United States Department of Labor

Employees’ Compensation Appeals Board

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J.C., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Cincinnati, OH, Employer

__________________________________________

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Docket No. 17-1791

Issued: February 23, 2018

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

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On August 21, 2017 appellant, through counsel, filed a timely appeal from a July 12, 

2017 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 $1,280.18 for the period June 25, 2016 through April 29, 2017 because OWCP failed 

to deduct premiums for postretirement basic life insurance (PRBLI) from his wage-loss 

compensation; and (2) whether OWCP properly denied waiver of recovery of the overpayment.

FACTUAL HISTORY

On September 19, 1995 appellant, then a 32-year-old mail handler, filed a recurrence of 

disability claim (Form CA-2a) alleging that on that date he sustained a recurrence of disability 

 

1 5 U.S.C. § 8101 et seq.
2

causally related to an accepted August 22, 1995 employment injury.2 OWCP determined that his 

claim should be adjudicated as a traumatic injury claim and assigned File No. xxxxxx648. It 

accepted the claim for strains of the lateral collateral ligament and anterior cruciate ligament of 

the right knee, right knee chondromalacia, a right medial meniscus tear, an infection and 

inflammatory reaction due to internal right knee prosthesis, and other mechanical complications 

of internal right knee prosthesis.3

Following his employment injury, appellant sustained intermittent periods of total 

disability.4 In June 2015 he stopped work and did not return. OWCP paid appellant wage-loss 

compensation for total disability beginning June 22, 2015. 

On November 29, 2016 the Office of Personnel Management (OPM) related that 

appellant had elected PRBLI with no reduction as of June 25, 2016. Effective April 30, 2017, 

OWCP began deducting premiums for PRBLI from his wage-loss compensation. 

OWCP, by letter dated May 22, 2017, notified appellant of its preliminary determination 

that it overpaid him wage-loss compensation in the amount of $1,280.18 because he elected 

PRBLI with no reduction beginning June 25, 2016, but it did not deduct the premiums until 

April 30, 2017. It calculated the overpayment by determining the amount of PRBLI it should 

have deduced from his wage-loss compensation from June 25, 2016 to April 29, 2017. OWCP 

further advised appellant of its preliminary determination that he was without fault in creating 

the overpayment. It requested that he complete the enclosed overpayment recovery 

questionnaire (OWCP-20) 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. 

In an overpayment action request form completed June 1, 2017, appellant requested a 

telephone conference with OWCP regarding the overpayment. He asserted that he was without 

fault in creating the overpayment and requested waiver of recovery. In an accompanying 

OWCP-20 form, appellant indicated that he received income of $1,062.00 from the Department 

of Veterans Affairs (DVA) monthly and also provided his monthly expenses. He listed assets of 

$23,439.00, noting that he was saving to purchase a house. Appellant indicated that he made 

monthly support payments to a minor son and his former spouse. 

On June 27, 2017 appellant elected to receive benefits under the DVA in lieu of workers’

compensation benefits effective that date. 

 

2 Appellant previously filed a notice of traumatic injury (Form CA-1) alleging that he twisted his right knee on 

August 22, 1995. OWCP assigned the claim File No. xxxxxx366 and administratively closed the case. 

3 On June 13, 2000 OWCP accepted that appellant sustained right carpal tunnel syndrome, assigned File No. 

xxxxxx201. On September 18, 2006 it accepted that he sustained bilateral carpal tunnel syndrome under File No. 

xxxxxx915. These other claims have been administratively combined with the present claim, OWCP File No. 

xxxxxx648, which serves as the master file.

4 By decision dated June 16, 1998, OWCP granted appellant a schedule award for seven percent permanent 

impairment of the right lower extremity. In decisions dated September 29 and November 20, 2008, it denied his 

request for an increased permanent impairment. 
3

OWCP advised appellant that it had scheduled a telephone conference on July 12, 2017 

to address whether he was entitled to waiver of recovery of the overpayment and, if not, 

arranging repayment. It requested that he submit verification of his income and expenses.

In a July 12, 2017 memorandum of conference, OWCP informed appellant that he did not 

qualify for waiver of recovery of the overpayment due to his assets. It recommended that he 

submit $20.00 per month as repayment of the overpayment. OWCP noted that appellant had 

asked OPM to change his PRBLI coverage to 75 percent reduction.

By decision dated July 12, 2017, OWCP found that appellant had received an 

overpayment of compensation in the amount of $1,280.18 for the period June 25, 2016 through 

April 29, 2017 because it failed to deduct premiums for PRBLI from his wage-loss compensation 

benefits. It further determined that he was without fault in creating the overpayment, but denied 

waiver of recovery of the overpayment based on his liquid assets of $23,439.00. OWCP found 

that appellant should submit $20.00 per month as repayment of the overpayment.

On appeal appellant notes that it took OWCP over a year to process his life insurance, 

causing a significant overpayment. He questions why he has to repay the overpayment given 

that he was without fault in its creation.

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.5 The coverage for 

basic life insurance 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 Basic life insurance 

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 continuing 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 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 

 

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 Edward J. Shea, 43 ECAB 1022 (1992).
4

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

 Any employee who 

does not file a life insurance election form with his 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 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.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

OPM notified OWCP on November 29, 2016 that appellant had elected PRBLI with no 

reduction effective June 25, 2016. OWCP, however, did not deduct premiums for PRBLI from 

his wage-loss compensation until April 30, 2017. It calculated the amount of the resulting 

overpayment as $1,280.18. As noted, 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.17

 

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

12 5 C.F.R. § 870.504(a)(1).

