United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

S.B., Appellant 

and 

DEPARTMENT OF LABOR, OFFICE OF THE 

INSPECTOR GENERAL, New York, NY, 

Employer 

__________________________________________ 

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Docket No. 16-1795 

Issued: March 2, 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 September 9, 2016 appellant filed a timely appeal from an August 12, 2016 merit 

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

Employees’ Compensation Act1 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has 

jurisdiction over the merits of this case. 

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $622.08 because OWCP failed to deduct Federal Employees Group Life Insurance 

(FEGLI) premiums for the period January 10 through April 2, 2016; (2) whether OWCP properly 

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

repayment in full of the $622.08 overpayment by deducting this amount from appellant’s 

continuing compensation on September 18, 2016. 

 1

 5 U.S.C. § 8101 et seq. 
2

On appeal appellant questions whether his life insurance coverage extended during the 

period of the overpayment. 

FACTUAL HISTORY 

On October 21, 1988 appellant, then a 46-year-old criminal investigator, was injured in a 

motor vehicle accident. Following an initial denial on January 17, 1989 OWCP accepted the 

conditions of cervical and lumbar radiculopathy on March 6, 1989.2 Appellant received wageloss compensation and he remains on the periodic compensation rolls. 

The record contains a FEGLI election letter, signed by appellant on November 14, 1983, 

noting that he elected optional life insurance (OLI) in a multiple of five times his basic pay. 

By letter dated November 12, 2008, appellant informed both OWCP and the Office of 

Personnel Management (OPM) that he wished to change his OLI from a multiple of five to a 

multiple of two.3

 On December 16, 2008 OPM informed OWCP of the election. OWCP 

adjusted the insurance premium effective December 1, 2008. 

On February 11, 2016 appellant informed OWCP that, for the period beginning 

December 13, 2015 and ending January 9, 2016, life insurance premiums had not been deducted 

from his wage-loss compensation. He attached a benefit statement for the period January 10 to 

February 6, 2016, which showed no deduction for OLI. On February 16, 2016 OWCP 

telephoned appellant and explained that his was one of several cases where premium deductions 

were inadvertently reduced to zero. It explained that he continued to be covered and that his OLI 

premium would be reinstated with the next pay cycle. 

On May 18, 2016 OWCP issued a preliminary finding that an overpayment of 

compensation in the amount of $622.08 had been created for the period January 10 through 

April 2, 2016. It explained that the overpayment occurred because OLI premiums in the amount 

of $207.36 had not been withheld for three compensation periods. OWCP found appellant not at 

fault and provided an overpayment action request and overpayment questionnaire (OWCP Form 

20). It informed him that, in order for it to consider the question of waiver of recovery or to 

determine a reasonable method for collection, he must provide a completed Form 20 and attach 

supporting financial documentation, including copies of income tax returns, bank statements, 

bills, canceled checks, pay slips, and any other record to support claimed income and expenses. 

 2

 The record is unclear regarding the accepted conditions. As noted, the March 6, 1989 decision lists cervical and 

lumbar radiculopathy. A Nonfatal Summary includes herniated cervical and lumbar discs and injuries to multiple 

sites; an August 23, 1990 OWCP letter to appellant includes the lumbar conditions and head trauma, but does not 

mention the cervical conditions; an August 26, 1991 letter and statement of accepted facts dated August 21, 1992 

merely includes head trauma and injury to multiple sites; a December 7, 1998 letter from OWCP to appellant lists 

cervical and lumbar degenerative disc disease; and a January 31, 2003 OWCP memorandum indicates head trauma, 

multiple site injury with herniated discs at C5-6 and L5-S1, a bulging disc at L1-2, and lumbar radiculopathy. An 

August 13, 2014 letter to appellant’s physician listed accepted conditions of concussion without loss of 

consciousness and intervertebral disc disorder with myelopathy, lumbar region, as the only accepted conditions. 

3

 In a decision dated January 30, 2008, OWCP found an overpayment of compensation in the amount of 

$6,222.30 had been created because OWCP withheld OLI premiums based upon an incorrect salary. It found 

appellant not at fault and denied waiver because he had not provided a complete overpayment questionnaire or 

financial information. This overpayment has been repaid. 
3

OWCP notified appellant that failure to submit the requested information within 30 days would 

result in the denial of waiver of recovery. 

