United States Department of Labor

Employees’ Compensation Appeals Board

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J.K., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Citrus Heights, CA, Employer

__________________________________________

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Docket No. 20-1545

Issued: July 27, 2021

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

ALEC J. KOROMILAS, Chief Judge

JANICE B. ASKIN, Judge

PATRICIA H. FITZGERALD, Alternate Judge

JURISDICTION

On August 20, 2020 appellant filed a timely appeal from a February 28, 2020 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, for which 

she was without fault, in the amount of $11,451.43 for the period September 11, 2010 through 

August 18, 2018; (2) whether OWCP properly denied waiver of recovery of the overpayment; and 

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that appellant submitted additional evidence on appeal. 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

(3) whether OWCP properly required recovery of the overpayment by deducting $690.63 from 

appellant’s continuing compensation payments, every 28 days.

FACTUAL HISTORY

On April 24, 2008 appellant, then a 49-year-old window and distribution clerk, filed a 

traumatic injury claim (Form CA-1) alleging that on April 21, 2018 she injured her low back, right 

knee, shoulders, neck, and head when a coworker ran into her while in the performance of duty. 

She stopped work on April 21, 2008 and returned to work on April 24, 2008. OWCP accepted the 

claim for lumbar sprain. It subsequently expanded acceptance of the claim to include neck sprain, 

thoracic sprain, a sprain of the right knee and leg, and a recurrent episode of severe major 

depression without mention of psychotic behavior.3 OWCP paid appellant wage-loss 

compensation on the supplemental rolls, beginning May 1, 2008.

On June 8, 2010 OWCP advised appellant that it was placing her on the periodic 

compensation rolls effective April 11, 2010.4 It indicated that it was deducting premiums for basic 

life insurance (BLI) and optional life insurance (OLI) from her compensation payments. OWCP 

did not deduct premiums for postretirement basic life insurance (PRBLI).

In a letter dated July 30, 2018, OPM informed OWCP that appellant, as a compensationer, 

was eligible to continue coverage under the Federal Employees’ Group Life Insurance (FEGLI) 

Program. It further notified OWCP that she had elected PRBLI with no reduction commencing 

September 11, 2010. OPM advised that appellant’s final base salary for FEGLI purposes was 

$54,257.00. 

On August 19, 2018 OWCP began deducting premiums for PRBLI from appellant’s 

continuing compensation payments. 

In a notice dated October 2, 2018, OWCP advised appellant of its preliminary 

determination that she had received an overpayment of compensation in the amount of $11,443.73 

because it had failed to deduct PRBLI premiums from her compensation payments for the period 

September 1, 2010 through August 18, 2018. It further notified her of its preliminary 

determination that she was without fault in the creation of the overpayment. OWCP requested that 

appellant complete the enclosed overpayment recovery questionnaire (Form OWCP-20) and 

submit supporting financial documents. Additionally, it notified her that, within 30 days of the 

date of the letter, she could request a telephone conference, a final decision based on the written 

evidence, or a prerecoupment hearing, if she objected to the preliminary notification findings or 

requested waiver of recovery of the overpayment.

 

3 OWCP had previously accepted that appellant sustained right hip strain, lumbar disc degeneration and disc 

protrusion, right knee sprain, and disorders of the sacrum due to a May 10, 2003 employment injury, assigned OWCP 

File No. xxxxxx807 and lumbar sprain due to a July 14, 2005 employment injury, assigned OWCP File No. 

xxxxxx597. 

4 A notification of personnel action dated September 30, 2010 indicated that the Office of Personnel Management 

(OPM) had approved appellant’s disability retirement and that her last day in pay status was September 10, 2009. She 

was a PS07/0 at the time of her retirement which yielded a yearly salary of $54,257.00 effective November 21, 2009.
3

On October 28, 2018 appellant, through her then-counsel, requested a prerecoupment 

hearing before a representative of OWCP’s Branch of Hearings and Review. She submitted a 

completed Form OWCP-20. 

Following a preliminary review, by decision dated January 29, 2019, OWCP’s hearing 

representative vacated the October 2, 2018 preliminary overpayment determination, finding that 

the evidence of record did not contain a signed form documenting appellant’s election of life 

insurance.

Subsequently, OWCP received a June 30, 2018 letter from appellant reducing her Part B 

life insurance from a multiple of five to a multiple of two.

On February 27, 2019 OPM provided a FEGLI form completed by appellant on 

July 4, 2010. Appellant elected BLI with no reduction in retirement and selected Option A and 

Option B with five multiples.

On March 19, 2019 OWCP issued a preliminary determination that appellant had received 

an overpayment of $11,976.60 because it had failed to deduct PRBLI premiums from her 

compensation payments for the period July 4, 2010 through August 18, 2018. It further advised

her of its preliminary determination that she was without fault in creating the overpayment of 

compensation. 

On April 9, 2019 appellant’s then-counsel requested a prerecoupment hearing before a 

representative of OWCP’s Branch of Hearings and Review. Appellant submitted a completed 

OWCP-20. 

