B-167875, OCT. 31, 1969

B-167875: Oct 31, 1969

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BACK PAY- DEDUCTIONS FROM BACK PAY EMPLOYEE'S CLAIM FOR AMOUNT DEDUCTED FOR GROUP HEALTH BENEFITS FROM BACK PAY HE RECEIVED IN ACCORDANCE WITH 5 U.S.C. 652 AND 5 U.S.C. 5596 INCIDENT TO PERIOD OF UNJUSTIFIED SEPARATION FROM POST OFFICE DEPARTMENT IS AGAIN DISALLOWED. 5 U.S.C. 5596 AND 5 U.S.C. 652 PROVIDE THAT "FOR ALL PURPOSES" EMPLOYEE IS DEEMED TO HAVE PERFORMED SERVICE FOR AGENCY DURING PERIOD OF WRONGFUL SEPARATION. PARTICIPATION IN HEALTH INSURANCE PROGRAM IS ENTIRELY VOLUNTARY AND CLAIMANT COULD HAVE REMOVED HIMSELF FROM COVERAGE UNDER PROGRAM AT ANY TIME. PROVIDED THAT SUCH EMPLOYEE SHALL HAVE COVERAGE RESTORED TO SAME EXTENT AND EFFECT AS THOUGH REMOVAL HAD NOT TAKEN PLACE. ALVAREZ: THIS WILL REFER TO YOUR LETTER OF AUGUST 26.

B-167875, OCT. 31, 1969

COMPENSATION--POSTAL SERVICE--REMOVALS, SUSPENSIONS, ETC.--BACK PAY- DEDUCTIONS FROM BACK PAY EMPLOYEE'S CLAIM FOR AMOUNT DEDUCTED FOR GROUP HEALTH BENEFITS FROM BACK PAY HE RECEIVED IN ACCORDANCE WITH 5 U.S.C. 652 AND 5 U.S.C. 5596 INCIDENT TO PERIOD OF UNJUSTIFIED SEPARATION FROM POST OFFICE DEPARTMENT IS AGAIN DISALLOWED, AS SUBSEC. (B) (2), 5 U.S.C. 5596 AND 5 U.S.C. 652 PROVIDE THAT "FOR ALL PURPOSES" EMPLOYEE IS DEEMED TO HAVE PERFORMED SERVICE FOR AGENCY DURING PERIOD OF WRONGFUL SEPARATION; PARTICIPATION IN HEALTH INSURANCE PROGRAM IS ENTIRELY VOLUNTARY AND CLAIMANT COULD HAVE REMOVED HIMSELF FROM COVERAGE UNDER PROGRAM AT ANY TIME; AND AT TIME OF SEPARATION 5 U.S.C. 3009C, 1964 ED. PROVIDED THAT SUCH EMPLOYEE SHALL HAVE COVERAGE RESTORED TO SAME EXTENT AND EFFECT AS THOUGH REMOVAL HAD NOT TAKEN PLACE, AND APPROPRIATE ADJUSTMENTS SHALL BE MADE IN PREMIUMS, SUBSCRIPTION CHARGES, CONTRIBUTIONS, AND CLAIMS. SEE 41 COMP. GEN. 273.

TO MR. SOLOMON G. ALVAREZ:

THIS WILL REFER TO YOUR LETTER OF AUGUST 26, 1969, WHICH WE UNDERSTAND TO BE IN THE NATURE OF AN APPEAL OF A SETTLEMENT OF THE CLAIMS DIVISION OF THIS OFFICE OF AUGUST 18, 1969. THAT SETTLEMENT DISALLOWED YOUR CLAIM FOR CERTAIN AMOUNTS DEDUCTED FROM BACK PAY YOU RECEIVED IN ACCORDANCE WITH PROVISIONS OF 5 U.S.C. 652 AND 5 U.S.C. 5596, INCIDENT TO TWO SEPARATE INTERVALS DURING WHICH YOU WERE REMOVED AND THEN RESTORED TO SERVICE IN THE POST OFFICE DEPARTMENT. THE DEDUCTIONS WERE AS FOLLOWS: IN THE CASE OF THE FIRST SETTLEMENT BY THIS OFFICE, MAY 20, 1964, DEDUCTIONS FOR FEDERAL EMPLOYEES' GROUP LIFE INSURANCE (FEGLI) PREMIUMS IN AN AMOUNT OF $41.25 AND FOR DEDUCTIONS FOR GROUP HEALTH BENEFITS, $87.30. IN THE CASE OF THE SECOND SETTLEMENT EFFECTED BY THE POST OFFICE DEPARTMENT ON OCTOBER 4, 1967, THE AMOUNT IN QUESTION IS $45.50 FOR LIFE INSURANCE PREMIUMS.

