield (BCBS) health insurance coverage for the period March 14, 2010 to 

April 16, 2013.

In a November 6, 2013 letter to OWCP, appellant noted that her HBI plan through BCBS

was terminated after her wage-loss compensation was terminated effective March 14, 2010. She 

indicated that, after the Board reversed the termination of her wage-loss compensation, OWCP 

deducted HBI premiums for BCBS coverage from the wage-loss compensation it paid her for a 

three-year period that she could not use her HBI plan. Appellant asserted that OWCP improperly 

deducted these HBI premiums from her wage-loss compensation and requested that it refund 

them to her.

On December 20, 2013 OWCP paid appellant $6,830.63 through an electronic funds 

transfer in order to reimburse her for the HBI premiums for BCBS health insurance that were 

deducted from her compensation payments during the period March 14, 2010 to April 16, 2013. 

In a payment record for this transaction, OWCP noted that appellant’s HBI plan had been 

terminated on March 14, 2010 but reinstated as of April 17, 2013. OWCP indicated that HBI 

premium deductions (code 104 for the BCBS plan) were made for the period March 14, 2010 to 

April 16, 2013 despite the termination of the HBI plan. It advised that it had been confirmed that 

appellant could not use her HBI plan for this period and that the refund was appropriate given 

her inability to use the HBI plan.

 

3 Each Form EN1032 requested information about earnings and employment activity for the 15 months prior to 

the signing of each form.

4 Appellant indicated that the job was located at the Louis A. Johnson Veterans Affairs Medical Center in 

Clarksburg, West Virginia. She reported that she had actual gross earnings of “$18,964.80 gross year 2012.” In a 

Form EN1032, signed on July 10, 2013, appellant advised that she continued to work for the Department of 

Veterans Affairs as a clinical pastoral education resident at a rate of pay of $13.55 per hour. Appellant indicated 

that she had actual earnings of “$13,591.44 to date.”

5

See infra note 22.
4

Appellant telephoned OWCP on January 3, 2014 and advised that, despite being refunded 

the HBI premiums deducted for the period March 14, 2010 to April 16, 2013, she still was 

unable to use her HBI plan.

In a January 7, 2014 letter, appellant requested that OWCP pay her wage-loss 

compensation for total disability because her job as a clinical pastoral education resident for the 

Department of Veterans Affairs ended on December 29, 2013. She indicated that she did not 

have any income other than her wage-loss compensation. Appellant advised OWCP that she had 

accepted a job as a chaplain with the Veterans Administration pending the completion of a 

background check and noted that the tentative start date for the job was no later than 

February 26, 2014.

In a January 9, 2014 letter to an OWCP regional director, appellant again indicated that 

the Board, in its June 6, 2012 decision, had reversed the termination of her wage-loss 

compensation, effective March 14, 2010, but noted that OWCP had failed to reinstate her HBI 

coverage with BCBS. She asserted that OWCP had informed her that her HBI coverage would

be reinstated, effective June 2, 2013 but appellant confirmed with BCBS that her HBI coverage 

had not been reinstated despite the fact that OWCP continued to deduct HBI premiums from her 

wage-loss compensation. Appellant indicated that her participation in the clinical pastoral 

education resident program had concluded on December 20, 2013 and that her wage-loss 

compensation should return to total disability effective December 20, 2013.

In a January 14, 2014 letter, OWCP advised appellant that it was enclosing a Health 

Benefits Election Form (Standard Form 2809) that she needed to complete and return with her 

selection of an HBI plan. In making this selection, it requested that appellant use an effective 

date of January 12, 2014. OWCP informed appellant that her HBI coverage would remain in a 

cancelled status until such time as the Standard Form 2809 was completed and returned.

In a January 23, 2014 letter, appellant requested that OWCP refund her for the HBI 

premiums from April 17, 2013 to “whatever date in January 2014 the insurance actually 

become[s] effective.” She indicated that she mailed the Standard Form 2809 to OWCP on 

January 21, 2014 and noted that she was requesting reinstatement of the same HBI plan she had 

when her compensation benefits were terminated in 2010.

