United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

A.V., Appellant

and

U.S. POSTAL SERVICE, PROCESSING & 

DISTRIBUTION CENTER, San Francisco, CA, 

Employer

__________________________________________

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Docket No. 21-0887

Issued: May 12, 2022

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

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On May 24, 2021 appellant filed a timely appeal from December 23, 2020 merit decisions

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 $12,840.49 for the period March 13, 2010 through May 25, 2019, for which she was 

without fault, because of an underwithholding of post-retirement basic life insurance (PRBLI) 

premiums; (2) whether appellant received an overpayment of compensation in the amount of 

$678.06 for the period March 13, 2010 through July 20, 2019, for which she was without fault, 

1

5 U.S.C. § 8101 et seq.
2

because of an underwithholding of optional life insurance (OLI) premiums; and (3) whether 

OWCP properly denied waiver of recovery of the overpayments.

FACTUAL HISTORY

On May 8, 2000 appellant, then a 46-year-old mail handler, filed a traumatic injury claim 

(Form CA-1) alleging that, on that date, she experienced right upper arm muscle pain when she 

lifted a full flat tray while in the performance of duty. She stopped work on that date. On June 2, 

2000 OWCP accepted the claim for right arm strain. It subsequently expanded the acceptance of 

appellant’s claim to include resolved right shoulder impingement.2 Appellant underwent OWCPauthorized arthroscopic right shoulder surgeries on January 18 and August 23, 2001. OWCP paid 

her wage-loss compensation on the daily rolls as of January 6, 2001, and on the periodic rolls as 

of February 25, 2001. Appellant filed additional CA-7 forms claiming disability from work and 

OWCP paid her wage-loss compensation on the supplemental rolls as of September 10, 2009 and 

on the periodic rolls as of September 27, 2009.

On April 30, 2019 the Office of Personnel Management (OPM) informed OWCP that as a 

compensationer appellant was eligible to continue Federal Employees’ Group Life Insurance 

(FEGLI) coverage in the form of basic life insurance (BLI), OLI, and PRBLI coverage. The final 

base salary on which FEGLI was based was $51,440.00. OPM requested that OWCP deduct life 

insurance premiums for BLI no reduction, OLI, option B-1X no reduction, and option C–1X full 

reduction. It also informed OWCP that deductions for appellant’s PRBLIshould have commenced

on March 13, 2010; however, it appeared no reductions were made for appellant’s PRBLI 

coverage. Additionally, OPM noted that there was no response to its “freeze letters” of 

August 2018, but appellant originally had option B no reduction and cancelled option C on an 

April 2010 Continuation of Life Insurance Coverage as an Annuitant or Compensationer under 

FEGLI Program (SF-2818) and thus, she had option C due to incontestability. Appellant’s 

April 18, 2010 SF-2818 and OPM’s Option C Election Forms (freeze letters) dated April 29, 2019 

were submitted. The SF-2818 form bearing appellant’s signature verified OPM’s April 30, 2019 

summary of appellant’s life insurance elections as an annuitant or compensationer. The form 

indicated that appellant’s initial elections were made on April 18, 2010 and that on April 29, 2019 

she changed her OLI election to discontinue option C. 

By letter dated June 14, 2019,OWCP informed OPM that it began deducting premiumsfor 

OLI post 65 and PRBLI no reduction from appellant’s continuing compensation payments on

May 26, 2019. It noted that it had stopped all deductions for OLI option C when appellant turned 

65 years old. OWCP indicated that the last deduction for OLI made prior to May 26, 2019 was 

December 8, 2018. It requested OPM to verify whether it should retroactively reinstate OLI 

premiums to December 9, 2018. OWCP also requested OPM to verify whether it should make 

deductions for PRBLI with no reduction beginning March 13, 2010. It requested clarification 

because there were no prior SF-2818 forms in the record and on the April 18, 2010 SF-2818 

appellant checked a box marked “Yes,” and a box marked “No,” in response to question 13 

2 OWCP granted appellant a schedule award for the period from September 5, 2007 until July 6, 2008 for 14 percent 

permanent impairment of the right upper extremity. 
3

regarding whether she wished to elect family OLI option C.

