United States Department of Labor

Employees’ Compensation Appeals Board

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R.F., claiming as representative of the estate of 

E.S.

and

DEPARTMENT OF DEFENSE, 

Fort McClellan, AL, Employer

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Docket No. 18-0739

Issued: January 2, 2019

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

CHRISTOPHER J. GODFREY, Chief Judge

PATRICIA H. FITZGERALD, Deputy Chief Judge

ALEC J. KOROMILAS, Alternate Judge

JURISDICTION

On February 22, 2018 appellant filed a timely appeal from a December 19, 2017 merit 

decision 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 over the merits of this case.

ISSUES

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

amount of $21,453.93; and (2) whether OWCP properly denied waiver of recovery of the 

overpayment.

 

1 The employee died on August 5, 2017. Appellant is the employee’s son and personal representative.

2 5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY

On August 29, 1996 the employee, then a 58-year-old stenographer, filed an occupational 

disease claim (Form CA-2) alleging that she sustained hypertension, anxiety, and panic attacks 

causally related to factors of her federal employment. She stopped work on July 2, 1996. OWCP 

accepted the claim for panic disorder with agoraphobia. It paid the employee wage-loss 

compensation for total disability beginning October 4, 1996. 

An October 3, 1996 notification of personnel action (SF-50), indicated that the employee 

elected the standard option for life insurance and the additional option of five multiples. 

The employee, on September 30, 1997, elected to receive wage-loss compensation from 

OWCP in lieu of benefits from the Office of Personnel Management (OPM).

By letter dated January 14, 1998, OWCP placed the employee on the periodic rolls 

effective December 1, 1997. It indicated that it was not deducting premiums for basic life 

insurance (BLI), postretirement basic life insurance (PRBLI), or optional life insurance (OLI). 

OWCP requested that the employee notify it immediately if she had benefits such as OLI that it 

was not deducting from her wage-loss compensation. 

On January 20, 1998 the employee requested that OWCP deduct OLI and health benefit 

premiums from her wage-loss compensation. 

OPM, on January 27, 1998, related in a Form RI 76-13 that the employee’s final salary for 

Federal Employees’ Group Life Insurance (FEGLI) purposes was $26,577.00. It indicated that 

OWCP should withhold premiums for BLI beginning December 1, 1997 with the standard and 

additional options. OPM also advised that the employee had PRBLI with no reduction.3

On May 20, 2003 the employee signed an election form freezing all option B life insurance 

at its value as of age 65, to continue for life. The form notified her that she could cancel or reduce, 

but not increase, the number of elections at any time, but that no premiums would be refunded.

OWCP, on a July 1, 2003 computer printout, indicated that the employee had elected 

PRBLI with no reduction. In an attached worksheet, it noted that she had BLI with no reduction, 

and option B with five multiples. OWCP noted that the employee had turned 65 on July 1, 2003. 

The employee died on August 5, 2017. 

On October 25, 2017 OWCP noted that it had not properly deducted the employee’s life 

insurance premiums. It advised that for the period December 1, 1997 to August 4, 2017, it 

deducted $13,056.00 for BLI premiums and $50,698.79 for miscellaneous deductions, when it 

should have deducted $644.20 for BLI premiums, $13,501.35 for PRBLI premiums, and 

 

3

In a May 1, 2000 fiscal payment worksheet, OWCP calculated the amount that it should have deduced for BLI 

premiums from December 1997 to March 25, 2000 as $280.44. On June 28, 2000 it administratively terminated 

efforts to collect the debt of $280.44 as the costs to recover the debt exceeded the recovery amount. 
3

$71,063.17 for miscellaneous deductions, a difference of $21,453.93.4 OWCP provided a payment 

history showing the deductions that it made from the employee’s wage-loss compensation for the 

period in question.