A telephonic hearing was held on June 9, 2019. 

In a July 1, 2019 response to appellant’s request for information regarding the calculation 

of the overpayment, OWCP advised that it had automatically calculated the amount using its 

computerized system. It provided a portion from its preliminary overpayment determination 

setting for the monthly rates for each $1,000.00 of insurance in effect during each period.

By decision dated August 16, 2019, OWCP’s hearing representative set aside the 

preliminary overpayment determination. She found that OWCP had incorrectly determined that 

the period of the overpayment had begun on July 4, 2010 instead of September 11, 2010. The 

hearing representative further found that OWCP had failed to adjust the overpayment based on 

appellant’s change in election of life insurance effective July 1, 2018.

The record contains a computer calculation form for PRBLI setting forth the monthly rate 

for premiums from September 11, 2010 to August 18, 2018. It indicated that the deduction amount 

was $11,697.83. In a separate calculation form, OWCP found that OLI with a multiple of two 

yielded a premium deduction of $190.40 for the period July 1 to August 18, 2018.

On August 27, 2019 OWCP advised appellant of its preliminary determination that she had 

received an overpayment of compensation in the amount of $11,451.43 because it had failed to 

deduct PRBLI premiums from her compensation payments for the period September 11, 2010 

through August 18, 2018. It further found that it had not properly adjusted her OLI to Option B 
4

with two multiples from July 1 to 18, 2018, which had resulted in an underpayment of 

compensation. OWCP indicated that the overpayment amount had been calculated automatically 

using the Integrated Federal Employees’ Compensation System (iFECS). It set forth the monthly 

rates for each $1,000.00 of basic insurance for the periods September 11, 2010 to December 31, 

2011, January 1, 2012 to August 23, 2014, August 24, 2014 to December 31, 2015, and January 1, 

2016 to August 18, 2018. OWCP also set forth the deduction amounts for each period, which it 

found yielded an $11,697.83 overpayment of compensation. From this amount OWCP subtracted 

the $246.40 that it had over deducted from appellant’s compensation for OLI coverage from July 1 

to August 18, 2018, to find a total overpayment of $11,451.43. It requested that she complete the 

enclosed Form OWCP-20 and submit supporting financial documents. OWCP further advised 

appellant that she could request a telephone conference, a final decision based on the written 

evidence, or a prerecoupment hearing, within 30 days.

On September 18, 2019 appellant’s then counsel requested a prerecoupment hearing before 

a representative of OWCP’s Branch of Hearings and Review and submitted a completed Form 

OWCP-20. In an accompanying letter dated September 13, 2019, appellant requested waiver of 

recovery of the overpayment. She also requested a breakdown of the amount that she was charged 

for insurance from September 11, 2009 to August 18, 2018. Appellant maintained that she wanted 

to make sure the amount of the overpayment was correctly calculated.

A telephonic hearing was held on January 6, 2020. During the hearing, appellant’s thencounsel advised that her expenses had changed since the submission of the September 2019 

OWCP-20. He questioned OWCP’s calculation of the overpayment, noting that he had asked for 

an itemized explanation. Appellant also asserted that she had requested an itemized statement 

showing how much life insurance she should have paid, what she did pay, and the amount owed 

each 28 days. She indicated that she had shown OWCP’s decision to a certified public accountant 

who advised that he did not have enough information to determine whether the amount was correct. 

OWCP’s hearing representative advised that a computer system automatically calculated the 

overpayment based on coding from OPM. Appellant described her monthly income and expenses. 

On January 20, 2020 appellant submitted a Form OWCP-20 signed January 10, 2020 and 

supporting financial documentation. 

By decision dated February 28, 2020, OWCP’s hearing representative found that appellant 

had received an overpayment of compensation in the amount of $11,451.43 for the period 

September 11, 2010 through August 18, 2018 because OWCP failed to deduct premiums for 

PRBLI from her compensation.5 He found that she was without fault in the creation of the 

overpayment, but denied waiver as her income exceeded her expenses by more than the allotted 

amount. OWCP’s hearing representative determined that the overpayment would be recovered by 

deducting $690.63 from appellant’s continuing compensation every 28 days.

 

5

In the issue, OWCP’s hearing representative indicated that OWCP had found an overpayment of $11,443.73 rather 

than $11,451.43; however, he ultimately affirmed the finding of an overpayment of compensation in the amount of 

$11,451.43.
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LEGAL PRECEDENT -- ISSUE 1

FECA6provides 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.7 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.8

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.9 The coverage for basic life 

insurance is effective unless waived,10 and premiums for basic and optional life insurance coverage 

are withheld from the employee’s pay.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

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.13

 

6 Supra note 1.

7 5 U.S.C. § 8102(a).

8

Id. at § 8129(a).

9 5 U.S.C. § 8702(a).

