United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

V.R., Appellant

and

DEPARTMENT OF THE TREASURY, 

INTERNAL REVENUE SERVICE, Dallas, TX, 

Employer

__________________________________________

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Docket No. 18-0626

Issued: October 19, 2018

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

ALEC J. KOROMILAS, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On January 26, 2018 appellant filed a timely appeal from two July 31, 2017 merit decisions

of the Office of Workers’ Compensation Programs (OWCP).1 Pursuant to the Federal Employees’

Compensation Act2(FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has jurisdiction to 

consider the merits of this case.3

 

1 Under the Board’s Rules of Procedure, an appeal must be filed within 180 days from the date of issuance of an 

OWCP decision. An appeal is considered filed upon receipt by the Clerk of the Appellate Boards. See 20 C.F.R. 

§ 501.3(e)-(f). One hundred and eighty days from July 31, 2017, the date of OWCP’s last decision was 

January 27, 2018. As this fell on a Saturday, appellant had until the following business day, Monday, January 29, 

2018 to file the appeal. Since using January 30, 2018, the date the appeal was received by the Clerk of the Appellate 

Boards would result in the loss of appeal rights, the date of the postmark is considered the date of filing. The date of 

the U.S. Postal Service postmark is January 26, 2018, rendering the appeal timely filed. See 20 C.F.R. § 501.3(f)(1).

2 5 U.S.C. § 8101 et seq.

3 The Board notes that appellant submitted new evidence on appeal. The Board’s jurisdiction is limited to a review 

of evidence which was before OWCP at the time it issued its final decision. Thus, the Board is precluded from 

reviewing this evidence for the first time on appeal. See 20 C.F.R. § 501.2(c)(1).
2

ISSUES

The issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $1,314.04 for the period October 16, 2016 through 

April 29, 2017 based upon an adjustment of Federal Employees’ Group Life Insurance (FEGLI) 

post-retirement basic life insurance (PRBLI); (2) whether appellant was at fault in the creation of 

the $1,314.04 overpayment of compensation; (3) whether OWCP properly determined that the 

$1,314.04 overpayment of compensation would be recovered by deducting $50.00 from 

appellant’s continuing compensation benefits, every 28 days; (4) whether OWCP properly 

determined that appellant received an overpayment of compensation in the amount of $31,660.00 

for the period May 3, 2003 through April 29, 2017 due to a under withholding of PRBLI

premiums; (5) whether appellant was at fault in the creation of the $31,660.00 overpayment of 

compensation; (6) whether OWCP properly determined that the $31,660.00 overpayment of 

compensation would be recovered by deducting $200.00 from appellant’s continuing 

compensation benefits, every 28 days. 

FACTUAL HISTORY

On May 8, 2002 appellant, then a 50-year-old revenue officer group manager, filed an 

occupational disease claim (Form CA-2) alleging neck pain and bilateral carpal tunnel syndrome

causally related to factors of her federal employment. On August 26, 2002 OWCP accepted her

claim for bilateral carpal tunnel syndrome.

OWCP paid appellant wage-loss compensation benefits on the periodic rolls commencing 

November 5, 2002. Deductions from FECA benefits were made for optional life insurance (OLI), 

$47.80 every 28 days commencing November 3, 2002. In a November 5, 2002 letter, OWCP 

advised appellant, “If you have optional life insurance and/or health benefits coverage, but no 

deduction for it is shown above, contact this office immediately. You are still responsible for these 

premiums.”

In a letter to OWCP dated October 31, 2003, the Office of Personnel Management (OPM) 

noted that it could not certify information about appellant’s health benefits and life insurance

coverage as she had elected to receive FECA benefits and the employing establishment had not 

transferred the enrollment. It indicated that appellant was eligible to continue basic life insurance 

(BLI) with no reduction and had elected additional optional, and family optional.

On August 19, 2016 OWCP notified appellant that she had the option to continue her OLI 

Option B and Option C beyond age 65.

In letters dated December 19, 2016 and December 12, 2017, OPM indicated that appellant 

was eligible to continue FEGLI with no reduction in basic, Option B, and Option C commencing 

May 3, 2003. The commencement date for the PRBLI deduction was May 3, 2003. OPM 

provided a form that appellant had completed on October 16, 2002 which indicated that she wished 

to have PRBLI with no reduction, Option A, standard optional insurance, and Option B, additional 

optional insurance. Appellant also selected Option C, family optional insurance with no reduction. 

On November 29, 2016 appellant elected to freeze her Option B life insurance at the value as of 

age 65.
3

Upon review of the fiscal record, OWCP determined that appellant received a $1,314.04 

overpayment of compensation from October 16, 2016 through April 29, 2017, i.e., $187.72 OLI 

premiums x 7 pay periods.

