United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

L.L., Appellant

and

ENVIRONMENTAL PROTECTION AGENCY, 

REGION II, Edison, NJ, Employer

__________________________________________

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Docket No. 20-1674

Issued: August 8, 2023

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 September 28, 2020 appellant filed a timely appeal from a September 1, 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 to consider the merits of this case.2

ISSUES

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

overpayment of compensation in the amount of $8,863.13, for which he was without fault, for the

period January 7, 2018 through January 28, 2019 because OWCP failed to deduct optional life 

1

5 U.S.C. § 8101 et seq.

2 The Board notes that, following the September 1, 2020 decision, appellant submitted additional evidence to 

OWCP. However, the Board’s Rules of Procedures 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

insurance (OLI) premiumsfrom his FECA wage-loss compensation; (2) whether it properly denied 

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

overpayment by deducting $1,092.00 from appellant’s continuing compensation payments every 

28 days.

FACTUAL HISTORY

On April 28, 1999 appellant then a 51-year-old environmental specialist, filed an 

occupational disease claim (Form CA-2) alleging that he developed neuropathic pain in both hands 

and wrists due to factors of his federal employment. He noted that he first became aware of his

condition on April 1, 1999, and realized its relation to his federal employment on April 13, 1999. 

Appellant stopped work on April 22, 1999. OWCP accepted his claim under OWCP File No. 

xxxxxx371 for bilateral carpal tunnel syndrome.3 Appellant underwent OWCP-authorized right 

carpal tunnel release on January 18, 1999 and left carpal tunnel release on February 19, 1999. 

In a letter dated July 6, 1999, OWCP placed appellant on the periodic compensation rolls,

effective June 20, 1999. The letter indicated that deductions from the regular payments were being 

made for OLI in the amount of $120.80. OWCP advised appellant that, if he had OLI or health 

insurance benefits coverage, and no deduction was made that he should contact OWCP as he was 

responsible for those premiums.

On November 1, 2000 the employing establishment removed appellant effective 

November 17, 2000 for an inability to perform the duties of his position.

In a notice to claimant dated January 24, 2012, OWCP informed appellant that he would 

reach 65 years of age as of December 28, 2012. It indicated that previously all deductions for OLI

automatically stopped when an OWCP claimant reached age 65, and coverage terminated shortly 

thereafter. However, under current legislation he had the option of continuing Option B and 

Option C life insurance beyond age 65, known as “Post-65 Reduction Election,” and was open to 

all claimants who currently have Option B or Option C life insurance coverage. OWCP sent a 

similar letter to appellant on September 21, 2012.

In a letter dated July 17, 2012, appellant informed OWCP of his change of address and 

enclosed a form to reduce his life insurance coverage. He submitted a life insurance election form 

(Standard Form 2817) dated July 17, 2012 and indicated that he elected Option B -- additional life 

insurance at one times his pay.

On August 15, 2012 OWCP acknowledged receipt of his new address and request for 

reduction in life insurance coverage. It noted that all requests for change or cancellation of life 

insurance must be sent in writing to the Office of Personnel Management (OPM) and provided an 

address.

3 Appellant filed a claim for a work-related injury on February 13, 1998,which was accepted by OWCP for right 

epicondylitis and bilateral carpal tunnel syndrome under OWCP File No. xxxxxx885. On June 16, 1999 OWCP 

indicated that OWCP File No. xxxxxx371 was filed for the same conditions accepted under OWCP File No.

xxxxxx885. It combined these claims and noted that OWCP File No. xxxxxx371was designated as the master file.
3

In a letter dated February 21, 2019, OWCP outlined appellant’s entitlement to 

compensation benefits on the periodic rolls. The letter indicated that deductions from the regular 

payments were being made for OLI in the amount of $641.26 every 28 days beginning with the 

period February 3 through March 2, 2019. OWCP advised appellant that, if he had OLI or health 

insurance benefits coverage, and no deduction was made that he should contact OWCP as he was 

responsible for those premiums.