3

 OWCP noted that her elections must 

be clearly established before it could declare an overpayment for retroactive deductions. 

On August 6, 2019 OWCP deducted premiums for OLI and PRBLI no reduction from 

appellant’s continuing compensation payment for the period July 21 to August 17, 2019 based on 

incontestability (code I1) as instructed by OPM. Appellant’s final base salary on which FEGLI 

was based was $51,440.00.

In a preliminary overpayment determination dated August 13, 2019, OWCP notified 

appellant that she had received an overpayment of compensation in the amount of $13,389.20

because BLI, OLI, and PRBLI premiums had not been properly deducted from her FECA 

compensation for the period March 13, 2010 through July 20, 2019 and because it under deducted 

her life insurance premiums which should have been based on the annual salary of $51,440.00 

rather than $50,876.80. It provided overpayment calculations, which revealed that the 

overpayment occurred from March 13, 2010 through July 20, 2019 and included BLI, OLI, and 

PRBLI overpayment calculations to reach the $13,389.20 total overpayment. OWCP further 

advised appellant of its preliminary determination that she was without fault in the creation of the 

overpayment and requested that she complete an overpayment action request form and an 

overpayment recovery questionnaire (Form OWCP-20), and submit documentation including tax 

returns, bank account statements, bills and cancelled checks, pay slips, and other records which 

supported income and expenses listed. Additionally, it advised her that, within 30 days of the date 

of the letter, she could request a final decision based on the written evidence or a prerecoupment 

hearing.

On September 6, 2019 appellant requested a prerecoupment hearing by telephone. She

requested waiver of recovery of the overpayment, contending that she was unaware that life 

insurance premiums were not paid. In a September 4, 2019 Form OWCP-20, appellant reported

monthly income of $3,633.00 and listed monthly expenses of $2,955.00.

4

 She indicated that she 

had assets of $300.00.

Following a telephonic hearing held on January 9, 2020, an OWCP hearing representative, 

by decision dated March 24, 2020, vacated the August 13, 2019 preliminary overpayment 

determination and remanded the case for further development. The hearing representative found 

that OWCP had issued its preliminary overpayment determination without receiving OPM’s 

response to the June 14, 2019 letter as to whether OWCP had to retroactively reinstate premiums 

for OLI to December 9, 2018 due to incontestability. The hearing representative also noted a 

number of inconsistencies between the calculation of premiums which should have been deducted 

for BLI, OLI, and PRBLI in OWCP’s preliminary overpayment determination and in the manual 

adjustment form dated August 7, 2019. Further, the hearing representative noted that OWCP 

appeared to offset a prior underpayment of compensation, from the overpayment, which was 

3 The Board notes that it appears that OWCP inadvertently indicated that appellant’s responses were for question 3 

rather than question 13 which relates to the election of family OLI option C while question 3 relates to the provision 

of a Social Security number.

4 The Board notes that it appears that appellant inadvertently calculated $2,953.00 rather than $2,955.00 in total 

monthly expenses.
4

prohibited. The hearing representative noted that OWCP indicated that the overpayment due to 

failure to deduct PRBLI premiums existed from March 13, 2010 through July 20, 2019, OWCP 

did begin deduction of PRBLI no reduction premiums on May 26, 2019. Finally, the hearing 

representative instructed OWCP that it should address any/all discrepancies and clearly explain 

how the overpayment was calculated in a new preliminary overpayment determination. 