6

In a January 28, 2014 letter, an OWCP district director responded to appellant’s 

January 9, 2014 letter. She indicated that appellant’s wage-loss compensation was terminated 

effective March 14, 2010, but was later reinstated per the Board’s June 6, 2012 decision. The 

district director acknowledged that appellant’s HBI coverage was not reinstated at the same time 

as her wage-loss compensation due to an oversight. She indicated that it had been confirmed that 

appellant’s HBI coverage had not been reinstated during the period March 14, 2010 to 

April 16, 2013. The district director advised that BCBS confirmed that appellant had not used

her HBI coverage during the period March 14, 2010 to April 16, 2013 and, therefore, OWCP 

reimbursed her for the HBI premiums that were deducted from her compensation payments 

during that period by issuing her a $6,830.63 check on December 20, 2013. She noted that, 

because appellant had not been using the HBI coverage, she had the option of reinstating her

 

6 Appellant indicated that she previously had the standard federal plan with BCBS.
5

HBI coverage retroactive to April 17, 2013, or requesting a reimbursement of the HBI 

deductions for the period April 17, 2013 to the present. The district director noted that, by letter 

dated January 23, 2014, appellant requested reimbursement of the health insurance premiums 

from April 17, 2013 through January 2014 and she advised that this reimbursement was currently 

being processed. She further noted that, in the January 23, 2014 letter, appellant had requested 

enrollment in the same BCBS plan in which she previously had been enrolled, but advised that 

she still needed to complete and return a Standard Form 2809 which identified the code for the 

plan she wished to select. The district director indicated that appellant had previously been 

enrolled with BCBS under code 104.

On January 30 , 2014 OWCP received the completed Standard Form 2809 in which 

appellant elected to have HBI coverage with the Federal Employees Health Benefits (FEHB) 

Program under BCBS (code 104) effective January 12, 2014. A portion of the form was 

completed by an OWCP official as OWCP was designated as the entity administering the 

coverage.

Also on January 30, 2014 OWCP issued appellant a $1,656.84 check in order to 

reimburse her for the HBI premiums for BCBS health insurance that were deducted from her 

compensation payments during the period April 17, 2013 to January 11, 2014. In payment 

records for this transaction, it noted that, for the period April 17, 2013 to January 11, 2014, 

appellant had HBI premium deductions (code 104 for the BCBS plan) taken from her wage-loss 

compensation despite not having access to HBI coverage. Therefore, appellant was entitled to 

reimbursement for HBI premium deductions for this period. It was noted that appellant chose to

have coverage under BCBS (code 104) effective January 12, 2014.

In a February 4, 2014 letter, appellant advised OWCP that her HBI coverage still had not 

been restarted even though she submitted a Standard Form 2809 making an election of FEHB 

coverage. 

In an April 16, 2015 letter, appellant advised OWCP that her problems with HBI 

coverage had not been resolved despite inquiries she made to BCBS and the Office of Personnel 

Management (OPM). She argued that she should not be liable for HBI premiums given that 

OWCP had failed to notify BCBS of the termination of her HBI coverage.

In a May 21, 2015 letter, OWCP advised appellant that she had been reimbursed the HBI 

benefits for the appropriate period. It noted that appellant’s HBI enrollment had been transferred 

back to her former employing establishment, U.S. Courts, Office of the Public Defender, and 

advised her that, if any HBI deductions for BCBS were made from February 9, 2014 to the 

present, then she had to address the issue with her former employing establishment.

On July 9, 2015 OWCP received a FECA Health Benefits Transmittal Sheet which was 

signed by an OWCP health benefits technician on July 9, 2015. The portion of the form to be 

completed by an OWCP claims examiner (Part A) contained the name of a claims examiner, but 

no signature of that claims examiner. In Part A of the form, the HBI code was listed as 104 and 

the “Transfer Effective Date” for HBI coverage was listed as February 9, 2014. OWCP also 

received a Notice of Change in Health Benefits Enrollment (Standard Form 2810) which was 
6

signed by an OWCP official on July 9, 2015, it was noted that OWCP had accepted transfer of 

appellant’s HBI enrollment with BCBS under code 104. 

OWCP had also been developing the evidence as to whether appellant continued to be 

disabled from all work. Based on the medical evidence, on January 28, 2014, OWCP terminated 

appellant’s wage-loss compensation effective February 9, 2014. It based its termination action 

on October 17 and November 16, 2013 medical reports of Dr. Peter K. Thrush, a Board-certified 

orthopedic surgeon. Appellant appealed this decision to the Board.

