United States Department of Labor

Employees’ Compensation Appeals Board

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J.R., Appellant

and

DEPARTMENT OF HOMELAND SECURITY, 

PEACE ARCH PORT OF ENTRY, Blaine, WA, 

Employer

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Docket No. 21-0631

Issued: July 21, 2022

Appearances: Case Submitted on the Record

Robert E. Abbacy, Esq., for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

ALEC J. KOROMILAS, Chief Judge

PATRICIA H. FITZGERALD, Deputy Chief Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On March 12, 2021 appellant, through his representative, filed a timely appeal from an 

October 14, 2020 merit decision of the Office of Workers’ Compensation Programs (OWCP).2 

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 Appellant passed away on July 15, 2021, after the filing of this appeal. As such, a substitute appellant is required 

to carry the appeal forward as the Board’s jurisdiction was invoked during his lifetime. See J.W., Docket No. 20-0952 

(issued February 2, 2022); D.V., Docket No. 20-1291 (issued September 14, 2021); N.D., Docket No. 14-1757 (issued 

June 2, 2015); Albert F. Kimbrell, 4 ECAB 662, 666 (1952). Accordingly, appellant’s daughter, R.S., is recognized 

by the Board as the substitute appellant for the purposes of carrying the appeal forward.
2

Pursuant to the Federal Employees’ Compensation Act3(FECA) and 20 C.F.R. §§ 501.2(c) and 

501.3, the Board has jurisdiction over the merits of this case.4

ISSUES

The issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation, in the amount of $129,922.53, for which he was without fault, for 

the period September 1, 1999 through December 17, 2019 because optional life insurance (OLI) 

premiums were underwithheld from his FECA compensation; (2) whether OWCP properly denied 

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

overpayment by deducting $1,846.15 every 28 days from appellant’s continuing compensation 

benefits. 

FACTUAL HISTORY

This case has previously been before the Board on a different issue.

5

 The facts and 

circumstances as set forth in the Board’s prior decision are incorporated herein by reference. The 

relevant facts are as follows. 

On January 17, 1989 appellant, then a 54-year-old senior criminal investigator, filed an 

occupational disease claim (Form CA-2) alleging that his heart condition was caused or aggravated 

by the stressful demands of his job. He stopped work on December 16, 1988. OWCP accepted 

the claim for anteroseptal myocardial infraction and paid appellant wage-loss compensation on the 

periodic compensation rolls, effective June 16, 2002.

In a November 29, 1999 letter, the Office of Personnel Management (OPM) noted that, per 

appellant’s request, it froze his Option B OLI coverage under the Federal Employees’ Group Life 

Insurance (FEGLI) effective September 1, 1999. Included with the letter was a November 5, 1999 

form letter signed by appellant, which inquired about his life insurance coverage under FEGLI,

and a November 29, 1999 copy of the computation of his FEGLI coverage, which noted that 

Option B – additional life insurance coverage was frozen at $112,000.00, the amount of insurance 

before reduction.6 A copy of appellant’s election form was not received.

In a letter dated June 18, 2008, OWCP indicated that appellant’s annual salary was 

$58,000.00 for the purpose of calculating life insurance premiums. It explained how appellant’s 

3

5 U.S.C. § 8101 et seq.

4 The Board notes that following the March12, 2021 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.

5 Docket No. 06-1840 (issued May 9, 2007). 

6 Appellant’s final base salary was listed as $58,000.00. His post-retirement basic life insurance (PRBLI) was no 

reduction zero percent.His OLI was Option B, 2 times no reduction, and Option C, 1 time with full reduction. 
3

Option B OLI premium, which it manually processed in its data system, was calculated to be set 

at $156.80 every 28 days. 

In a December 18, 2019 letter, OWCP indicated that appellant’s net compensation every 

28 days was $4,881.94, which included OLI premium deduction Code M1 of $156.80. A copy of 

appellant’s compensation payment history from December 13, 2015 through December 7, 2019

was included, which noted miscellaneous deductions, the category under which OLI Code M1 

would be, totaled $8,153.60 at the rate of $156.80 every periodic payment.

In a separate letter of even date, OWCP indicated that appellant’s correct net compensation 

received every 28 days was $4,422.33, which included an OLI deduction Code M1 of $612.48. It 

advised that additional information on the updated OLI deduction would be provided as it had not

been calculated with the appropriate increases every five years as of appellant’s birth month. 