OWCP, in a preliminary overpayment determination dated July 22, 2020, notified 

appellant that she had received an overpayment of compensation in the amount of $12,840.49

because it had failed to properly deduct premiums for PRBLI with no reduction from her FECA 

compensation payments for the period March 13, 2010 through May 25, 2019 based on OPM’s 

April 30, 2019 letter. It provided its calculations on the amount of compensation paid during the 

period. OWCP further notified appellant of its preliminary determination finding that she without

fault in the creation of the overpayment. It provided her with an overpayment action request form 

and a Form OWCP-20 for her completion. OWCP again requested that appellant provide 

documentation including income tax returns, bank account statements, bills and cancelled checks, 

pay slips, and any other records which supported income and expenses listed, and allotted 30 days 

for her to respond.

In a separate preliminary overpayment determination also dated July 22, 2020, OWCP 

informed appellant that she was overpaid in the amount of $678.06 because it had failed to properly 

deduct OLI premiums from her FECA compensation payments for the period March 13, 2010 

through July 20, 2019. It found that it had under deducted her OLI premiums based on the annual 

salary of $50,876.80 rather than $51,440.00 for the period March 13, 2010 through 

November 11, 2018. Additionally, OWCP noted that deductions for OLI premiums ceased 

effective November 11, 2018 and were not reinstated until July 21, 2019. It explained its 

calculation of the overpayment during the period March 13, 2010 through July 21, 2019. OWCP 

further informed appellant of its preliminary determination that she was without fault in creation 

of the overpayment. It provided her with an overpayment action request form and a Form OWCP20 for her completion and requested that she submit supporting financial documentation. 

Additionally, OWCP continued to inform appellant of the actions she could take, and allotted 30 

days for her to respond. No response was received to either preliminary overpayment 

determination.

In decisionsissued on December 23, 2020, OWCP finalized both preliminary overpayment 

determinations dated July 22, 2020. It found that appellant had received an overpayment of 

compensation in the amount of $12,840.40 because no deductions for PRBLI premiums were made

from her FECA compensation payments for the period March 13, 2010 through May 25, 2019. 

OWCP also found that she had received a $678.06 overpayment of compensation for the period 

March 13, 2010 through July 20, 2019 because it had failed to properly deduct OLI premiums 

from her FECA compensation payments. It further found that appellant was without fault in the 

creation of the overpayments, but denied waiver of recovery of the overpayments, noting that she 

had not responded to its July 22, 2020 preliminary overpayment determinations. OWCP required 

recovery of the overpayments in full.
5

LEGAL PRECEDENT -- ISSUES 1 & 2

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. 5 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.6

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

to participate in BLI and one or more of the options.7 The coverage for BLI is effective unless 

waived,8 and premiums for basic and optional life coverage are withheld from the employee’s 

pay.9 Upon retirement or upon separation from the employing establishment or being placed on 

the FECA periodic compensation rolls, an employee may choose to continue BLI and OLI 

coverage in which case the schedule of deductions made will be used to withhold premiums from 

his or her annuity or compensation payments.10 BLI coverage shall be continued without cost to 

an employee who retired or began receiving compensation on or before December 31, 1989;11

however, the employee is responsible for payment of premiums for OLI coverage which is 

accomplished by authorizing withholdings from his or her compensation.12

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 

5

Id. at § 8102(a).

6

Id. at § 8129(a).

7

5 U.S.C. § 8702(a).

8

Id. at § 8702(b).

9

Id. at § 8707.

10 Id. at § 8706.

11 Id. at § 8707(b)(2).

12 Id. at § 8706(b)(3)(B). See B.B., Docket No. 17-1733 (issued March 26, 2018).
6

greater premium).13 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.14

ANALYSIS -- ISSUES 1 & 2

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

$12,840.49 for the period March 13, 2010 through May 25, 2019, for which she was without fault, 

because of an underwithholding of PRBLI premiums. 

OPM notified OWCP of appellant’s BLI, OLI, and PRBLI coverage, for which it should 

have deducted premiums effective March 13, 2010. OWCP, however, did not deduct the proper 

amounts of premiums for PRBLI from appellant’s wage-loss compensation benefits for the period 

March 13, 2010 through May 25, 2019. 