On June 16, 2017 OWCP notified appellant of its preliminary determination that an 

overpayment of compensation in the amount of $1,314.04 was created for the period October 16, 

2016 through April 29, 2017. It determined that the overpayment occurred “because you did not 

notify [OWCP] that your optional life insurance stopped after the age 65 and your PRBLI was 

adjusted.” OWCP found that she was at fault in the creation of this overpayment as she had 

accepted a payment which she knew or should have known was incorrect. It provided the 

calculations of appellant’s overpayment noting “because you did not notify [OWCP] that your 

optional life insurance stopped after the age 65 and your PRBLI was adjusted” effective 

October 16, 2016 after her OLI stopped. OWCP found that appellant’s deduction for OLI Option 

B was $187.72 per 28-day wage-loss compensation pay periods, and that there were seven pay 

periods during the overpayment period resulting in an overpayment of $1,314.04. It again directed 

appellant to complete an overpayment recovery questionnaire (Form OWCP-20), and advised her 

of her appeal rights.

Upon further review of the fiscal record, OWCP also determined that it had failed to deduct 

the appropriate premiums for PRBLI beginning May 3, 2003.

On June 16, 2017 OWCP notified appellant of its preliminary determination that an 

overpayment of compensation in the amount of $31,660.03 was created for the period May 3, 2003 

through April 29, 2017 as she had elected to change her PRBLI effective May 3, 2003 and it had 

failed to make proper insurance deductions from her continuing benefits. It noted that it advised 

appellant in her November 5, 2002 payment of wage-loss compensation letter that, if she had OLI

or health benefits coverage, but no deduction was shown, to contact OWCP immediately. OWCP

found that she was at fault in the creation of the overpayment as she did not contact it when her 

FEGLI deductions were not adjusted and therefore knew or should have known that her 

compensation payments were incorrect. 

OWCP provided a calculation of the amount of overpayment noting that appellant’s PRBLI 

was $170.68 every 28 days from May 3, 2003 through December 17, 2011 or $6.10 per day, 

resulting in 15 days multiplied by $6.10 from May 3 through 17, 2003 or $91.50, and 115 28-day 

periods multiplied by $170.68 from May 18, 2003 through December 17, 2011 or $19,628.20. For 

the single 28-day period from December 18, 2011 through January 14, 2012, the PRBLI was 

$175.24, while from January 15, 2012 through August 23, 2014 the PRBLI was $179.81 multiplied 

by 34 28-day periods or $6,113.54. For the period August 24, 2014 through December 12, 2015 

the PRBLI was $154.01 multiplied by 17 28-day periods or $2,618.17, and for the single 28-day 

period from December 13, 2015 through January 9, 2016 the PRBLI was $158.85. For the period 

January 10, 2016 through April 29, 2017 the PRBLI was $169.09 multiplied by 17 28-day periods 

or $2,874.53. OWCP added the various sums ($91.50 + $19,628.20 + $175.24 + $6,113.54 + 

$2,618.17 + $158.85 + $2,874.53) to reach a total of $31,660.03 for the total overpayment of 

compensation. It directed appellant to complete an overpayment recovery questionnaire, (Form 

OWCP-20) and advised her of her appeal rights.
4

In a telephone call to OWCP on July 5, 2017, appellant alleged that she was not mentally 

competent at all times. OWCP’s claims examiner requested medical documentation to support 

this allegation.

By decision dated July 31, 2017, OWCP found that appellant had received an overpayment 

of compensation in the amount of $1,314.04 for the period October 16, 2016 through 

April 29, 2017. It determined that she was at fault in the creation of the overpayment as she had 

accepted a payment which she knew or reasonably should have known was incorrect. OWCP 

further determined that the overpayment would be recovered by withholding $50.00 from future 

compensation payments, every 28 days, commencing August 20, 2017.

By a separate decision dated July 31, 2017, OWCP found that appellant had received an 

overpayment of compensation in the amount of $31,660.03 for the period May 3, 2003 through 

April 29, 2017. It determined that she was at fault in the creation of this overpayment as she had 

accepted a payment that she knew or reasonably should have known was incorrect. OWCP further 

determined that the overpayment would be collected by withholding $200.00 from appellant’s 

continuing compensation payments, every 28 days, beginning August 20, 2017.

LEGAL PRECEDENT -- ISSUE 1

Section 8129(a) of 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.4 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.5

ANALYSIS -- ISSUE 1

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

received an overpayment of compensation in the amount of $1,314.04.

OWCP found that appellant was overpaid “because [she] did not notify [OWCP] that [her]

optional life insurance stopped after the age 65 and your PRBLI was adjusted.” 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.6 OWCP’s procedures further specify that a final decision 

of OWCP “should be clear and detailed so that the reader understands the reason for the 

 

4 5 U.S.C. § 8129.