In a December 18, 2019 manual adjustment form, OWCP indicated that, for the period 

September 1, 1999 through December 7, 2019, appellant had premiums deducted totaling

$71,883.25, but should have had deductions totaling $201,805.78, which resulted in an 

overpayment of $129,922.53. Separate worksheets were provided. One worksheet noted post-age 

65 deduction periodfor Option B multiples of 2 with no reduction from September 1, 1999 through 

December 7, 2019 and a total premium of $201,805.78. This worksheet did not provide a complete 

summary of rates and deductions that should have been made from September 1, 1999 through 

December 7, 2019. A miscellaneous deduction worksheet noted Option B Freeze Withholding

rate from March 3, 2019 was $156.80. A deductions/net summary worksheet noted a gross 

compensation amount of $5,449.00 and a net amount of $4,881.94, following withholding of 

premiums for health benefits insurance (HBI) of $296.22, post-retirement basic life insurance 

(PRBLI) of $114.04, and miscellaneous deductions of $156.80. 

On February 4, 2020 OWCP notified appellant of its preliminary overpayment 

determination that he received an overpayment of compensation for which he was without fault,

in the amount of $129,922.53 for the period September 1, 1999 through December 7, 2019 because 

his OLI premiums for Code M1 were frozen for a significant period of time. It explained that,

while it continued to deduct $156.80 every 28 days during that period, the premium deductions

should have increased as he got older. OWCP noted that an increase in premiums was not applied 

to his FECA compensation each time there was an increase in the premium, and that the premiums 

due had increased significantly after 1999. It advised that the current premium for his OLI Code 

M1 was $612.48 every 28 days. OWCP provided calculation that the difference of the $71,883.25 

withheld for Code M1 when OLI wasfrozen in 1999 and the $201,805.78,which should have been 

withheld for Code M1, resulted in a total overpayment of $129,922.53. It forwarded an

overpayment recovery questionnaire (Form OWCP-20). OWCP requested that he complete the 

questionnaire and provide supporting financial documentation, including income tax returns, bank 

account statements, bills, cancelled checks, pay slips, and any other records to support his reported 

income and expenses. It advised appellant that it would deny waiver of recovery of the 

overpayment if he failed to furnish the requested financial information within 30 days. OWCP

provided an overpayment action request form and further notified him that, within 30 days of the 

date of the letter, appellant could contest the overpayment and request a telephone conference, a 

final decision based on the written evidence, or a prerecoupment hearing.
4

On February 15, 2020 appellant requested a prerecoupment hearing on the issues of a 

possible waiver of recovery of the overpayment with OWCP’s Branch of Hearings and Review. 

In an attached Form OWCP-20 dated January 15, 2020, he reported a total monthly income for his 

household of $5,219.117 and recurring monthly expenses of $3,227.81.8 Appellant noted that he 

had over $5,500.00 in a checking account and $52,258.69 in a savings account. Supporting 

financial documentation of the mortgage expense was provided; no other income or expenses were 

received.

A telephonic hearing was held on September 8, 2020. OWCP’s hearing representative 

explained that the incorrect premiums for Option B OLI Code M1 were withheld, which resulted 

in no age-based changes to the premiums, which hadincreased and should have been applied every 

five years as appellant aged. Appellant’s wife summarized the monthly household income and 

expenses, noting that $10,000.00 was owed on a bathroom remodel for which they paid $131.70 a 

month. The hearing representative noted that, since there was over $2,400.00 available in funds 

each month, she proposed a voluntary repayment plan of $2,000.00 monthly or $1,846.15 per 28 

days, to which appellant and his wife agreed. The hearing representative further instructed 

appellant that if he wished to withdraw from the voluntary repayment plan, then he needed to 

submit documented household financesso a repayment plan based on the financials could be done. 

The record was held open for 30 days for the submission of additional evidence. No additional 

response from appellant or additional evidence was received.