Following the hearing representative’s March 24, 2020 remand of the case, OWCP

calculated the amount of the resulting overpayment as $12,840.49 for the period March 13, 2010 

through May 25, 2019. In the preliminary overpayment determination dated July 22, 2020, it

explained the monthly rates for PRBLI deductions that should have been made from March 13, 

2010 through May 25, 2019 and found that the total amount of the overpayment based on failure 

to deduct premiums totaled $12,840.49. While in compensationer status, appellant remained 

responsible for all insurance benefits, including the premiums for PRBLI at whatever option he or 

she had selected.15 Moreover, as noted, 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.16 The Board thus finds that OWCP properly

found that an overpayment exists and explained its calculation of the amount of the overpayment. 

As OWCP failed to properly deduct PRBLI premiums for the period March 13, 2010 through 

May 25, 2019, appellant received an overpayment of compensation of $12,840.49 during this 

period.

17

 

The Board also finds that the case is not in posture for decision as to whether appellant

received an overpayment of compensation in the amount of $678.06 for the period March 13, 2010 

through July 20, 2019 due to underwithholding of OLI premiums. The hearing representative 

found that OWCP had issued its preliminary overpayment determination prematurely regarding 

this overpayment. The Board finds that while the SF-2818 form of record indicates that appellant 

cancelled her OLI option C insurance on April 29, 2019, the record suggests that the overpayment 

13 See I.J., Docket No. 19-1672 (issued March 10, 2020); C.A., Docket No. 18-1284 (issued April 15, 2019); 

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

14 5 U.S.C. § 8707(d); see also J.H.,Docket No. 20-0281 (issued May18, 2021); B.B., supra note 12.

15 5 C.F.R. § 870.504(b); S.P.,Docket No. 17-1888 (issued July 18, 2018).

16 5 U.S.C. § 8102.

17 See I.J., supra note 13; J.H.,supra note 14; D.H.,Docket No. 19-0384 (issued August 12, 2019); R.W., Docket 

No. 19-0451 (issued August 7, 2019).
7

was calculated through July 20, 2019. Therefore, it remains unclear whether the $678.06 

overpayment was calculated correctly for the period March 13, 2010 through July 20, 2019. 

On remand, OWCP shall clarify remaining issues. It shall then determine the amount of 

the overpayment of compensation and issue a new preliminary overpayment determination, with 

an overpayment action request form, a new Form OWCP-20, and instructions for appellant to 

provide updated supporting documentation. Following this, and other such further development 

as deemed necessary, OWCP shall issue a de novo decision.18

LEGAL PRECEDENT -- ISSUE 3

Section 8129 of FECA provides that an individual who is without fault in creating or 

accepting an overpayment is still subject to recovery of the overpayment unless adjustment or 

recovery would defeat the purpose of FECA or would be against equity and good conscience. 19

Recovery of an overpayment will defeat the purpose of FECA when such recovery would 

cause hardship to a currently or formerly entitled beneficiary because the beneficiary from whom 

OWCP seeks recovery needs substantially all of his or her current income, including compensation 

benefits, to meet current ordinary and necessary living expenses, and the beneficiary’s assets do 

not exceed a specified amount as determined by OWCP. 20 Additionally, recovery of an 

overpayment is considered to be against equity and good conscience when an individual who 

received an overpayment would experience severe financial hardship in attempting to repay the 

debt or when an individual, in reliance on such payment or on notice that such payments would be 

made, gives up a valuable right or changes his or her position for the worse. 21

OWCP’s regulations provide 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. The information is also used to 

determine the repayment schedule, if necessary.22 Failure to submit the requested information 

within 30 days of the request shall result in a denial of waiver of recovery, and no further request 

for waiver shall be considered until the requested information is furnished. 23

18 See S.H., Docket No. 20-1189 (issued January 27, 2021).

19 5 U.S.C. § 8129; 20 C.F.R. §§ 10.433, 10.434, 10.436, and 10.437; see A.S., Docket No. 17-0606 (issued 

December 21, 2017).