The record includes a fiscal worksheet and computer print-outs showing that no 

deductions had been made for OLI for the three compensation periods beginning 

January 10, 2016. A second fiscal worksheet and a payment report indicated that the OLI 

premium deduction was to be reinstated effective April 3, 2016. 

Appellant did not respond to the preliminary overpayment letter. By decision dated 

August 12, 2016, OWCP finalized the preliminary overpayment decision, finding that he 

received an overpayment of compensation in the amount of $622.08 and, while he was not at 

fault, he was not entitled to waiver of the overpayment because he had failed to provide the 

requested financial information. Repayment in the amount of $622.08 was to be deducted from 

appellant’s continuing compensation payment on September 18, 2016. 

LEGAL PRECEDENT -- ISSUE 1 

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.4 The coverage for 

basic life insurance is effective unless waived5

 and premiums for basic and optional life coverage 

are withheld from the employee’s pay.6 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 OLI coverage, in which case the schedule of deductions made will 

be used to withhold premiums from his or her annuity or compensation payments.7 Basic life 

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

receiving compensation on or before December 31, 1989;8 however, the employee is responsible 

for payment of premiums for OLI coverage, which is accomplished by authorizing withholdings 

from his compensation.9 

A 1980 amendment of 5 U.S.C. § 8706(b)(2) provided that an employee receiving 

compensation under FECA could elect continuous withholdings from his compensation, so that 

his or her life insurance coverage could be continued without reduction. Regulations at 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 

 4

 5 U.S.C. § 8702(a). 

5 Id. at § 8702(b). 

6 Id. at § 8707. 

7 Id. at § 8706. 

8 Id. at § 8707(b)(2). 

9 Id. at § 8706(b)(3)(B); see Edward J. Shea, 43 ECAB 1022 (1992). 
4

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

reductions after age 65 (at a greater premium).10 

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 remained in effect.11 Any employee who 

does not file a life insurance election form 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.12 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.13 

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.14 

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.15

ANALYSIS -- ISSUE 1 

In the present case, OWCP found that an overpayment of compensation in the amount of 

$622.08 occurred for the period January 10 through April 2, 2016 because it failed to properly 

deduct premiums for OLI. The basis for this finding includes appellant’s letter dated 

November 12, 2008 in which he requested that his OLI be changed from a multiple of five to a 

multiple of two, and the December 16, 2008 letter in which OPM informed OWCP of this 

election, after which OWCP adjusted his OLI premiums. On February 11, 2016 appellant 

informed OWCP that, beginning on December 13, 2015, OLI premiums had not been deducted 

from his compensation, and he attached a benefit statement verifying this information. On 

February 16, 2016 OWCP informed him that his premiums had been inadvertently reduced to 

zero, but that the coverage continued. The record also includes computer printouts showing that 

no deductions had been made for OLI for three compensation periods beginning 

January 10, 2016. A worksheet and a payment report indicate that the OLI premium deduction 

was to be reinstated effective April 3, 2016. 

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

11 5 C.F.R. § 870.504(a)(1). 

12 Id. at § 870.504(b). 

13 Id. at § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004). 

14 Id. at § 8102(a). 

15 Id. at § 8129(a). 
5

The Board therefore finds that as the OLI premiums were not deducted from appellant’s 

FECA compensation for the period January 10 through April 2, 2016, OWCP properly found an 

overpayment of compensation in the amount of $622.08.16

LEGAL PRECEDENT -- ISSUE 2 

Section 8129 of FECA provides that an overpayment in compensation shall be recovered 

by OWCP unless “incorrect payment has been made to an individual who is without fault and 

when adjustment or recovery would defeat the purpose of FECA or would be against equity and 

good conscience.”17 Section 10.438 of OWCP regulations provides that [t]he individual who 

received the overpayment is responsible for providing information about income, expenses, and 

assets as specified by OWCP. This information is needed to determine whether or not recovery 

on an overpayment would defeat the purpose of FECA or be against equity and good conscience. 