NEITHER THE BACK PAY LAW, 5 U.S.C. 5596, NOR THE PRIOR LAW AS SET FORTH IN 5 U.S.C. 652, NOR THE REGULATIONS IMPLEMENTING THEM, MAKES ANY SPECIFIC REFERENCE TO DEDUCTIONS FROM BACK PAY OF LIFE INSURANCE PREMIUMS OR HEALTH BENEFITS PAYMENTS WHICH WOULD HAVE BEEN DEDUCTED FROM AN EMPLOYEE'S PAY DURING A PERIOD OF UNJUSTIFIED SEPARATION FROM THE SERVICE HAD HE NOT BEEN SEPARATED. SUBSECTION (B) (2) OF 5 U.S.C. 5596 AND 5 U.S.C. 652, SO FAR AS PERTINENT HERE, PROVIDE, HOWEVER, THAT "FOR ALL PURPOSES" AN EMPLOYEE IS DEEMED TO HAVE PERFORMED SERVICE FOR THE AGENCY DURING THE PERIOD OF WRONGFUL SEPARATION.

WITH RESPECT TO THE HEALTH INSURANCE PROGRAM, IT IS FIRST TO BE NOTED THAT PARTICIPATION IN IT IS ENTIRELY VOLUNTARY. UNDER THE IMPLEMENTING REGULATIONS, SUBSECTION 5 CFR 890.304 (D), A MEANS EXISTS FOR CANCELLATION OF ENROLLMENT BY AN EMPLOYEE AT ANY TIME, EFFECTIVE ON THE LAST DAY OF THE PAY PERIOD AFTER THE PAY PERIOD IN WHICH THE CANCELLATION FORM IS RECEIVED BY THE EMPLOYING OFFICE. SIMILAR REGULATORY PROVISIONS HAVE BEEN IN EFFECT THROUGHOUT THE PERIODS DURING WHICH YOU HAVE BEEN REMOVED AND THEN RESTORED TO THE SERVICE. PRESUMABLY, HAD YOU WISHED TO REMOVE YOURSELF FROM COVERAGE UNDER THE HEALTH BENEFITS PROGRAM, YOU COULD HAVE EXERCISED THE PRIVILEGE.

THE HEALTH BENEFITS ACT MAKES SPECIFIC PROVISION FOR RIGHTS OF EMPLOYEES RESTORED TO DUTY AFTER WRONGFUL SEPARATION. AT THE TIME YOU WERE FIRST SEPARATED FROM THE SERVICE, FEBRUARY 19, 1963, TO OCTOBER 9, 1963, THE LAW (5 U.S.C. 3009C, 1964 ED.) PROVIDED THAT SUCH AN EMPLOYEE "SHALL NOT BE DEPRIVED OF COVERAGE OR BENEFITS FOR THE INTERIM BUT SHALL HAVE HIS COVERAGE RESTORED TO THE SAME EXTENT AND EFFECT AS THOUGH SUCH REMOVAL OR SUSPENSION HAD NOT TAKEN PLACE, AND APPROPRIATE ADJUSTMENTS SHALL BE MADE IN PREMIUMS, SUBSCRIPTION CHARGES, CONTRIBUTIONS AND CLAIMS.' ACCORDINGLY, OUR SETTLEMENT OF MAY 20, 1964, APPLIED THIS PROVISION OF THE LAW WHICH REQUIRED THAT ,COVERAGE BE RESTORED" AND APPROPRIATE ADJUSTMENTS MADE IN EMPLOYEE PAYMENTS. 41 COMP. GEN. 273.