By decision dated October 14, 2020, OWCP’s hearing representative finalized OWCP’s

preliminary overpayment determination, finding that appellant received an overpayment of 

compensation in the amount of $129,922.53 for the period September 1, 1999 through 

December 7, 2019, due to underdeduction of OLI premiums. The hearing representative further 

found that appellant was without fault in the creation of the overpayment, but denied waiver of 

recovery of the overpayment because the evidence of record was insufficient to establish that 

recovery would defeat the purpose of FECA or would be against equity and good conscience. In 

assessing a repayment schedule, the hearing representative required recovery of the overpayment 

by deducting $1,846.15 from appellant’s continuing compensation payments every 28 days. 

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.9 When an overpayment has been made to an individual because of an error 

7 This included a monthly income of $4,407.51 and Social Security Administration benefits of $811.60, for a total 

of $5,219.11. 

8 This included $1,915.57 for mortgage, $460.00 for food, $200.00 for clothing, $452.24 for utilities, and $200.00 

for miscellaneous household expenses and medical, dental, and transportation expenses. 

9

5 U.S.C. § 8129.
5

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.10

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.11 The coverage for basic life 

insurance is effective unless waived,12 and premiums for basic and optional life coverage are 

withheld from the employee’s pay.13 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. 14 

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

receiving compensation on or before December 31, 1989.15 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.16

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 

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).17

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 

10 20 C.F.R. §§ 10.434-10.437; J.L.,Docket No. 18-0212 (issued June 8, 2018).

11 5 U.S.C. § 8702(a).

12 Id. at § 8702(b).

13 Id. at § 8707.

14 Id. at § 8706.

15 Id. at § 8707(b)(2).

16 Id. at § 8706(b)(3)(B). See S.P., Docket No. 17-1888 (issued July 18, 2018); EdwardJ. Shea, 43 ECAB 1022 

(1992) (the Board found that 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 OLI for the period July 1983 through November 1989).

17 See S.P., id.; James J. Conway, Docket No. 04-2047 (issued May 20, 2005).
6

employment, he or she filed an election or waiver that remains in effect.18 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.19 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.20

ANALYSIS -- ISSUE 1

The Board finds that OWCP improperly determined that appellant received an 

overpayment of compensation in the amount of $129,922.53 for the period September 1, 1999 

through December 17, 2019 for which he was without fault.

OWCP found that an overpayment of compensation in the amount of $129,922.53 was 

created because OLI premiums were underwithheld from his FECA compensation for the period 

September 1, 1999 through December 17, 2019. 

The Board finds, however, that OWCP failed to adequately support its determination that 

appellant received a $129,922.53 overpayment due to its failure to properly deduct premiums for 

Option B OLI. While the record includes communications from OPM regarding appellant’s OLI 

coverage, the record does not contain evidence establishing that appellant affirmatively signed a 

document electing Option B OLI coverage. The record does not contain a signed election form 

showing which coverage he actually selected or if he 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 in order to establish the fact of 

overpayment of compensation.21 As OWCP has not factually established appellant’s election of 

OLI on the relevant dates, it has not met its burden of proof to establish that a $129,992.53 

overpayment was created for the period September 1, 1999 through December 17, 2019 as 

alleged.22

The Board, therefore, finds that OWCP did not meet its burden of proof to establish that 

an overpayment of compensation occurred.23

18 5 C.F.R. § 870.504(a)(1).

19 Id. at § 870.504(b).

20 5 U.S.C. § 8707(d); see also V.H., Docket No. 18-1124 (issued January 16, 2019); KeithH. Mapes, 56 ECAB 

130 (2004); James Lloyd Otte, 48 ECAB 334 (1997).

21 J.P.(J.P.), Docket No. 18-1194 (issued April28, 2020); P.K.,Docket No. 18-0913 (issued March 5, 2020);C.P.,

Docket No. 19-0317 (issued July 1, 2019); R.F.,(E.S.), Docket No. 18-0739 (issued January 2, 2019); D.T.,Docket 

No. 17-0901 (issued January 29, 2018).

22 J.P. (J.P.), id.; R.F.(E.S.), id.

23 In light of the Board’s disposition of Issue 1, Issues 2 and3 are rendered moot.
7

CONCLUSION

The Board finds that OWCP improperly determined that appellant received an 

overpayment of compensation in the amount of $129,992.53 for the September 1, 1999 through 

December 17, 2019.

ORDER

IT IS HEREBY ORDERED THAT the October 14, 2020 decision of the Office of 

Workers’ Compensation Programs is reversed.

Issued: July 21, 2022

Washington, DC

Alec J. Koromilas, 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