OWCP, on October 26, 2017, informed appellant of its preliminary determination that the 

employee had received an overpayment of wage-loss compensation because it incorrectly deducted 

premiums for life insurance for the period December 1, 1997 to August 4, 2017. It advised that 

for the period December 1, 1997 through January 11, 2003, it should have deducted premiums of 

$797.86 for OLI Option A, $12,026.57 for OLI Option B, $610.33 for BLI, and $3,839.66 for 

PRBLI. From January 12, 2003 through December 31, 2011, OWCP should have deducted 

premiums of $25,871.14 for OLI Option B, $33.87 for BLI, and $5,764.91 for PRBLI. For the 

period January 1, 2012 through July 31, 2014, it should have deducted premiums of $13,274.74 

for OLI Option B and $1,750.86 for PRBLI. From August 1 through 23, 2014, OWCP should 

have deducted premiums of $399.21 for OLI Option B and $42.66 for PRBLI, from August 24, 

2014 through December 31, 2015, it should have deducted premiums $8,591.79 for OLI Option B 

and $918.09 for PRBLI, and from January 1, 2016 through August 4, 2017, it should have 

deducted premiums of $10,101.86 for OLI Option B and $1,185.17 for PRBLI. It added the 

amount it should have deducted to find a total of $85,208.72. OWCP advised that instead of this 

amount, it had deducted $13,056.00 for BLI premiums and $50,698.79 for other life insurance 

premiums, for a total of $63,752.79, which created an overpayment of $21,453.93. It indicated 

that during the period that it paid the employee, it had estimated the offset for her life insurance 

premiums due to computer software limitations, and that the offset totaled $63,752.79 instead of 

the appropriate deduction for premiums of $85,208.72.

OWCP further notified appellant of its preliminary determination that the employee was 

not at fault in the creation of the overpayment. It requested that he complete the enclosed 

overpayment recovery questionnaire and submit supporting financial documents. Additionally, 

OWCP notified appellant that, within 30 days of the date of the letter, he could request a telephone 

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

On November 30, 2017 appellant telephoned OWCP requesting information regarding the 

preliminary overpayment determination, noting that the estate may not have enough money to 

repay the overpayment. OWCP’s claims examiner advised that he would conduct research and 

“contact him in a few days.” He left appellant a telephone message on December 19, 2017 

indicating that it would in fact need to collect the overpayment.

By decision dated December 19, 2017, OWCP denied waiver of recovery of the 

overpayment in the amount of $21,453.93 that occurred because it had incorrectly deducted the 

employee’s life insurance premiums from December 1, 1997 through August 4, 2017. It noted 

that appellant had not responded to the preliminary overpayment determination other than to 

telephone about possibly reducing the amount of the overpayment. OWCP determined that he 

should forward the entire amount of the overpayment as repayment.

On appeal, appellant advises that he did not know how to complete the overpayment 

recovery questionnaire and did not have all of the employee’s information. He contacted OWCP 

 

4 OWCP is referring to OLI in referencing miscellaneous deductions. 
4

for assistance and a claims examiner explained that he would investigate the situation. Appellant 

subsequently received the December 19, 2017 overpayment determination. He notes that OWCP 

made the mistake and asserts that it was not realistic to expect him to have all the information on 

the employee’s financial situation within 30 days. 

LEGAL PRECEDENT -- ISSUE 1

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

to participate in BLI and one or more of the options.5 The coverage for BLI is effective unless 

waived6and premiums for basic and optional life coverage are withheld from the employee’s pay.7 

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 annuity 

or compensation payments.8 BLI coverage shall be continued without cost to an employee who 

retired or began receiving compensation on or before December 31, 1989.9 However, the 

employee is responsible for payment of premiums for OLI coverage, which is accomplished by 

authorizing withholdings from his or her compensation.10

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. 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 C -- basic 

coverage subject to continuous withholdings from compensation payments with no reductions after 

age 65 (at a greater premium).11

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.12 An employee who 

 

5 5 U.S.C. § 8702(a).

6

Id. at § 8702(b).

7

Id. at § 8707.

8

Id. at § 8706.

9

Id. at § 8707(b)(2).

10 Id. at 8706(b)(3)(B); see D.T., Docket No. 17-0901 (issued January 29, 2018).

11 See S.P., Docket No. 17-1888 (issued July 18, 2018).

12 5 C.F.R. § 870.504(a)(1).
5

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.13 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.14

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.15 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.16

ANALYSIS -- ISSUE 1

The Board finds that OWCP has not established that the employee received an 

overpayment of compensation as it failed to properly deduct life insurance premiums from 

December 1, 1997 to August 4, 2017. The employee received wage-loss compensation from 

OWCP on the periodic rolls effective December 1, 1997. OPM advised OWCP on January 27, 

1998 of the employee’s final salary for FEGLI purposes and noted that she had elected BLI with 

multiples and PRBLI with no reduction. The employee requested on January 20, 1998 that OWCP 

deduct OLI premiums from her wage-loss compensation.

