United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

M.M., Appellant

and

DEPARTMENT OF THE NAVY, 

PORTSMOUTH NAVAL SHIPYARD, 

Portsmouth, NH, Employer

__________________________________________

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Docket No. 19-1782

Issued: April 2, 2020

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

JANICE B. ASKIN, Judge

PATRICIA H. FITZGERALD, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On August 22, 2019 appellant filed a timely appeal from a March 27, 2019 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.2

 

1

5 U.S.C. § 8101 et seq.

2 The Board notes that,following the March27, 2017 decision, OWCP received additional evidence. However, the 

Board’s Rules ofProcedure 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 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 $13,688.05 for the period September 15, 2006 through January 5, 2019, for which he 

was without fault; and (2) whether OWCP properly denied waiver of recovery of the overpayment.

FACTUAL HISTORY

On July 13, 2004 appellant, then a 46-year-old marine machinery mechanic, filed a 

traumatic injury claim (Form CA-1) alleging that he tore his left knee quadratic tendon when he 

fell when climbing off a boat while in the performance of duty. OWCP accepted the claim for left 

quadriceps tendon rupture and repair. It paid appellant wage-loss compensation on the 

supplemental rolls as of August 17, 2004 and on the periodic rolls as of October 1, 2006. 

In a January 3, 2019 letter, the Office of Personnel Management (OPM) notified OWCP 

that as a compensationer appellant was eligible to continue Federal Employee Life Insurance 

(FEGLI) coverage. It requested that OWCP deduct for code E4 basic Option C times 4 no 

reduction, and indicated that appellant’s postretirement election was “no reduction.” OPM related 

that the commencing date for the postretirement deduction was September 15, 2006. It forwarded 

a September 2, 2008 retirement operations center form which related that appellant’s annuity 

commencing date was September 15, 2006 and that he carried basic life insurance, optional family 

life insurance (option Cat no reduction with 4 multiples), and postretirement basic life at no 

reduction. 

In a letter addressed to appellant dated January 3, 2019, OPM related that, as long as 

OWCP found that he was unable to return to work and he continued to receive compensation 

benefits, his life insurance coverage would continue as follows: based on the base salary of 

$40,633.89; deductions for basic life insurance and Option C (4 times, no reduction). It noted that 

his postretirement election was no reduction and the commencing date for postretirement 

deductions was September 15, 2006. 

OWCP also received a FEGLI form entitled Continuation of Life Insurance Coverage as 

an annuitant or compensationer, which was signed by appellant on May 14, 2007. This form 

indicated that he selected basic life insurance, Option A standard optional life insurance, additional 

Option B with 50 multiples ($50,000.00 maximum) with no reduction, and Option C family 

optional insurance with times 4 times, no reduction. 

In a letter dated January 29, 2019, OWCP notified appellant that his compensation was 

being adjusted to reflect the correct life insurance deduction amounts reported by OPM, beginning 

February 2, 2019. Appellant was advised that he would receive a letter addressing the 

overpayment as the deductions were being made retroactively. 

By letter dated February 13, 2019, OWCP notified appellant of his entitlement to 

compensation benefits effective January 6, 2019. The letter indicated that deductions were being 

made for basic life insurance in the amount of $12.90, postretirement basic life insurance in the 

amount of $84.54, and optional life insurance, in the amount of $21.60.
3

By notice dated February 22, 2019, OWCP advised appellant of its preliminary 

determination that an overpayment of compensation occurred in the amount of $13,688.05, for the 

period September 15, 2006 through January 5, 2019, because no deductions were made for 

postretirement basic life insurance. It found that he was without fault in the creation of the 

overpayment because OWCP erred in calculating the benefits, and that it was not shown that he

had actual knowledge of the calculation error. OWCP advised appellant of his right to request a 

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

if he objected to the decision or requested waiver of the recovery of the overpayment. It further 

advised him to complete an overpayment recovery questionnaire (Form OWCP-20) and submit 

supporting financial documentation. OWCP mailed the preliminary determination to appellant’s 

address of record and afforded him 30 days to provide the requested information.