5 20 C.F.R. §§ 10.434-10.437; J.L., Docket No. 18-0212 (issued June 8, 2018).

6 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. D.S., Docket No. 16-0712 (issued October 13, 2017).
5

disallowance of the benefit and the evidence necessary to overcome the defect of the claim.”

7

 

These requirements are supported by Board precedent.8

The Board finds that OWCP did not adequately explain how an overpayment was created. 

The Board noted that appellant’s OLI stopped after she reached 65 years old and her PRBLI was 

adjusted effective October 16, 2016. The record, however, does not support this contention. 

Rather, appellant had elected to continue her Option B OLI after age 65. The Federal (FECA) 

Procedure Manual explains that the automatic payment system automatically stops all life 

insurance deductions once the claimant reaches 65, unless as in this case, the claimant has elected

to “freeze” her optional insurance.9 It is unclear from OWCP’s decision whether an overpayment 

resulted because appellant’s OLI deductions should have stopped and her PRBLI deduction should 

have changed or whether her OLI deductions were inadvertently stopped through the automatic 

payment system, resulting in an overpayment. Furthermore, OWCP alleged that the change in 

appellant’s OLI resulted in an adjustment of her PRBLI. However, it did not explain how the 

adjustment of her PRBLI was relevant to its overpayment calculation. OWCP merely noted the 

amount of her OLI withholding for the period October 16, 2016 through April 29, 2017 and did 

not address any aspect of her PRBLI election. Finally, in its separate overpayment decision

discussed infra, it provided the calculations for the under withholding of appellant’s PRBLI from 

May 3, 2003 through April 29, 2017 which encompasses the period October 16, 2016 through 

April 29, 2017 at issue in this $1,314.04 overpayment decision. The record does not provide a 

basis for an additional change in appellant’s PRBLI withholding amount for the same period and 

does not explain how this would result in an additional overpayment amount.

As such, the decision below does not contain findings of fact and a statement of reasons as 

required pursuant to 20 C.F.R. § 10.126 for final OWCP decisions. Accordingly, the July 31, 2017 

decision finding an overpayment of compensation in the amount of $1,314.04, shall be set aside 

and the case is remanded to OWCP for further development regarding the claimed $1,314.04 

overpayment of compensation.10 After this and other such further development as deemed 

necessary, OWCP shall issue a de novo decision.11

LEGAL PRECEDENT -- ISSUE 4

Under the FEGLI Program, most civilian employees of the Federal Government are eligible 

to participate in basic life insurance and one or more of the options.12 The coverage for basic life 

insurance is effective unless waived,13 and premiums for basic and optional life coverage are 

 

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

(February 2013).

8 See D.S., Docket No. 16-0721 (issued October 13, 2017); James D. Boller, Jr., 12 ECAB 45, 46 (1960).

9 Federal (FECA) Procedure Manual, Part 5 -- Benefit Payments, Life Insurance, Chapter 5.0401.8d (August 2004).

10 D.S., supra note 8.

11 In light of the Board’s disposition in Issue 1, Issues 2 and 3 are rendered moot.

12 5 U.S.C. § 8702(a).

13 Id. at § 8702(b).
6

withheld from the employee’s pay.14 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.15 

Basic insurance coverage shall be continued without cost to an employee who retired or began 

receiving compensation on or before December 31, 1989.16 However, the employee is responsible 

for payment of premiums for optional life insurance coverage which is accomplished by 

authorizing withholdings from his or her compensation.17

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).18

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.19 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.20 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 OPM upon discovery of the error.21

 

14 Id. at § 8707.

15 Id. at § 8706.

16 Id. at § 8707(b)(2).

17 Id. at § 8706(b)(3)(B). See S.P., Docket No. 17-1888 (issued July 18, 2018); Edward J. Shea, 43 ECAB 1022 

(1992) (the Board found that claimant received an overpayment of compensation where he elected PRBLI 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 of compensation was created due to no 

deduction of premiums for optional life insurance for periods from July 1983 through November 1989).

18 See S.P., supra note 17; James J. Conway, Docket No. 04-2047 (issued May 20, 2005).

19 5 C.F.R. § 870.504(a)(1).

20 Id. at § 870.504(b).

21 5 U.S.C. § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997).
7

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.22 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.23

ANALYSIS -- ISSUE 4

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $31,660.00 for the period May 3, 2003 through April 29, 2017. 

