United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

C.P., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Concord, CA, Employer

__________________________________________

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Docket No. 19-0317

Issued: July 1, 2019

Appearances: Case Submitted on the Record

Sylvia R. Johnson, for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

PATRICIA H. FITZGERALD, Deputy Chief Judge

JANICE B. ASKIN, Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On November 2, 2018 appellant, through her representative, filed a timely appeal from an 

October 26, 2018 merit decision of the Office of Workers’ Compensation Programs (OWCP). 

Pursuant to the Federal Employees’ Compensation Act2(FECA) and 20 C.F.R. §§ 501.2(c) and 

501.3, the Board has jurisdiction over the merits of this case.3

 

1

In all cases in which a representative has been authorized in a matter before the Board, no claim for a fee for legal 

or other service performed on appeal before the Board is valid unless approved by the Board. 20 C.F.R. § 501.9(e). 

No contract for a stipulated fee or on a contingent fee basis will be approved by the Board. Id. An attorney or 

representative’s collection of a fee without the Board’s approval may constitute a misdemeanor, subject to fine or 

imprisonment for up to one year or both. Id.; see also 18 U.S.C. § 292. Demands for payment of fees to a 

representative, prior to approval by the Board, may be reported to appropriate authorities for investigation.

2 U.S.C. § 8101 et seq.

3 The Board notes that, following the October 26, 2018 decision, OWCP received additional evidence. However, 

the Board’s Rules of Procedure provides: The Board’s review of a case is limited to the evidence in the case record 

that was before OWCP at the time of its final decision. Evidence not before OWCP will not be considered by the 

Board for the first time on appeal. 20 C.F.R. § 501.2(c)(1). Thus, the Board is precluded from reviewing this 

additional evidence for the first time on appeal. Id. 
2

ISSUES

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

amount of $5,423.55 for the period March 24, 2012 to March 31, 2018 due to incorrect deduction

of life insurance premiums; (2) whether OWCP abused its discretion by refusing to waive recovery 

of the overpayment; and (3) whether OWCP properly required recovery of the overpayment by 

deducting $300.00 from appellant’s continuing compensation payments every 28 days.

FACTUAL HISTORY

On May 22, 2009 appellant, then a 54-year-old letter carrier, filed an occupational disease 

claim (Form CA-2) alleging that on May 7, 2008 she first realized that cervical, lumbar, and 

thoracic conditions had been caused by casing mail while in the performance of duty. She did not 

initially stop work. By decision dated September 9, 2010, OWCP accepted the claim for cervical, 

lumbar, and thoracic sprains. It subsequently expanded acceptance of appellant’s claim to include 

depression.

In a letter dated May 17, 2011, OWCP placed appellant on the periodic rolls for temporary 

total disability with the first payment covering the period April 9 to May 7, 2011. It indicated that 

it was deducting $17.40 for basic life insurance (BLI) and $39.66 for optional life insurance (OLI). 

OWCP requested that appellant notify it immediately if she had benefits such as OLI that it was 

not deducting from her wage-loss compensation.

By decision dated June 28, 2013, OWCP reduced appellant’s wage-loss compensation 

based on her capacity to earn wages as surveillance system monitor, effective June 30, 2013. It 

utilized the Shadrick formula4and found that appellant had 40 percent loss of wage-earning 

capacity (LWEC). OWCP indicated it was deducting premiums of $17.40 for BLI and $34.20 for 

OLI and was not deducting premiums for postretirement basic life insurance (PRBLI).

In a July 1, 2013 letter, the Office of Personnel Management (OPM) informed OWCP that 

as a compensationer appellant was eligible to continue Federal Employees’ Group Life Insurance

(FEGLI) coverage in the form of basic and optional life insurance coverage. It requested OWCP 

to deduct for Code 90 as appellant had elected BLI option Bx3 and full reduction, effective 

March 24, 2012. OPM further advised that appellant had elected PRBLI coverage with 75 percent 

reduction. It noted that her adjusted annual salary on which life insurance deductions was based 

increased to $56,508.00.

Following appellant’s request for an oral hearing, by decision dated January 24, 2014,

OWCP’s hearing representative reversed the June 28, 2013 LWEC determination. 