20 20 C.F.R. § 10.436(a)(b). For an individual with no eligible dependents the asset base is $6,200.00. The base 

increases to $10,300.00 for an individual with a spouse or one dependent, plus $1,200.00 for each additional 

dependent. Federal (FECA) Procedure Manual, Pa rt 6 -- Debt Management, Final Overpayment Determinations, 

Chapter 6.400.4a(2) (September 2020).

21 Id. at § 10.437(a)(b).

22 Id. at § 10.438(a).

23 Id. at § 10.438(b).
8

ANALYSIS -- ISSUE 3

The Board finds that OWCP properly denied waiver of recovery of the $12,840.49 PRBLI 

overpayment.

The fact that a claimant is without fault in the creation of an overpayment does not preclude 

OWCP from recovering the overpayment.24 As OWCP found appellant without fault in the 

creation of the overpayments, 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.25 Appellant, however, has the responsibility to provide the appropriate 

financial information and documentation to OWCP.

26

In its preliminary overpayment determination dated July 22, 2020, OWCP explained the 

importance of providing the completed Form OWCP-20 and financial information, including 

copies of income tax returns, bank account statements, bills, pay slips, and any other records to 

support income and expenses. It advised appellant that it would deny waiver of recovery if she 

failed to furnish the requested financial information within 30 days. Appellant, however, did not 

respond. As such, OWCP did not have the necessary financial information to determine if recovery 

of the overpayment would defeat the purpose of FECA or if recovery would be against equity and 

good conscience.27

As appellant did not submit the information required under 20 C.F.R. § 10.438, which was 

necessary to determine her eligibility for waiver, the Board finds that OWCP properly denied 

waiver of recovery of the $12,840.49 PRBLI overpayment.28

CONCLUSION

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

$12,840.49 for the period March 13, 2010 through May 25, 2019, for which she was without fault, 

because of an underwithholding of PRBLI premiums. The Board further finds that the case is not 

in posture for decision as to whether appellant received an overpayment of compensation in the 

amount of $678.06 for the period March 13, 2010 through July 20, 2019 due to an 

underwithholding of OLI premiums. The Board finds that OWCP properly denied waiver of 

24 See George A. Rodriguez, 57 ECAB 224 (2005); JoyceO. Diaz, 51 ECAB 124 (1999).

25 20 C.F.R. § 10.436.

26 Id. at § 10.438; see also N.J., Docket No. 19-1170 (issued January 10, 2020); S.M.,Docket No. 17-1802 (issued 

August 20, 2018).

27 J.H., supra note 14; D.H.,supra note 17.

28 Id.
9

recovery of the $12,840.49 PRBLI overpayment.29 In light of the Board’s disposition of the 

$678.06 OLI overpayment, the issue of waiver is moot.

ORDER

IT IS HEREBY ORDERED THAT the December 23, 2020 decisions of the Office of 

Workers’Compensation Programs are affirmedin part, and set aside in part. This case is remanded 

for further proceedings consistent with this decision of the Board.

Issued: May 12, 2022

Washington, DC

Alec J. Koromilas, Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board

29 With respect to recovery of the overpayment, the Board’s jurisdiction is limited to reviewing those cases where 

OWCP seeks recovery from continuing compensation benefits under FECA. J.C., Docket No. 17-1791 (issued 

February23, 2018); D.R., 59 ECAB 148 (2007);MiguelA. Muniz, 54 ECAB 217 (2002). As appellant is not receiving 

wage-loss compensation, the Board does not have jurisdiction with respect to the recovery of the overpayment under 

the Debt Collection Act. Id.; Miguel A. Muniz, 54 ECAB 217 (2002); Lorenzo Rodriguez, 51 ECAB 295 (2000); 20 

C.F.R. § 10.441.