In a February 28, 2019, OWCP supplemental rolls payment worksheet, OWCP advised 

that an overpayment of compensation had occurred and the amount of the overpayment was 

calculated based on life insurance premiums not being deducted from appellant’s monthly 

compensation checks from January 7, 2018 through January 28, 2019. It calculated the 

overpayment by taking the amount of compensation he was paid during this period, $75,614.82, 

and subtracting this from the correct amount of compensation, which he should have been paid, 

$65,063.16, for a total overpayment of $8,863.13.

In a letter dated March 4, 2019, OWCP indicated that if appellant had cancelled life 

insurance, to submit proof with the effective date of cancellation.

On March 7, 2019 OWCP issued a preliminary overpayment determination that an 

overpayment of compensation had occurred in the amount of $8,863.13 from January 7, 2018 

through January 28, 2019. It noted that the overpayment had occurred because appellant’s 

premiums had not been deducted for the OLI beginningJanuary 7, 2018. OWCP noted that it took 

action to update appellant’s health insurance coverage due to an open enrollment change, but failed 

to input the applicable OLI deduction. Appellant had been overpaid for the period January 7, 2018 

through January 28, 2019 in the amount of $8,863.13. OWCP found appellant without fault in the 

creation of the overpayment. It advised him that he could submit evidence challenging the fact or 

amount of the overpayment. OWCP instructed appellant to complete an overpayment recovery 

questionnaire (Form OWCP-20) to determine whether waiver should be granted, and if not, a 

reasonable repayment schedule would be formulated. It informed him that he should provide 

supporting financial documentation, including copies of income tax returns, bank account 

statements, bills, pay slips, and any other records to support income and expenses. OWCP 

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

date of the letter, he could request a final decision based on the written evidence or a 

prerecoupment hearing.

On March 18, 2019 appellant requested a prerecoupment hearing before a representative 

of OWCP’s Branch of Hearings and Review. He completed the Form OWCP-20 and stated that 

he had a total monthly household income of $10,572.00 and monthly expenses totaling $2,425.00. 

Appellant submitted tax returns from 2018 and bank statements. 

In a statement dated March 18, 2019, appellant disagreed with OWCP’s preliminary 

overpayment determination. He indicated that after he turned 65 his life insurance premium 

substantially increased. Appellant reported receiving correspondence “OPM Post 65 Reductions 

in the Amount of Insurance,” which stated that if he was eligible to continue basic life insurance 

as an annuitant or compensationer, he must choose the amount of basic life insurance he wanted 

to continue after age 65. He indicated that Option A, Option B, and Option C insurance were only 
4

available to people with basic insurance. Appellant further indicated that he did not respond to the 

letter and believed he therefore cancelled the insurance. 

On March 19, 2019 appellant indicated that OWCP stopped deducting life insurance 

premiums out of his disability check when he turned 70. He contacted OWCP and explained that

he thought he cancelled his life insurance when he did not return the form and was informed that 

he could still purchase OLI. Appellant asserted that he did not submit the required documents to 

continue life insurance after age 65.

On March 29, 2019 OWCP requested OPM provide information about appellant’s

postretirement life insurance election. It indicated that in a life insurance election form dated 

July 17, 2012 he elected Option B, one times his pay.

In letters dated April 13 and 20, 2019, appellant indicated that he did not have 

documentation that he cancelled his Federal Employees’ Group Life Insurance (FEGLI). He 

indicated that OWCP mailed him a Standard Form 2818 if he chose to continue life insurance after 

age 65. Appellant assumed that not signing the Standard Form 2818 would cancel his life 

insurance. He noted that OWCP continued to deduct life insurance premiums from his disability 

check until he turned 70. Due to his eroding health condition, appellant did not ask OWCP to stop 

deducting life insurance premiums.

In an Option C Election Form dated June 6, 2019, appellant cancelled Option C life 

insurance.

In a letter dated June 18, 2019, OPM instructed OWCP to cancel Option B-5X no reduction 

and also Option C-1X no reduction pursuant to the election freeze forms submitted by appellant. 

OPM requested the FEGLI code change from Y1 to C0 effective July 1, 2019. The final base 

salary on which FEGLI was based was $68,420.00. It noted the commencing date for the 

postretirement deductions was November 18, 2000.

