United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

P.K., Appellant

and

U.S. POSTAL SERVICE, GENERAL MAIL 

FACILITY, Denver, CO, Employer

__________________________________________

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Docket No. 18-0913

Issued: March 5, 2020

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

ALEC J. KOROMILAS, Chief Judge

PATRICIA H. FITZGERALD, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On March 27, 2018 appellant filed a timely appeal from a February 14, 2018 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

ISSUES

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

amount of $7,028.56 during the period January 10, 2016 through September 16, 2017, for which 

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

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that following the February 14, 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

and (3) whether OWCP properly required recovery of the overpayment by deducting $250.00 

every 28 days from appellant’s continuing compensation payments.

FACTUAL HISTORY

On February 26, 1996 appellant, then a 47-year-old senior Equal Employment Opportunity 

(EEO) complaint processing specialist, filed an occupational disease claim (Form CA-2) alleging 

that she sustained an emotional condition while in the performance of duty. OWCP accepted her

claim for acute post-traumatic stress disorder and anxiety disorder. Appellant stopped work on

January 26, 1996 and did not return. OWCP paid wage-loss compensation benefits on the periodic 

compensation rolls as of January 27, 1997. 

In a June 7, 2016 letter to OWCP, the Office of Personnel Management (OPM) advised 

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

Insurance (FEGLI) coverage in the form of Postretirement Basic Life Insurance (PRBLI) and 

Optional Life Insurance (OLI). It noted that the final base salary on which FEGLI is based was

$57,136.00 and the commencing date for the PRBLI deduction was April 11, 1997. OPM advised 

OWCP to “CONTINUE THE OPTION B AND OPTION C PREMIUMS.” (Emphasis in the 

original.) It noted that basic and optional coverage premiums began on OWCP’s commencing 

date. 

In a letter dated December 14, 2016, appellant requested a breakdown of her deductions, 

by category. OWCP provided a copy of a benefit statement advising her that deductions in the 

amount of $309.61 were being withheld from her gross compensation every 28 days. 

In a letter dated January 18, 2017, OWCP advised that appellant’s deductions were:

$136.96 for health insurance; $117.97 for PRBLI; $42.00 for dental insurance; and $12.68 for 

vision insurance.

3

 It related that the deductions totaled $309.61. 

In a July 19, 2017 memorandum of telephone call (Form CA-110), appellant contacted 

OWCP regarding her postretirement life insurance. OWCP’s claims examiner explained that they 

were deducting PRBLI premiums; however, the other deductions stopped at age 65. He advised 

appellant to contact OPM for specific coverage amounts. 

In a September 22, 2017 memorandum of telephone call (Form CA-110), appellant 

indicated that she was inquiring about her life insurance because deductions were being made for 

PRBLI, but not OLI. OWCP’s claims examiner advised her to contact OPM if she believed that 

this was incorrect, as OWCP could not change her coverage.

In a letter dated September 23, 2017, appellant advised OWCP that she presently had

PRBLI no reduction; however, she had always elected OLI, with no reduction, since being 

employed at the employing establishment and she believed that an error had occurred. She 

provided a copy of a June 7, 2016 letter from OPM to OWCP, which related that she carried life 

insurance under option C. Appellant also provided a copy of a second letter from OPM, also dated 

 

3 OWCP noted that the deductions for dental and vision benefits were lumped into a miscellaneous deduction of 

$54.68.
3

June 7, 2016. In that letter, OPM explained that as long as OWCP found that she was unable to 

return to work, and she continued to receive compensation benefits, her life insurance coverage 

would continue. It also advised appellant that OWCP made a computer error in January 2016, 

which caused her OLI premiums to stop. OPM advised her that OWCP was working on correcting 

the error and that she would be billed for the past due premiums.

On October 5, 2017 upon review of the fiscal record, OWCP determined that appellant had 

elected both PRBLI and OLI. It explained that premiums were deducted through January 9, 2016, 

but for some reason OLI premiums were dropped beginning January 10, 2016. Appellant was 

therefore overpaid for the period January 10, 2016 through September 16, 2017. OWCP explained 

that an overpayment was calculated as $319.48 x 22 pay roll cycles or $7,028.56. A worksheet of 

the payments was attached.

In a November 2, 2017 memorandum of telephone call (CA-110), OWCP’s claims 

examiner advised appellant that both basic and optional life insurance premiums were again being 

deducted from her compensation. OWCP provided her with a letter also dated November 2, 2017 

advising her that her life insurance premiums were restored. Appellant was informed that this 

action was taken pursuant to an OPM memorandum dated June 7, 2016 which reflected that her

postretirement election was no reduction, commencing April 11, 1997, and that she continued 

coverage of basic life insurance, no reduction; option B-5x- no reduction, and option C-1x-no 

reduction. 