In a May 5, 2015 decision,7the Board reversed OWCP’s January 28, 2014 termination of 

appellant’s wage-loss compensation effective February 9, 2014. The Board found that OWCP’s 

conversion of Dr. Thrush from an impartial medical specialist to an OWCP referral physician 

deprived appellant of the opportunity to exercise her right, under section 8123(a) of FECA, to 

have a physician of her choosing present at the examination by Dr. Thrush. Therefore, OWCP 

could not rely on the opinion of Dr. Thrush to justify its termination action.

In a May 9, 2015 letter, appellant reiterated her request for total disability beginning 

December 21, 2013 as she had completed the clinical pastoral education residency program on 

December 20, 2013 and that wage-loss compensation continued to be paid at the reduced amount 

from December 21, 2013 through February 8, 2014 when benefits had been terminated. She 

noted that, from December 21, 2013 through February 8, 2014, she was not employed and had no 

other source of income.

In a June 8, 2015 letter, appellant again advised OWCP that her stipend in the clinical 

pastoral education residency program ended on December 20, 2013 and that she had not received

any pay in connection with the program after that date. Appellant submitted an Internal Revenue 

Service (IRS) Form 1099G showing that she received $7,514.00 in unemployment compensation 

in 2014.8

In a Form EN1032 signed on June 7, 2015, appellant indicated that she had $2,466.26 in 

income during the 15 months prior to June 7, 2015 due to selling various items through the 

ebay.com and craigslist.com websites and through yard sales.9

In a June 12, 2015 letter, OWCP noted that, in order to evaluate whether she was 

underpaid for this period, it needed copies of her 2013 and 2014 tax returns. It indicated that the 

compensation reduction was calculated on appellant’s annual earnings from the stipend she 

received for the year 2013. It advised that, upon receipt of her tax returns, a decision would be 

made regarding whether she was underpaid wage-loss compensation for the period December 21, 

2013 to February 8, 2014.

 

7 Docket No. 14-1302 (issued May 5, 2015).

8

In a July 2, 2015 e-mail, appellant advised OWCP that an IRS official told her that her taxable income in 2014

did not meet the minimum threshold for filing a tax return.

9

In a June 16, 2015 letter, appellant indicated that she also had an online store on the zazzle.com website since 

2009 but that she had not made any sales.
7

Following the Board’s reversal of the February 9, 2014 termination of appellant’s wageloss compensation, OWCP made a payment to appellant on July 10, 2015 which reinstated her 

total wage-loss compensation effective February 9, 2014. The amount of reinstated wage-loss 

compensation beginning February 9, 2014 was reduced by periodic deductions for HBI 

premiums under code 104.10

On August 13, 2015 appellant received a Standard Form 2809 which she completed on 

May 15, 2006 in order to elect HBI coverage with BCBS under code 104. The portion of the 

form to be completed by the relevant agency was initially completed on May 16, 2006 by an 

official of appellant’s former employing establishment, U.S. Courts, Office of the Federal Public 

Defender. However, an unidentified individual had struck out the “Effective date of action” 

which had been listed as May 16, 2006 and replaced it with the date February 9, 2014. The 

document was submitted in response to a July 9, 2015 letter in which OWCP asked the former 

employing establishment to submit any HBI enrollment forms completed by appellant that it had 

in its possession. OWCP advised the former employing establishment that it was deducting HBI 

premiums from appellant’s continuing wage-earning compensation payments and that OWCP 

would “now be the employing office for health insurance purposes.”

In a September 17, 2015 letter, OWCP advised appellant that it had previously asked her 

to submit her tax returns from 2013 and 2014 but that it had not received them. It again 

requested that she submit a copy of her tax return from 2013. OWCP also requested a statement 

from the IRS official who had advised her that she did not have to file a tax return for 2014.

In an October 8, 2015 letter, appellant indicated that she only had a brief conversation 

with the IRS official and would not be able to obtain a statement from the official.

11

 She 

asserted that she should be refunded for the HBI premium deductions for the period February 9, 

2014 to May 4, 2015 because her HBI coverage had been terminated for that period.