In a February 11, 2014 letter, OWCP informed appellant that her compensation for 

temporary total disability was being reinstated retroactive June 30, 2013. It further advised that it 

was deducting premiums of $17.70 for BLI and $34.66 for OLI. 

By notice dated April 10, 2018, OWCP advised appellant of its preliminary determination 

that she had received an overpayment of compensation because OLI premiums had not been 

correctly deducted from her compensation payments for the period March 24, 2012 to 

 

4 Albert C. Shadrick, 5 ECAB 376 (1953).
3

March 31, 2018. It advised that for the period March 24, 2012 to March 31, 2018, it should have 

deducted premiums of $1,390.71 for BLI and $9,718.06 for OLI code 90. OWCP advised that 

instead of this amount, it had deducted $1,390.71 for BLI premiums and $4,294.51 for OLI (J1), 

which created an overpayment of $5,423.55. It requested that appellant complete an overpayment 

recovery questionnaire (Form OWCP-20) and submit supporting financial documentation. 

Additionally, it notified her that within 30 days of the date of the letter she could request a 

telephone conference, a final decision based on the written evidence, or a prerecoupment hearing.

On April 30, 2018 OWCP received an overpayment action request form, dated April 26, 

2018, on which appellant had checked a box requesting a prerecoupment hearing. Appellant also 

indicated that she disagreed with the fact and amount of the overpayment, believed the 

overpayment occurred through no fault of her own, and requested waiver of recovery of the 

overpayment. 

On September 26, 2018 OWCP received an overpayment recovery questionnaire and 

financial evidence including a monthly income, list of expenses, and funds on hand. It also 

received a notification of personnel action, Standard Form (SF-50), dated August 25, 2012, and a 

continuation of life insurance form dated August 17, 2017. The Form SF-50 noted that appellant 

had been terminated from the employing establishment effective March 24, 2012 and that 

appellant had been provided a certification of insurance status. This form also noted that life 

insurance coverage would be extended for 31 days, as appellant was entitled to convert to an 

individual plan. On the August 17, 2017 life insurance form, appellant checked “yes” to BLI, 

option A -- standard option, and option B -- additional optional insurance. She requested a 

summary of her insurance and inserted a question mark on the line for number of reduction 

multiples and number of full reduction multiples. 

Following the hearing, OWCP received a completed overpayment recovery questionnaire 

dated October 3, 2018. Appellant noted monthly income of $3,022.005and $19,300.28 in funds, 

which included $100.00 of cash on hand, $1,014.00 in a checking account, and $18,186.28 in a 

savings account. Monthly expenses totaling $3,800.00 including $1,703.50 in rent or mortgage, 

$744.00 for food, $110.00 for clothing, $493.00 for utilities, $727.00 for other expenses, $100.00 

monthly payment to Bank of America,6 $200.00 for Capital One,7and $200.00 for Citibank.8

By decision dated October 26, 2018, an OWCP hearing representative finalized, as 

modified, the preliminary determination that appellant received an overpayment of compensation 

in the amount of $5,423.55 for the period March 24, 2012 through March 30, 2018.

9

 She found 

that appellant was without fault in the creation of the overpayment of compensation and cited to 

 

5 OWCP records show that appellant receives a net amount of $3,022.64 every 28 days on the periodic rolls.

6 Appellant listed an outstanding balance of $1,213.00. 

7 An outstanding balance of $371.18 was noted on the form. 

8 Appellant listed an outstanding balance of $1,579.58.

9 OWCP’s hearing representative mistakenly noted the date as March 23, 2012. The preliminary notice 

determination of overpayment correctly noted March 24, 2012 as the beginning date. 
4

OWCP’s procedures regarding finding underdeduction of life or health insurance premiums.

10

 

Next, she found that the financial information appellant provided showed that requiring repayment 

would not create a hardship for appellant. The hearing representative directed recovery of the 

overpayment by deducting $300.00 every 28 days from appellant’s continuing compensation 

payments. 