13 Id. at § 870.504(b).

14 Id. at § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997).

15 Id. at § 8102(a).

16 5 U.S.C. § 8129.

17 Supra note 15.
5

As OWCP failed to deduce PRBLI premiums from June 25, 2016 through April 29, 2017, 

appellant received an overpayment of compensation of $1,280.18 during this period.18 The 

Board also notes that he does not contest fact or amount of the overpayment.19

LEGAL PRECEDENT -- ISSUE 2

Section 8129 of FECA provides that an overpayment of 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.”

20

 Section 10.438 of OWCP regulations provides that the 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 

of 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 denial of 

waiver.21

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.22

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.23 An individual is 

deemed to need substantially all or his or her current income to meet current ordinary and 

necessary living expenses if monthly income does not exceed monthly expenses by more than 

$50.00.24

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.25 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 

 

18 See E.H., Docket No. 15-0848 (issued July 6, 2016); V.B., Docket No. 15-0157 (issued March 16, 2015).

19 See J.H., Docket No. 15-1385 (issued October 27, 2015).

20 5 U.S.C. § 8129.

21 20 C.F.R. § 10.438.

22 5 U.S.C. § 10.434-10.437.

23 20 C.F.R. § 10.436

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

6.200.6.a(1)(b) (June 2009).

25 Id.
6

assets include, but 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.26

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.27 The Board finds 

that OWCP properly denied waiver of recovery of the overpayment of compensation. 

Appellant has not established that recovery of the overpayment would defeat the purpose 

of FECA as he has not shown that his assets do not exceed the allowable resource base.28 On the 

completed overpayment recovery questionnaire, he indicated that he had checking accounts, 

savings accounts, stocks, and bonds totaling $23,439.00. Appellant also claimed his minor son, 

for whom he provided monthly support payments, as a dependent, for an applicable resource 

base of $8,000.00.29 As his assets exceed the $8,000.00 resource base, he has not shown that 

recovery of the overpayment would defeat the purpose of FECA.

30

 Because appellant has not 

met the second prong of the two-prong test of whether recovery of the overpayment would defeat 

the purpose of FECA, it is unnecessary to consider whether his monthly income exceeded his 

monthly ordinary and necessary expenses by more than $50.00.31

Recovery of an overpayment is also considered to be against equity and good conscience 

when any individual, in reliance on such payments or on notice that such payments would be 

made, gives up a valuable right or changes his position for the worse.32 OWCP procedures 

provide that to establish that a valuable right has been relinquished, it must be shown that the 

right was in fact valuable, that it cannot be regained and that the action was based chiefly or 

solely in reliance on the payments or on the notice of payment.33 

Appellant submitted no evidence to show that he gave up a valuable right or changed his 

position for the worse in reliance on anticipated compensation payments. Thus, he has not 

shown that, if required to repay the overpayment, he would be in a worse position after 

repayment than if he had never received the overpayment at all. OWCP, therefore, properly 

 

26 Id.

27 Supra note 22; see also M.H., Docket No. 17-0766 (issued July 3, 2017).

28 Supra note 24.

29 Appellant claimed his former wife as a dependent but the definition of a dependent does not include an ex-wife. 

See 5 U.S.C. § 8110(a)(1); K.H., Docket No. 07-2265 (issued April 28, 2008).

30 Supra note 25.

31 See C.M., Docket No. 08-1119 (issued May 13, 2009).

32 20 C.F.R. § 10.437; see W.P., 59 ECAB 514 (2008).

33 Supra note 24 at Chapter 6.200.6b(3) (June 2009).
7

determined that appellant was not entitled to waiver as that recovery would be against equity and 

good conscience.34

On appeal appellant notes that actions by OWCP resulted in a large overpayment and 

questions why he has to repay the overpayment since he was not at fault in its creation. As 

discussed, however, he is not entitled to waiver even though he was without fault in creating the 

overpayment as his assets exceed the applicable resource base. 

CONCLUSION

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

of $1,280.18 because OWCP failed to deduct premiums for PRBLI for the period June 25, 2016 

until April 30, 2017 from his wage-loss compensation. The Board further finds that OWCP 

properly denied waiver of recovery of the overpayment.35

ORDER

IT IS HEREBY ORDERED THAT the July 12, 2017 decision of the Office of 

Workers’ Compensation Programs is affirmed.

Issued: February 23, 2018

Washington, DC

Christopher J. Godfrey, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board

 

34 See M.H., supra note 27.

35 With respect to the recovery of an overpayment, the Board’s jurisdiction is limited to those cases where OWCP 

seeks recovery from continuing compensation benefits. D.R., 59 ECAB 148 (2007); Miguel A. Muniz, 54 ECAB 

217 (2002). As appellant was not in receipt of continuing compensation at the time of OWCP’s overpayment 

determination, the Board does not have jurisdiction over the method of recovery of the overpayment in this case. 

See Lorenzo Rodriguez, 51 ECAB 295 (2000); 20 C.F.R. § 10.441.