10 Id. at § 8702(b).

11 Id. at § 8707.

12 See C.A., Docket No. 18-1284 (issued April 15, 2019); V.H., Docket No. 18-1124 (issued January 16, 2019).

13 5 U.S.C. § 8707(d); D.H., Docket No. 19-0384 (issued August 12, 2019).
6

ANALYSIS -- ISSUE 1

The Board finds that appellant received an overpayment of compensation for the period 

September 11, 2010 through August 18, 2018; however, the case is not in posture for decision 

regarding the amount of the overpayment.

OPM advised OWCP on July 30, 2018 that appellant had elected PRBLI with no reduction 

effective September 11, 2010. On February 27, 2019 OPM submitted the FEGLI form that she

had completed on July 4, 2010 electing BLI with no reduction in retirement. Appellant also 

selected OLI Option A and Option B with five multiples. OWCP, however, failed to deduct 

premiums for PRBLI until August 18, 2018, thereby creating an overpayment of compensation. It

explained to appellant how the overpayment occurred in its preliminary determination of the 

overpayment.14

The Board finds, however, that OWCP failed to provide a detailed explanation regarding 

its calculations of the amount of the overpayment. 

The Board has held that, in overpayment cases, it is essential that OWCP provide the 

recipient of compensation with a clear statement showing how the overpayment was calculated.15 

In its preliminary overpayment determination, OWCP advised that it had computed the 

overpayment automatically using iFECS, an automated system. It provided the monthly rates for 

each $1,000.00 of insurance coverage in effect during the applicable time period. OWCP informed 

appellant that iFECS had calculated the overpayment of compensation due to its failure to deduct 

premiums for PRBLI from September 11, 2010 to August 18, 2018 as $11,697.83. From this 

amount OWCP subtracted an underpayment of $246.40 due to the over deduction of premiums for 

OLI for the period September 11, 2010 to August 18, 2018, to find a total overpayment of 

$11,451.43. 

Appellant alleged that she was unable to calculate the overpayment from the numbers 

provided by OWCP. While OWCP set forth the monthly rate for deducting coverage for each 

$1,000.00 of coverage, it did not include all of the variables required for her to understand its 

calculations. The mathematical calculations performed by the computer program are not 

reproducible from the information provided.16

It is a well-established principle that OWCP must make proper findings of fact and a 

statement of reasons in its final decisions.17 Its procedures provide that a preliminary notice of 

overpayment must clearly set forth the reason for the overpayment and a clearly written 

 

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

15 See R.U., Docket No 16-0027 (issued March 24, 2016); L.D., Docket No. 15-1102 (issued January 20, 2016).

16 Cf. J.C., Docket No. 19-0122 (issued June 11, 2019) (OWCP provided mathematical calculations of the 

overpayment created by its failure to deduct life insurance premiums that were clear and reproducible).

17 20 C.F.R. § 10.126; R.U., supra note 15.
7

explanation as to how the overpayment was calculated.18 OWCP should clearly explain its 

calculations regarding the amount that should have been deducted for each period and the evidence 

supporting such deductions identified.19

Additionally, the Board notes that OWCP reduced the overpayment amount by the amount 

that had over withheld for OLI from September 11 to August 18, 2018. Although such an offset 

appears administratively straightforward, the Board has held that it may circumvent established 

legal procedures and protections if appellant is entitled to consideration of waiver.20 Such offsets 

are not allowed, as they permit an unrestricted recovery of the offset portion of the overpayment 

without regard to the relevant factors set forth in 20 C.F.R. § 10.441(a)21 which denies 

administrative due process with respect to the amount offset.22 

The case will be remanded for proper findings as to the amount of overpayment based on 

OWCP’s failure to properly deduct premiums for PRBLI. After such further development as 

deemed necessary, OWCP should issue de novo decision.23

CONCLUSION

The Board finds that appellant received an overpayment of compensation for the period 

September 11, 2010 through August 18, 2018; however, that the case is not in posture for decision 

regarding the amount of the overpayment.

 

18 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.4a 

(June 2009). 

19 See G.A., Docket No. 15-0095 (issued April 2, 2015).

20 P.S., Docket No. 18-1438 (issued February 1, 2019); S.P., Docket No. 17-1888 (issued July 18, 2018).

21 20 C.F.R. § 10.441(a). This section states that in collecting an overpayment of compensation, OWCP shall 

decrease later payment of compensation by taking into account the probable extent of future payments, the rate of 

compensation, the financial circumstances of the individual and any other relevant factors, so as to minimize hardship.

22 R.H., Docket No. 17-1933 (issued February 15, 2018); R.O., Docket No. 17-0894 (issued January 26, 2018). 

23 In light of the Board’s disposition of Issue 1, Issues 2 and 3 are rendered moot.
8

ORDER

IT IS HEREBY ORDERED THAT the February 28, 2020 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and set aside in part and the case is remanded 

for further proceedings consistent with this opinion of the Board.

Issued: July 27, 2021

Washington, DC

Alec J. Koromilas, Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board