Failure to submit the requested information within 30 days of the request shall result in the denial 

of waiver.18 

The guidelines for determining whether recovery of an overpayment would defeat the 

purpose of FECA or would be against equity and good conscience are set forth in sections 

10.434 to 10.437 of OWCP regulations.19

Section 10.436 provides that recovery of an overpayment would defeat the purpose of 

FECA if recovery would cause hardship because the beneficiary needs substantially all of his or 

her current income (including compensation benefits) to meet current ordinary and necessary 

living expenses and, also, if the beneficiary’s assets do not exceed a specified amount as 

determined by OWCP from data provided by the Bureau of Labor Statistics.20 For waiver under 

the defeat the purpose of FECA standard, appellant must show that he or she needs substantially 

all of his or her current income to meet current ordinary and necessary living expenses, and that 

assets do not exceed the resource base.21 OWCP procedures provide that the assets must not 

exceed a resource base of $4,800.00 for an individual or $8,000.00 for an individual with a 

spouse or dependent plus $960.00 for each additional dependent.22

An individual’s liquid assets include, but are not limited to cash, the value of stocks, 

bonds, saving accounts, mutual funds, and certificate of deposits. Nonliquid assets include, but 

 16 See B.B., Docket No. 16-0135 (issued March 9, 2016). 

17 5 U.S.C. § 8129. 

18 20 C.F.R. § 10.438. 

19 Id. at §§ 10.434-10.437. 

20 Id. at. § 10.436. 

21 Id. 

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

6.200.6.a(4)(b) (June 2009). 
6

are not limited to the fair market value of an owner’s equity in property such as a camper, boat, 

second home and furnishings/supplies.23 

ANALYSIS -- ISSUE 2 

As OWCP found appellant without fault in the creation of the overpayment, waiver must 

be considered, and repayment is still required unless adjustment or recovery of the overpayment 

would defeat the purpose of FECA or be against equity and good conscience.24 Appellant, 

however, had the responsibility to provide financial information to OWCP25 and did not do so. 

In its preliminary determination dated May 18, 2016, OWCP clearly explained the 

importance of providing the completed overpayment questionnaire and financial information. It 

advised appellant that it would deny waiver if he failed to furnish the requested financial 

information within 30 days. Appellant did not submit a completed overpayment questionnaire or 

otherwise submit financial information supporting his income and expenses at any time. As a 

result, OWCP did not have the necessary financial information to determine if recovery of the 

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

conscience. 

Consequently, as appellant did not submit the financial information required under 

section 10.438 of OWCP regulations, which was necessary to determine his eligibility for 

waiver, OWCP properly denied waiver of recovery of the overpayment of compensation in the 

amount of $622.08.26

LEGAL PRECEDENT -- ISSUE 3 

Section 10.441 of OWCP’s regulations provides that when an overpayment has been 

made to an individual who is entitled to further payments, the individual shall refund to OWCP 

the amount of the overpayment as soon as the error is discovered or his or her attention is called 

to the same. If no refund is made, OWCP shall decrease later payments of compensation, taking 

into account the probable extent of future payments, the rate of compensation, the financial 

circumstances of the individual and any other relevant factors, so as to minimize hardship.27 

ANALYSIS -- ISSUE 3 

Although OWCP provided appellant an overpayment recovery questionnaire with the 

May 18, 2016 preliminary finding, as noted, he did not submit a completed questionnaire or 

other financial information that OWCP had requested prior to the final August 12, 2016 

overpayment decision. The overpaid individual is responsible for providing information about 

 23 Id. 

24 Supra note 11. 

25 20 C.F.R. § 10.438. 

26 Id.; see S.A., Docket No. 15-0592 (issued April 9, 2015). 

27 Id. at § 10.441; see Steven R. Cofrancesco, 57 ECAB 662 (2006). 
7

income, expenses, and assets as specified by OWCP.28 When an individual fails to provide 

requested financial information, OWCP should follow minimum collection guidelines designed 

to collect the debt promptly and in full.29 As appellant did not submit any financial information 

to OWCP as requested, the Board finds that there is no evidence in the record to show that 

OWCP erred in directing recovery of the $622.08 overpayment in full from his continuing 

compensation. 

As to appellant’s question on appeal, as explained by OWCP on February 16, 2016, his 

OLI remained in effect even when premium deductions were not made for the period of the 

overpayment of compensation. 

CONCLUSION 

The Board finds that appellant received an overpayment of compensation in the amount 

of $622.08, that OWCP properly denied waiver of recovery of the overpayment, and that it 

properly required repayment in full from his continuing compensation. 

ORDER 

IT IS HEREBY ORDERED THAT the August 12, 2016 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: March 2, 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 

 28 Supra note 25. 

29 Frederick Arters, 53 ECAB 397 (2002); supra note 22 at Chapter 6.200.4(c)(2) (May 2004).