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

age of 65.17 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.18 Before the age of 

65, a claimant must pay premiums for both BLI and, if elected, PRBLI.19 The employee turned 

65 on July 1, 2003. She signed an election form freezing her Option B OLI at its value to continue 

for the duration of her life. 

OWCP deducted $13,056.00 for BLI premiums and $50,698.79 in miscellaneous 

deductions from December 1, 1997 to August 4, 2017. It subsequently calculated that it should 

have deducted $644.20 for BLI premiums, $13,501.35 in PRBLI premiums, and an additional 

$71,063.17 for miscellaneous deductions, which it found created an overpayment of $21,453.93. 

 

13 Id. at § 870.504(b).

14 5 U.S.C. § 8707(d); see also S.P., supra note 11; Keith H. Mapes, 56 ECAB 130 (2004).

15 Id. at § 8102(a).

16 20 C.F.R. §§ 10.434-10.437.

17 Federal (FECA) Procedure Manual, Part 2 -- Claims, Compensation Claims, Chapter 2.0901.15(c)(1) 

(February 2013).

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

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

For the period December 1, 1997 to August 4, 2017, OWCP deducted $13,056.00 for 

deducted BLI premiums when it should have deducted only $644.20. The employee, 

consequently, did not receive an overpayment due to OWCP’s failure to adequately deduct 

premiums for BLI.

The Board further finds that OWCP failed to adequately support its determination that the 

employee received an overpayment from December 1, 1997 through August 4, 2017 because it 

failed to deduct premiums for PRBLI. The record does not contain evidence that she signed a 

document electing PRBLI with no reduction. OPM informed OWCP on January 27, 1998 that the 

employee had elected PRBLI with no reduction, but provided no supporting documentation 

establishing such enrollment. The record does not contain a signed election form showing which 

coverage she actually selected. The Board has previously found that OWCP must document 

whether and when a claimant elected life insurance coverage after retirement.20 As OWCP has 

not factually established that the employee elected PRBLI with no reduction, it has not met its 

burden of proof to establish that she received an overpayment of compensation based on its failure 

to deduct premiums for PRBLI from December 1, 1997 through August 4, 2017.21

As noted, the record supports that the employee elected OLI and froze her election of OLI 

when she reached age 65. A computer payment inquiry report indicates that OWCP deducted OLI 

premiums from October 4, 1996 to December 6, 1997 and March 23 to May 17, 2003. From 

December 7, 1997 to March 22, 2003, May 18 to June 14, 2003, and October 4, 2003 to August 6, 

2005, it did not deduct premiums for OLI. From June 15 to October 4, 2003 and August 7, 2005 

to August 4, 2017, OWCP did not deduct premiums for OLI, but made deductions from the 

employee’s wage-loss compensation that it labeled as “miscellaneous.” It asserted that it had 

deducted $50,698.79 during the period of the overpayment under miscellaneous deductions as an 

estimate of life insurance premiums. OWCP deducted the $50,698.79 from the amount that it 

found it should have withheld from the employee’s compensation for OLI and PRBLI during the 

period of the overpayment. The Board, however, is unable to ascertain the amount of any

overpayment that arose from OWCP’s failure to properly deduct OLI premiums as it is not 

specifically supported by computer records identifying OLI deductions. OWCP did not provide 

adequate documentation demonstrating whether or to what extent the miscellaneous deductions 

were for OLI premiums. It, consequently, failed to support its finding that the employee received 

an overpayment due to its failure to adequately deduct premiums for OLI.22

As 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 the employee prior to determining whether she received an overpayment of 

compensation due to its failure to deduct premiums for PRBLI.

23

 It should further provide 

supporting evidence identifying the miscellaneous deductions made from the employee’s wage-

 

20 See D.T., supra note 10.

21 See R.U., Docket No. 16-0027 (issued March 24, 2016).

22 See generally V.R., supra note 18; R.U., id.

23 See G.T., Docket No. 16-0042 (issued July 15, 2016).
7

loss compensation. After such further development as OWCP deems necessary, it should issue a 

de novo decision.24

CONCLUSION

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

received an overpayment of compensation.

ORDER

IT IS HEREBY ORDERED THAT the December 19, 2017 decision of the Office of 

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

consistent with this opinion of the Board.

Issued: January 2, 2019

Washington, DC

Christopher J. Godfrey, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Alec J. Koromilas, Alternate Judge

Employees’ Compensation Appeals Board

 

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

recovery of the overpayment is moot.