In a November 29, 2015 letter, appellant again advised OWCP of her belief that she was 

still due reimbursement of HBI premiums deducted from her wage-loss compensation for the 

period February 9, 2014 to May 4, 2015. She argued that her request for reimbursement was 

properly directed to OWCP because the deductions were made by OWCP. Appellant also 

argued that she was entitled to total wage-loss compensation for the period December 21, 2013 

to February 8, 2014. She indicated that her stipend from the clinical pastoral education residency 

program ended on December 20, 2013 and that she was not in receipt of any wages from any 

form of employment.

In a December 31, 2015 letter, OWCP advised appellant that HBI premium deductions 

for the period February 9 to May 4, 2015 were correct and were done in accordance with her 

Standard Form 2809 signed on January 12, 2014 and her January 23, 2014 letter requesting 

reinstatement of HBI coverage. It noted that the evidence of record showed that HBI premium 

 

10 On July 10, 2015 OWCP paid appellant $52,565.75 in wage-loss compensation for the period February 9, 2014 

to June 27, 2015 through an electronic transfer. Before arriving at this amount, OWCP deducted $3,200.04 for HBI 

coverage under code 104.

11 Appellant also submitted documents of general application regarding the filing of tax returns.
8

refunds issued to her were proper and complete and that there was no pending HBI premium 

refund. OWCP informed appellant that if she had evidence showing that she was due an HBI 

premium refund from OWCP, rather than from her employing establishment, she should submit 

the evidence within 30 days. It indicated that appellant had not submitted her tax return from 

2013 or a signed statement listing the total monetary amount of the stipend she was paid in 2013. 

Moreover, she had not submitted a statement detailing any other source of income in 2013 (such 

as from selling items online). OWCP informed appellant that she had 30 days to submit the 

requested information, after which it would issue a formal decision regarding these matters.

In a December 31, 2015 letter received on January 5, 2016, appellant again expressed her 

belief that she was underpaid wage-loss compensation due to matters relating to her HBI 

coverage and her receipt of a stipend in 2013.

In a February 4, 2016 decision, OWCP determined that appellant was not entitled to 

reimbursement of HBI premiums for the period February 9, 2014 through May 4, 2015. It noted 

that, when appellant’s FECA benefits were terminated, a transfer of her HBI enrollment package 

was made to her employing establishment. OWCP indicated that, in order for appellant to keep 

her HBI coverage, regardless of whether she was receiving FECA or OPM benefits, she was 

required to pay premiums for HBI. It noted that there was no evidence explaining why appellant 

was entitled to any HBI reimbursement from OWCP for the period February 9, 2014 to 

May 4, 2015. OWCP indicated that it advised appellant that all reimbursements regarding HBI 

premiums had been processed. It noted that, in a December 31, 2015 letter, it informed her that 

she had 30 days to submit additional evidence regarding the matter. It indicated that no new 

evidence had been submitted by appellant and that, to date, sufficient evidence had not been 

received to establish that she was entitled to a reimbursement of HBI premiums for the period 

February 9, 2014 to May 4, 2015 from OWCP.

On February 12, 2016 OWCP made a supplemental payment to appellant for the period 

January 1 to February 8, 2014 to reflect 100 percent loss of wage-earning capacity for that 

period.12

In an April 7, 2016 decision, OWCP determined that appellant had not been underpaid 

wage-loss compensation for the period December 20 to 31, 2013. It noted that, in an April 3, 

2013 e-mail and May 9, 2015 letter, appellant advised that she was in the clinical pastoral 

education resident program with the Department of Veterans Affairs for 40 hours a week and 

that she received a stipend for her participation in this program. OWCP indicated that the 

evidence of record revealed that she completed the program on December 20, 2013. It noted 

that, on several occasions, it had requested that appellant submit a copy of her 2013 income tax 

return, as well as a statement identifying the stipend pay she received in 2013. OWCP indicated 

that appellant had not provided the information requested. It noted that appellant was advised 

that she was entitled to any underpayment from December 20 to 31, 2013 if she documented her 

earnings for this period.

13

 OWCP indicated that, on numerous occasions, it afforded appellant 30 

 

12 Appellant had previously received compensation reflecting a 100 percent loss of wage-earning capacity for the 

period February 9, 2014 and continuing.