On March 19, 2019 OWCP received the first page of the overpayment action request form. 

Appellant requested a waiver of recovery of the overpayment, noted that he “did not know” that 

there was an overpayment, and indicated that he would suffer a financial hardship. No financial 

information or documentation accompanied his waiver request.

By decision dated March 27, 2019, OWCP finalized its preliminary determination that 

appellant had received an overpayment of compensation in the amount of $13,688.05, for the 

period September 15, 2006 through January 5, 2019, because postretirement life insurance 

premiums were not properly deducted from his compensation payments for that period. It found 

that he was without fault in the creation of the overpayment; however, OWCP denied waiver of 

recovery because he did not respond to the overpayment recovery questionnaire and provide 

supporting financial documentation. OWCP directed appellant to repay the $13,688.05 

overpayment in full.

LEGAL PRECEDENT -- ISSUE 1

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 his or her duty. 3 

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.4

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

participate in basic life insurance and one or more of the optional life insurance options.5 The 

 

3

5 U.S.C. § 8102(a).

4

Id. at § 8129(a).

5

Id. at § 8702(a).
4

coverage for basic life insurance is effective unless waived6 and the premiums for basic life 

insurance and optional life insurance coverage are withheld from the employee’s pay.7

A 1980 amendment of 5 U.S.C. § 8706(b)(2) provides 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) provides 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).8

When an underwithholding of life insurance premiums occurs, the entire amount is deemed 

an overpayment because OWCP must pay the full premium to OPM upon discovery of the error.9

ANALYSIS -- ISSUE 1

The Board finds that OWCP has not established that appellant received an overpayment of 

compensation in the amount of $13,688.05 during the period September 15, 2006 through 

January 5, 2019.

The record reflects that OPM notified OWCP on January 3, 2019 that, as a compensationer 

appellant was eligible to continue FEGLI coverage, it requested that OWCP deduct under code E4 

basic Option C times 4 no reduction and postretirement election no reduction commencing 

September 15, 2006. OWCP calculated the amount of the underwithholding and resulting 

overpayment to be $13,688.05, as it had not commenced deduction of premiums as of 

September 15, 2006. However, the record does not reflect appellant’s life insurance election as of 

September 15, 2006. A FEGLI form he signed on May 14, 2007 selected basic life insurance, 

Option A standard life insurance, Option B additional life insurance x 50 ($50,000.00 maximum) 

with no reduction, and Option C family optional life insurance times 4, with no reduction. This 

form is the only document of record bearing appellant’s signature and it does not document his life 

insurance elections as of September 15, 2006. Furthermore, the elections appellant made on 

May 14, 2007 are not subsequently addressed on any OPM form or OWCP decision and differ 

from the elections shown on OPM letters and forms dated September 2, 2008 and January 3, 2019. 

OPM acknowledged in its letter to appellant dated January 3, 2019 that conflicting 

information had been provided to OWCP regarding his life insurance elections. However, neither 

 

6

Id. at § 8702(b).

7

Id. at § 8707.

8

See V.H., Docket No. 18-1124 (issued January 16, 2019).

9

5 U.S.C. § 8707(d). See KeithH. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997).
5

it nor OWCP clarified the evidence of record prior to finalizing the overpayment determination. 

Appellant’s life insurance election choice was therefore not established.10

Based upon the current record, the Board is therefore unable to verify fact and amount of 

the overpayment due to under deduction of FEGLI premiums during the period September 15,

2006 through January 5, 2019. The Board thus finds that OWCP improperly determined that 

appellant received an overpayment of compensation in the amount of $13,688.05.11

CONCLUSION

The Board finds that OWCP has not established that appellant received an overpayment of 

compensation in the amount of $13,688.05 for the period September 15, 2006 through 

January 5, 2019. 

ORDER

IT IS HEREBY ORDERED THAT the March 27, 2019 decision of the Office of 

Workers’ Compensation Programs is reversed.

Issued: April 2, 2020

Washington, DC

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board

 

10 Supra note 8.

11 In light of the Board’s disposition of issue 1, the second issue regarding waiver of recovery of the overpayment 

is moot.