The Board finds that OWCP presented adequate findings of fact and a statement of reasons 

to support its determination that appellant received an overpayment of compensation in the amount 

of $31,660.00 for the period May 3, 2003 through April 29, 2017. The record contains the signed 

form appellant completed on October 16, 2002 which indicated her election of PRBLI with no 

reduction.24 OWCP failed to properly deduct any premiums for PRBLI, thereby creating the 

$31,660 overpayment. It explained to appellant how the overpayment occurred in its preliminary 

determination of overpayment.25 Details were provided as to the 28-day premium that should have 

been deducted during each pay period from May 3, 2003 through April 29, 2017. 

On appeal, appellant disputed the amount of the overpayment. The Board finds that OWCP 

provided a clear and detailed account of the fact and amount of the overpayment. As OWCP had 

failed to deduct any PRBLI premiums for the period May 3, 2003 through April 29, 2017 appellant 

was overpaid compensation benefits in the amount of $31,660.00. The Board finds that OWCP 

properly determined the fact and amount of this overpayment.26

LEGAL PRECEDENT -- ISSUE 5

A waiver of recovery is not possible if the claimant is at fault in the creation of the 

overpayment.27 A claimant who has done any of the following will be found to be at fault with 

respect to creating an overpayment: (1) made an incorrect statement as to a material fact which he 

or she knew or should have known to be incorrect; (2) failed to provide information which he or 

she knew or should have known to be material; or (3) accepted a payment which he or she knew 

or should have known to be incorrect. Whether or not an individual was at fault depends on the 

circumstances surrounding the overpayment. The degree of care expected may vary with the 

 

22 Id. at § 8102(a).

23 J.C., Docket No. 17-1791 (issued February 23, 2018).

24 Compare D.T., Docket No. 17-0901 (issued January 29, 2018) (finding that OWCP had not established an 

overpayment without a signed form supporting the claimant’s selection of PRBLI).

25 L.K., Docket No. 17-1393 (issued March 20, 2018).

26 E.H., Docket No. 15-0848 (issued July 6, 2016).

27 P.H., Docket No. 13-0642 (issued August 12, 2013)
8

complexity of those circumstances and the individual’s capacity to realize that he or she is being 

overpaid.28

ANALYSIS -- ISSUE 5

The Board finds that OWCP improperly found appellant at fault in the creation of the 

overpayment of compensation in the amount of $31,660.00 for the period May 3, 2003 through 

April 29, 2017. 

In a November 5, 2002 letter, OWCP notified appellant that she had optional life insurance 

and/or health benefits coverage, but if no deduction was shown to contact it immediately. It further 

advised that she was still responsible for these premiums. OPM’s form dated October 16, 2002 

confirmed appellant’s election of PRBLI, but withholdings did not commence until April 29, 2017. 

Thereafter, OWCP found that appellant was at fault in the creation of the overpayment as she 

accepted payments that she knew or should have known to be incorrect. 

The Board finds that OWCP improperly determined that appellant was at fault in the 

creation of the overpayment. According to OWCP procedures, a claimant should always be found 

without fault if the overpayment results from the under withholding of health or life insurance 

premiums, unless the claimant had actual knowledge of the calculation error.29 Under the 

circumstances of this case, the Board finds that OWCP failed to establish that appellant actually 

knew of the calculation error which resulted in the overpayment of compensation for the period

May 3, 2003 through April 29, 2017.

30

 Consequently, the case will be remanded so that OWCP 

can consider whether she is entitled to waiver of recovery.31

CONCLUSION

The Board finds the case not in posture for decision with regard to whether OWCP properly 

determined that appellant received an overpayment of compensation in the amount of $1,314.04 

for the period October 16, 2016 through April 29, 2017. The Board further finds that OWCP 

properly determined that appellant received an overpayment of compensation in the amount of 

$31,660.00 for the period May 3, 2003 through April 29, 2017 due to a under withholding of 

PRBLI. The case is in not in posture for a decision, however, with regard to whether OWCP 

properly determined that appellant was at fault in the creation of the $31,660.00 overpayment of

compensation.

 

28 Id.

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

6.200.5(b)(1)(c) (June 2009).

30 Compare C.R., Docket No. 16-1241 (issued June 15, 2017) (the Board found that OWCP had established actual 

knowledge by communications from appellant relative to the calculation error).

31 See P.H., supra note 27; J.L., Docket No. 13-132 (issued June 6, 2013). In light of the Board’s disposition in 

Issue 5, Issue 6 is rendered moot. 
9

ORDER

IT IS HEREBY ORDERED THAT the July 31, 2017 decision concerning the $1,314.04 

overpayment of compensation is set aside. The July 31, 2017 decision concerning the $31,660.00 

overpayment of compensation is affirmed in part and set aside in part. The case is remanded to 

OWCP for further action consistent with this decision.

Issued: October 19, 2018

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Alec J. Koromilas, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board