13 OWCP indicated that it compensated appellant for wage loss from January 1, to February 8, 2014 because she 

had not received any stipend or earnings for 2014.
9

days to submit the evidence requested, but that she did not submit such evidence. Appellant also 

had not submitted evidence supporting that she received a stipend in 2013. OWCP noted that, 

regardless of whether appellant completed the program on December 20, 2013, it was unclear 

whether the stipend she received was paid for all of 2013, including the period December 20 to 

31, 2013. This information was needed to determine whether any amount paid to appellant for 

the period December 20 to 31, 2013 needed to be applied to her monthly wage-loss benefits in 

order to evaluate whether any underpayment was due to her for this period. OWCP indicated 

that appellant failed to submit the requested information and found insufficient evidence to 

support authorization for an underpayment of wage-loss compensation for that period.

LEGAL PRECEDENT -- ISSUE 1

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

under the Federal Employees Health Benefits (FEHB) Program. The regulations of the Office of 

Personnel Management (OPM), which administers the FEHB Program, provide guidelines for 

the registration, enrollment, and continuation of enrollment for federal employees. In this 

connection, 5 C.F.R. § 890.502(a) provides that employees and annuitants are responsible for 

paying the enrollee share of the cost of enrollment for every pay period during which they are 

enrolled. An employee or annuitant incurs a debt to the United States in the amount of the 

proper employee or annuitant withholding required for each pay period during which they are 

enrolled if the appropriate health benefits withholdings or direct premium payments are not 

made.14

ANALYSIS -- ISSUE 1

OWCP accepted that on November 1, 2006 appellant sustained multiple left knee and 

right shoulder conditions due to a fall from a ladder at work. Appellant stopped work and 

received wage-loss compensation benefits. She was terminated by the employing establishment 

on May 22, 2007, but continued to receive wage-loss compensation on the periodic rolls. By 

decision dated February 25, 2010, OWCP terminated appellant’s wage-loss compensation 

benefits effective March 14, 2010. In a June 6, 2012 decision, the Board reversed OWCP’s 

termination of appellant’s wage-loss compensation effective March 14, 2010 and OWCP later 

reinstated her wage-loss compensation retroactive to March 14, 2010. In December 2013 and 

January 2014 OWCP reimbursed appellant for the HBI premiums for BCBS coverage that were 

deducted from her compensation payments during the period March 14, 2010 to 

January 11, 2013. It noted that appellant’s HBI plan had been terminated on March 14, 2010 and

indicated that HBI premium deductions (under code 104) were made for the period March 14, 

2010 to January 11, 2013 despite the termination of the HBI plan. OWCP advised that it had 

been confirmed that appellant could not use her HBI plan for this period and that the refund was 

appropriate given her inability to use the HBI plan. 

In a January 28, 2014 decision, OWCP again terminated appellant’s wage-loss 

compensation effective February 9, 2014. In a May 5, 2015 decision, the Board reversed 

OWCP’s termination of appellant’s wage-loss compensation effective February 9, 2014. 

 

14 5 C.F.R. § 890.502(a).
10

Following the Board’s reversal of the termination action, OWCP made a payment to appellant on 

July 10, 2015 which reinstated her total wage-loss compensation effective February 9, 2014. 

The amount of reinstated wage-loss compensation beginning February 9, 2014, however, was 

reduced by periodic deductions for HBI premiums in the amount of $3,200.04 under code 104. 

Appellant claimed that she was entitled to reimbursement of those HBI premium deductions for 

the period February 9, 2014 to May 4, 2015 because she had no access to health insurance during 

that period. In a February 4, 2016 decision, OWCP denied appellant’s claim for reimbursement 

of HBI premium deductions for the period February 9, 2014 to May 4, 2015. 

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

entitled to reimbursement of HBI premiums for the period February 9, 2014 to May 4, 2015.

In its February 4, 2016 decision denying reimbursement of HBI premiums for the period 

February 9, 2014 to May 4, 2015, OWCP noted that a transfer of appellant’s HBI enrollment 

package was made to her former employing establishment, U.S. Courts, Office of the Federal 

Public Defender. It indicated that, in order for appellant to keep her HBI coverage, regardless of 

whether she was receiving FECA or OPM benefits, she was required to pay premiums for HBI. 