The prerecoupment hearing was held on July 12, 2019. Appellant advised that Standard 

Form 2818 was the official form and instructions for compensationers to elect how much life 

insurance they want to retain after age 65 and is titled “Continuation of Life Insurance Coverage 

as an Annuitant or Compensationer, Federal Employees’ Group Life Insurance Program.” 

Appellant indicated that compensationers who did not submit the Standard Form 2818 by their 

65th birthday have full reduction in their life insurance and pay no life insurance premiums the first 

day of the month after they turned 65. He noted that he did not submit a Standard Form 2818 and 

failure to make an election of life insurance coverage was considered an election of full reduction 

for all multiples of that option.

By decision dated September 20, 2019, an OWCP hearing representative vacated the 

preliminary overpayment determination dated March 7, 2019 and remanded the case for further 

development. He instructed OWCP to contactOPM and request a copy of the Standard Form 2818 

submitted by appellant or a definitive statement indicating that appellant did not complete such 

document prior to or within 60 days of reaching age 65.

In letters dated September 23 and October 24, 2019, OWCP requested that OPM provide 

a copy of the Standard Form 2818 submitted to OPM within 60 days of appellant’s 65th birthday 
5

or provide a definitive statement on OPM letterhead indicating that the employee did not complete 

and return the Standard Form 2818 within 60 days of reaching his 65th birthday.

In a letter dated January 13, 2020, OPM indicated that it did not receive a Standard Form 

2818 from appellant within 60 days of reaching his 65th birthday.

On January 17, 2020 OWCP issued a preliminary overpayment determination finding that 

appellant had been overpaid in the amount of $8,863.13, because OLI premiums were not deducted 

from January 7, 2018 through January 28, 2019. It found that he was without fault in the creation 

of the overpayment. OWCP advised appellant that he could submit evidence challenging the fact 

or amount of the overpayment. It instructed him to complete a Form OWCP-20 to determine 

whether waiver should be granted, and if not, a reasonable repayment schedule would be 

formulated. OWCP informed appellant that he should provide supporting financial 

documentation, including copies of income tax returns, bank account statements, bills, pay slips, 

and any other records to support income and expenses. It provided an overpayment action request 

form and notified him, that within 30 days of the date of the letter, he could request a final decision 

based on the written evidence or a prerecoupment hearing. In a letter dated February 4, 2020,

appellant disagreed with the preliminary overpayment determination. He asserted that he did not 

submit the Standard Form 2818 election form within 60 days of his 65th birthday and in the absence 

of such election his life insurance would be deemed waived.

In an overpayment action request form dated February 9, 2020, appellant requested a 

prerecoupment hearing. He submitted a Form OWCP-20 dated February 9, 2020 and stated that 

he had a total monthly household income of $10,991.00, including $5,332.00 in OWCP benefits, 

$2,251.00 in Social Security Administration (SSA) benefits and $3,408.00 in other pension 

benefits. Appellantlisted his monthly expenses of $1,420.00 for mortgages, $300.00 for groceries, 

$200.00 for clothing, $300.00 for utilities and insurance, $300.00 for othermiscellaneous expenses 

and a monthly installment debt of $387.00 for an automobile. He listed two residential properties 

with a total mortgage balance of $525,000.00. Appellant reported $300.00 cash on hand, checking 

account balance of $18,262.00, savings account balance of $1,922.00, and stocks and bonds of 

$160,000.00. The prerecoupment hearing occurred on June 16, 2020. Appellant provided an 

online bank statement for January and February 2020 transactions. The bank statement indicated

payments for water utilities of $19.21, energy utilities of $52.59 and $105.28, homeowner’s 

association fees of $273.66, and credit card payments of $2,582.02.

In correspondence dated June 26, July 3 and July 12, 2020, appellant reiterated that he did 

not submit Standard Form 2818 within 60 days of his 65th birthday and in the absence of such 

election his life insurance would be deemed waived, and he would not be entitled to that type of 

life insurance. He cited to the Board’s holding in L.W.

4 and asserted that his claim was factually 

the same. 