On November 14, 2017 OWCP issued appellant a preliminary determination of an 

overpayment of compensation in the amount of $7,028.56 because it had failed to make proper 

insurance deductions from her continuing benefits for the period January 10, 2016 through 

September 16, 2017. It noted that she did not have the proper OLI premiums deducted. OWCP 

explained that appellant had elected the PRBLI coverage and OLI coverage at the no reduction 

levels. It noted that, while the premiums were deducted through January 9, 2016, the OLI 

premiums were inexplicably dropped beginning on January 10, 2016. They were not restored 

again until the periodic rolls payment beginning on September 17, 2017. OWCP explained that 

the OLI premium deduction for no reduction was $319.48. It explained that it should have been 

deducted for 22 cycles, and as such, the total deductions of $7,028.56 should have been made and 

an overpayment in that amount had occurred. OWCP made a preliminary determination that 

appellant was not at fault in the creation of the overpayment. It advised her that she could submit 

evidence challenging the fact, amount, and request waiver of recovery of the overpayment. OWCP

informed appellant that she could submit additional evidence in writing or at a prerecoupment 

hearing, but that a prerecoupment hearing must be requested within 30 days of the date of the 

written notice of the overpayment. It also requested that she complete the enclosed overpayment 

recovery questionnaire (Form OWCP-20) within 30 days. 

On November 26, 2017 appellant completed the overpayment recovery questionnaire

(Form OWCP-20). She argued that she did not believe that an overpayment occurred. Appellant 

indicated that the overpayment was based on an insurance policy that was not in effect during the 

period January 10, 2016 to September 16, 2017. She provided a breakdown of her monthly income 

and expenses. Appellant indicated that she had total monthly expenses of $2,956.00. The record 

reflects that she received $3,976.71 from OWCP every 28 days and she also indicated that she 

received $560.00 in social security benefits monthly, thus, she had a total monthly income of 
4

$4,536.71. Appellant also indicated that she had $500.00 in her checking account and $3,000.00 

in her savings account. She indicated that her bills and monthly expenses totaled $2,956.00. This 

included: rent $1,156.00; food $350; clothing $200.00; and utilities $150.00. Appellant also listed 

credit card debts in the amount of $3,600.00, for which she paid $125.00/$300.00 per month and 

a $41,000.00 bank note with a monthly payment of $125.00/$300.00. 

By decision dated February 14, 2018, OWCP finalized the overpayment of compensation

in the amount of $7,028.56. It found that, although appellant was not at fault in the creation of the 

overpayment, the overpayment was not subject to waiver as her calculated expendable income did 

not indicate that recovery of the debt would cause undue hardship, defeat the purpose of FECA, or 

be against equity and good conscience. OWCP found that $250.00 would be deducted from her 

continuing wage-loss benefits beginning March 4, 2018, every 28 days until the overpayment was 

absorbed.

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.4 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.5

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 the OPM upon 

discovery of the error.6

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.7 The coverage for basic life 

insurance is effective unless waived,8and premiums for basic life insurance and optional life 

insurance coverage are withheld from the employee’s pay.9 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.10 The employee is responsible for payment of premiums for optional life 

 

4 5 U.S.C. § 8129.

5 20 C.F.R. §§ 10.434-10.437; J.L., Docket No. 18-0212 (issued June 8, 2018).

6 5 U.S.C. § 8707(d); B.W., Docket No. 19-0126 (issued December 9, 2019); see also Keith H. Mapes, 56 ECAB 

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

7 5 U.S.C. § 8702(a). 

8

Id. at § 8702(b).

9

Id. at § 8707. 

10 Id. at § 8706. 
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insurance coverage which is accomplished by authorizing withholdings from his or her 

compensation.11

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).12

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.13 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.14 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.15

ANALYSIS -- ISSUE 1

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

OWCP found that an overpayment of compensation in the amount of $7,028.56 was created 

for the period January 10, 2016 through September 16, 2017 because it failed to properly deduct 

premiums for optional life insurance, with no reduction. Appellant alleged that she had always 

elected OLI, with no reduction. On October 5, 2017 OWCP reviewed the fiscal record and

determined that appellant had elected both PRBLI and OLI. It explained that premiums had been 

properly deducted through January 9, 2016, but due to an error were dropped beginning 

January 10, 2016. The record includes OPM’s June 7, 2016 letter notifying OWCP that appellant 

had elected both PRBLI and OLI. The record also includes computer printouts showing that no 

deductions had been made for OLI for 22 compensation periods beginning January 10, 2016 to 

 

11 Id. at § 8706(b)(3)(B). V.H., Docket No. 18-1124 (issued January 16, 2019); see Edward J. Shea, 43 ECAB 

1022 (1992).

12 G.L., Docket No. 19-0297 (issued October 23, 2019); see James J. Conway, Docket No. 04-2047 (issued 

May 20, 2005). 

13 5 C.F.R. § 870.504(a)(1).

14 Id. at § 870.504(b).

15 5 U.S.C. § 8707(d); see also Keith H. Mapes, 56 ECAB 130 (2004); James Lloyd Otte, 48 ECAB 334 (1997).
6

September 16, 2017. A November 2, 2017 payment report indicated that the OLI premium 

deduction was reinstated effective September 17, 2017.

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

received an overpayment of compensation for the period because it failed to properly deduct 

premiums for OLI. While the record contained memorandum from OPM regarding appellant’s 

OLI coverage, the record does not contain evidence that appellant signed a document electing OLI

coverage with no reduction. 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.16 As OWCP has not factually established 

appellant’s life insurance election, which was in effect on January 10, 2016, it has not met its 

burden of proof to establish that she received an overpayment of compensation from January 10, 

2016 through September 16, 2017.

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.17

CONCLUSION

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

 

16 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).

17 In light 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.
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ORDER

IT IS HEREBY ORDERED THAT the February 14, 2018 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: March 5, 2020

Washington, DC

Alec J. Koromilas, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board