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.11 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.12

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.13 The coverage for basic life 

insurance is effective unless waived,14 and premiums for basic and optional life coverage are 

withheld from the employee’s pay.15 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.16 

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

receiving compensation on or before December 31, 1989.17 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.18

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 

 

10 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Determinations in an Overpayment, 

Chapter 6.300.4(g)(8) (September 2018). 

11 5 U.S.C. § 8129.

12 20 C.F.R. §§ 10.434-10.437; J.L., Docket No. 18-0212 (issued June 8, 2018).

13 5 U.S.C. § 8702(a).

14 Id. at § 8702(b).

15 Id. at § 8707.

16 Id. at § 8706.

17 Id. at § 8707(b)(2).

18 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 the 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 the period July 1983 through November 1989).
5

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).19

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.20 An 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.21 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.22

ANALYSIS -- ISSUE 1

The Board finds that this case is not in posture for decision. 

Appellant received wage-loss compensation from OWCP on the periodic rolls effective 

April 9, 2011. OPM advised OWCP on July 1, 2013 of appellant’s salary for FEGLI purposes and 

noted that she had elected BLI with multiples and full reduction and PRBLI with 75 percent

reduction. 

OWCP’s procedures provide that BLI premiums are deducted from compensation until the 

age of 65.23 A claimant must be enrolled in BLI to be eligible for OLI and premiums for OLI are 

withheld until the age of 65, unless he or she opts to freeze Option B and C.24 Before the age of 

65, a claimant must pay premiums for both BLI and, if elected, PRBLI when separated or retired 

from federal employment.

25

 The employing establishment terminated appellant’s employment 

effective March 24, 2012.

The Board finds that OWCP failed to adequately support its determination that appellant 

received an overpayment of compensation for the period March 24, 2012 to March 31, 2018

because it failed to deduct the correct premiums for BLI and OLI code 90. The record does not 

 

19 See S.P., id.; James J. Conway, Docket No. 04-2047 (issued May 20, 2005).

20 5 C.F.R. § 870.504(a)(1).

21 Id. at § 870.504(b).

22 5 U.S.C. § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997).

23 Federal (FECA) Procedure Manual, Part 2 -- Claims, Compensation Claims, Chapter 2.901.15(c)(1) 

(February 2013).

24 Id. at Chapter 2.0901.15(c)(4); see also V.R., Docket No. 18-0626 (issued October 19, 2018).

25 Id. at Chapter 2.0901.15(c)(3).
6

contain evidence that she signed a document electing PRBLI coverage with 75 percent reduction 

and optional BLI option B x3 and full reduction. OPM informed OWCP on July 1, 2013 that the 

employee had elected PRBLI with 75 reduction and BLI with options and full reduction, but 

provided no supporting documentation establishing such enrollment. The record does not contain

a signed election form showing which coverage she actually selected or if she actually selected 

coverage. The Board has previously found that OWCP must document whether and when a 

claimant elected life insurance coverage after separation from federal service or retirement.26 As 

OWCP has not factually established appellant’s life insurance election, effective March 24, 2012, 

it has not met its burden of proof to establish that she received an overpayment of compensation 

from March 24, 2012 to March 31, 2018.

As the fact and amount of overpayment are not clearly established by the record, the case 

will be remanded to OWCP. On remand, OWCP should obtain an executed election form from 

OPM completed by appellant prior to determining whether she received an overpayment of 

compensation due to its failure to deduct life insurance premiums. After such further development 

as OWCP deems necessary, it should issue a de novo decision.

27

CONCLUSION

The Board finds that the case is not in posture for decision.

 

26 R.F., Docket No. 18-0739 (issued January 2, 2019); D.T., Docket No. 17-0901 (issued January 29, 2018); Glen B. 

Cox, 42 ECAB 703 (1991)

27 In view of the Board’s disposition of the overpayment, the issue of whether OWCP properly denied waiver of 

recovery of the overpayment and the recovery amount are moot.
7

ORDER

IT IS HEREBY ORDERED THAT the decision of the Office of Workers’ Compensation 

Programs dated October 26, 2018 is set aside and the case is remanded for further proceedings 

consistent with this opinion of the Board.

Issued: July 1, 2019

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board