By decision dated September 1, 2020, OWCP’s hearing representative finalized the 

preliminary overpayment determination, finding that appellant had received an overpayment of 

4 Docket No. 15-1170 (issued March 10, 2016) (the Board remanded the case to OWCP for further development 

because the evidence had not established the basis for the optional postretirement life insurance premiums as the 

signed form was not in the record). 
6

compensation in the amount of $8,863.13 for the period January 7, 2018 through January 29, 2019, 

because OLI premiums were not deducted. She further found that he was without fault in the 

creation of the overpayment, but denied waiver of recovery of the overpayment because the 

evidence of record failed to establish that recovery of an overpayment would defeat the purpose 

of FECA or be against equity and good conscience. In addressing appellant’s argument with regard 

to not submitting a Standard Form 2818, the hearing representative referenced the instructions for 

Standard Form 2818, which state that if you do not complete the form, you will have default 

coverage. She required recovery of the overpayment by deducting $1,092.00 from appellant’s 

continuing compensation payments every 28 days.

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 duty. 5 When an 

overpayment has been made to an individual because of an error of fact or law, adju stment 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 basic life insurance (BLI) and one or more of the options.7 The coverage for BLI 

is effective unless waived8 and premiums for BLI and OLI coverage are withheld from the 

employee’s pay.9 Upon retirement or upon separation from the employing establishment or being 

placed on 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 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 

5

5 U.S.C. § 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); S.B.,Docket No. 16-1795 (issued 

March 2, 2017).
7

(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).13

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.14 Any 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.15 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

ANALYSIS -- ISSUE 1

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation for which he was not at fault because OWCP failed to deduct OLI premiums from 

his FECA compensation.

Appellant submitted a Standard Form 2817 dated July 17, 2012 and indicated that he 

elected Option B -- additional life insurance at one times his pay.

On February 16, 2016 appellant informed OWCP that on his last pay statement there was 

no deduction for life insurance as there had been since 1999. He indicated that he did not cancel 

the life insurance policy and sought his life insurance be reinstated immediately. In a March 7, 

2019 preliminary overpayment determination, OWCP noted that it took action to update 

appellant’s health insurance coverage due to an open enrollment change, but failed to input the 

applicable OLI deduction causing deductions for his life insurance to stop on January 7, 2018. The 

correction to add life insurance code Y1 was made eff ective January 29, 2019. The Board, 

accordingly, finds that an overpayment of compensation has been established. 17

13 See C.A., Docket No. 18-1284 (issued April15, 2019); James J. Conway, Docket No. 04-2047 (issued 

May 20, 2005).

14 5 C.F.R. § 870.504(a)(1).

15 Id. at § 870.504(b).

16 5 U.S.C. § 8707(d); see also B.B. and S.B., supra note 12.

17 See J.N., Docket No. 13-1761 (issued July 1, 2014).
8

The Board further finds that this case is not in posture for decision regarding the period 

and amount of the overpayment.

It is unclear from the record which premiums were deducted, OLI premiums or postretirement basic life insurance (PRBLI). The record contains overpayment work sheets, but they 

fail to explain which premiums were deducted and the period of the deductions. 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.18

A claimant is entitled to an overpayment decision that clearly explains how the amount 

was calculated.19 The Board will, therefore, remand the case for OWCP to further explain its 

calculation of the period and amount of the overpayment. 

On remand, OWCP shall determine the exact period and precise amount of the 

overpayment of compensation. It shall then issue a new preliminary overpayment determination, 

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

provide supporting financial information.20 After this and other such further development as 

deemed necessary, it shall issue a de novo decision.21

CONCLUSION

The Board finds that OWCP properly found that appellant received an overpayment of 

compensation; however, the case is not in posture for decision regarding the period and amount of 

the overpayment. 

18 5 U.S.C. § 8707(d); see also B.B. and S.B., supra note 12.

19 R.B., Docket No. 20-0022 (issued October 28, 2020); O.R., 59 ECAB 432 (2008).

20 See L.K., Docket No. 20-0416 (issued November 12, 2020).

21 In light of the Board’s disposition of Issue 1, Issues 2 and 3 are rendered moot. 
9

ORDER

IT IS HEREBY ORDERED THAT the September 1, 2020 decision of the Office of 

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

for further proceedings consistent with this decision of the Board.

Issued: August 8, 2023

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