OWCP noted that, to date, sufficient evidence had not been received to support that she was 

entitled to a reimbursement from OWCP of HBI premiums for the period February 9, 2014 to 

May 4, 2015.

However, in denying appellant’s claim for reimbursement of HBI premiums for the

period February 9, 2014 to May 4, 2015, OWCP did not adequately explain the basis for its 

denial. In deciding matters pertaining to a given claimant’s entitlement to compensation 

benefits, OWCP is required by statute and regulation to make findings of fact.15 OWCP 

procedures further specify that a final decision of OWCP “should be clear and detailed so that 

the reader understands the reason for the disallowance of the benefit and the evidence necessary 

to overcome the defect of the claim.”

16

 These requirements are supported by Board precedent.17

In its February 4, 2016 decision and prior communications to appellant,18 OWCP 

suggested that appellant’s former employing establishment, U.S. Courts, Office of the Federal 

Public Defender, was the only entity responsible for reimbursing her HBI premiums for the 

period beginning February 9, 2014. The Board notes that appellant was terminated from her 

former employing establishment on May 22, 2007 and that OWCP did not provide support for its 

suggestion that her former employing establishment was responsible for reimbursing her HBI 

 

15 5 U.S.C. § 8124(a) provides that OWCP “shall determine and make a finding of facts and make an award for or 

against payment of compensation.” 20 C.F.R. § 10.126 provides in pertinent part that the final decision of OWCP 

“shall contain findings of fact and a statement of reasons.”

16 See Federal (FECA) Procedure Manual, Part 2 -- Claims, Disallowances, Chapter 2.1400.5c(3)(e) 

(February 2013).

17 See James D. Boller, Jr., 12 ECAB 45, 46 (1960).

18 In a May 21, 2015 letter, OWCP noted that appellant’s HBI enrollment had been transferred back to her 

employing establishment, U.S. Courts, Office of the Public Defender, and advised her that, if any HBI deductions 

for BCBS were made from February 9, 2014 to the present, then she had to address the issue with her employing 

establishment.
11

premiums for the claimed period. It did not cite to relevant statutes, procedures, regulations, or 

Board precedent to support this ostensible position. OWCP indicated that appellant’s HBI 

coverage had been transferred to her former employing establishment, but it did not provide 

adequate support for this statement.19 Moreover, OWCP failed to articulate a reason for not 

reimbursing HBI premiums for the period February 9, 2014 to May 4, 2015 (the second period 

appellant’s benefits had been terminated and during which the termination was reversed by the 

Board) for the same reason that it previously reimbursed her for HBI premiums deducted for the 

previous period of termination (March 14, 2010 to January 11, 2014), which was reversed by the 

Board.

For these reasons, OWCP’s decision denying reimbursement of HBI premium deductions 

for the period February 9, 2014 to May 4, 2015 would not allow appellant to understand the 

reason for the disallowance and the evidence necessary to overcome the defect of her claim.20 

Therefore, the case shall be remanded to OWCP for further consideration of this matter, to be 

followed by the issuance of a de novo decision containing adequate facts and findings. 

LEGAL PRECEDENT -- ISSUE 2

Under 5 U.S.C. § 8115(a), wage-earning capacity is determined by the actual wages 

received by an employee if the earnings fairly and reasonably represent his or her wage-earning 

capacity. Generally, wages actually earned are the best measure of wage-earning capacity and, 

in the absence of evidence showing that they do not fairly and reasonably represent the injured 

employee’s wage-earning capacity, must be accepted as such measure.

21

 The formula for 

determining loss of wage-earning capacity, developed in the case of Albert C. Shadrick,

22 has 

been codified at section 10.403(c)-(e) of OWCP’s regulations.23 Under the Shadrick formula, 

OWCP calculates an employee’s wage-earning capacity in terms of percentage by dividing the 

employee’s actual earnings (or constructed earnings) by the current or updated pay rate for the 

position held at the time of injury.24 The employee’s wage-earning capacity in dollars is 

computed by first multiplying the pay rate for compensation purposes, defined in 20 C.F.R. 

§ 10.5(a) as the pay rate at the time of injury, the time disability begins or the time disability 

 

19 On January 30, 2014 OWCP received a Standard Form 2809 in which appellant elected to have HBI coverage 

under BCBS (code 104) effective January 12, 2014. A portion of the form was completed by an OWCP official as 

OWCP was designated as the entity administering the coverage. On August 13, 2015 OWCP received a Standard 

Form 2809 which appellant completed on May 15, 2006 in order to elect HBI coverage with BCBS under code 104. 

The portion of the form to be completed by the relevant agency was initially completed on May 16, 2006 by an 

official of appellant’s former employing establishment, U.S. Courts, Office of the Federal Public Defender. 

However, an unidentified individual had struck out the “Effective date of action” which had been listed as May 16, 

2006 and replaced it with the date February 9, 2014. The Board notes that, given the manner in which the form was 

altered, it would not effectuate a transfer of HBI coverage to appellant’s former employing establishment.

20 See supra note 16.

21 E.W., Docket No. 14-584 (issued July 29, 2014); Dennis E. Maddy, 47 ECAB 259, 262 (1995).

22 5 ECAB 376 (1953).

23 20 C.F.R. § 10.403(c)-(e).

24 Id. at § 10.403(c)-(d).
12

recurs, whichever is greater, by the percentage of wage-earning capacity. The resulting dollar 

amount is then subtracted from the pay rate for compensation purposes to obtain loss of wageearning capacity.25

 The regulations further provide that the employee’s wage-earning capacity in 

terms of percentage is computed by dividing the employee’s earnings by the current pay rate.26

ANALYSIS -- ISSUE 2

In early-2013 appellant reported to OWCP that she had been employed since April 19, 

2012 by the Department of Veterans Affairs as a resident in a clinical pastoral education 

residency program and that she had received a stipend while she was participating in this 

program. She later advised that the program ended December 20, 2013 and claimed that she 

should have received total wage-loss compensation (rather than partial wage-loss compensation) 

for the period December 20 to 31, 2013 because she did not have income for this period which 

OWCP had included when calculating her loss of wage-earning capacity.27 In an April 7, 2016 

decision, OWCP determined that it had properly calculated appellant’s wage-loss compensation 

for the period December 20 to 31, 2013.

In its April 7, 2016 decision denying appellant’s claim for increased wage-loss 

compensation from December 20 to 31, 2013, OWCP noted that it had requested that appellant 

submit a copy of her 2013 income tax return, as well as a statement identifying the stipend pay 

she received in 2013. It advised appellant that it needed this information so that it could 

determine whether her claim for increased wage-loss compensation from December 20 

to 31, 2013 was valid.

28

 

The Board finds that OWCP properly explained that it needed specific information 

regarding the payment of the stipend, either through a copy of appellant’s 2013 tax return or any 

other proof establishing the period covered by the stipend. OWCP believed it was likely the 

stipend went through the end of the calendar year even though the actual program ended on 

December 20, 2013. Despite the numerous requests by OWCP, appellant failed to provide the 

requested information. OWCP properly explained the basis for its reasoning that appellant had 

earnings during the period December 20 to 31, 2013, such that she would only be entitled to 

partial wage-loss compensation for this period.

The Board finds that OWCP properly denied the findings of an underpayment of wageloss compensation benefits under the wage-earning capacity determination.

 

25 20 C.F.R. § 10.403(e).

26 Id. at § 10.403(d). 

27 In determining the percentage of appellant’s loss of wage-earning capacity from April 12, 2012 through 

December 31, 2013, OWCP applied the principles of the Albert C. Shadrick case, supra note 22, and determined that 

she had partial wage loss during this period. Effective January 1, 2014, OWCP paid appellant total wage-loss 

compensation on the periodic rolls.

28 See supra notes 22 through 26 explaining how earned wages are incorporated into the Shadrick calculation for 

determining loss of wage-earning capacity.
13

CONCLUSION

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

entitled to reimbursement of HBI premiums for the period February 9, 2014 to May 4, 2015. 

The Board also finds that OWCP properly calculated her wage-loss compensation for the period 

December 20 to 31, 2013.

ORDER

IT IS HEREBY ORDERED THAT the April 7 decision of the Office of Workers’ 

Compensation Programs is affirmed and the February 4, 2016 decision of OWCP is set aside, 

and the case is remanded to OWCP for further action consistent with this decision.

Issued: October 6, 2017

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