IN 1964 THIS PROVISION OF THE LAW WAS CHANGED BY ENACTMENT OF PUBLIC LAW 88-284, SUBSECTION 1 (14), 5 U.S.C. 8908. UNDER THIS AMENDMENT THE RESTORED EMPLOYEE NOW HAS A CHOICE OF EITHER ENROLLING AS A NEW EMPLOYEE UPON RESTORATION TO SERVICE OR HAVING HIS COVERAGE RESTORED. ACCORDINGLY, AT THE TIME OF YOUR SECOND REINSTATEMENT, JULY 20, 1967, THIS AMENDMENT WAS APPLIED IN YOUR CASE. APPARENTLY, YOU ELECTED NOT TO HAVE HEALTH BENEFITS COVERAGE RESTORED AS IN EFFECT AT THE TIME YOU WERE SEPARATED ON DECEMBER 23, 1966, AND HEALTH BENEFITS PAYMENTS WERE NOT DEDUCTED FROM YOUR BACK PAY FOR THAT PERIOD OF SEPARATION.

WITH RESPECT TO THE DEDUCTIONS FOR LIFE INSURANCE PREMIUMS FROM BACK PAY, NEITHER THE LAW NOR REGULATIONS GOVERNING THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM MAKES ANY SPECIAL PROVISION AS TO THE STATUS OF EMPLOYEES RESTORED TO DUTY AFTER WRONGFUL SEPARATION. THE FEDERAL PERSONNEL MANUAL SUPPLEMENT 870-1, S4-2E, PROVIDES, HOWEVER, WITH RESPECT TO DEDUCTIONS FOR LIFE INSURANCE PREMIUMS FROM BACK PAY AS FOLLOWS:

"E. RESTORATION AFTER ERRONEOUS SUSPENSION OR REMOVAL. IF AN EMPLOYEE IS RETROACTIVELY RESTORED TO DUTY WITH PAY AFTER AN ERRONEOUS SUSPENSION OR REMOVAL, WITHHOLDINGS FOR THE PERIOD OF SUSPENSION OR REMOVAL WILL BE MADE FROM THE RETROACTIVE PAY ADJUSTMENT.' DECISIONS OF THIS OFFICE HAVE HELD THAT SUCH DEDUCTIONS ARE REQUIRED. 36 COMP. GEN. 225, B-132700, FEBRUARY 25, 1958; B-133942, APRIL 15, 1958; B 144070, NOVEMBER 17, 1961; B-152119, AUGUST 12, 1963.

IN THE CASE OF PAROCZAY V UNITED STATES, 369 F.2D 720 (1966), THE COURT OF CLAIMS UPHELD THE LEGALITY OF DEDUCTIONS OF LIFE INSURANCE PREMIUMS FROM BACK PAY OF AN EMPLOYEE RESTORED TO DUTY AFTER WRONGFUL SEPARATION. IN ITS OPINION, THE COURT INTERPRETED THE FEGLI STATUTE AS PROVIDING CONTINUOUS COVERAGE OF A WRONGFULLY SEPARATED EMPLOYEE DURING THE PERIOD OF HIS SEPARATION IN THE ABSENCE OF ANY ACTION BY THE EMPLOYEE TO CANCEL HIS POLICY EITHER BEFORE, DURING OR AFTER HIS SEPARATION.

THE LAW, 5 U.S.C. 8702, AND IMPLEMENTING REGULATIONS PROVIDE A SPECIFIC PROCEDURE FOR CANCELLATION OF A LIFE INSURANCE POLICY AT ANY TIME BY THE FILING, BY AN EMPLOYEE, OF A WAIVER WITH HIS EMPLOYING OFFICE. SIMILAR PROVISIONS HAVE BEEN IN EFFECT THROUGHOUT THE PERIOD HERE IN QUESTION. FIND NOTHING IN THE RECORD OF YOUR CASE TO INDICATE THAT YOU ACTED TO WAIVE LIFE INSURANCE COVERAGE AT ANY TIME DURING THE PERIOD IN QUESTION. THEREFORE, HAVING HAD THE CONTINUING BENEFIT OF INSURANCE COVERAGE IT WAS NECESSARY TO DEDUCT THE PREMIUMS FOR WHICH YOU WERE OBLIGATED FROM THE BACK PAY YOU RECEIVED.

ACCORDINGLY, WE FIND NO BASIS UPON WHICH TO REVERSE THE SETTLEMENT OF THE CLAIMS DIVISION OF AUGUST 18, 1969. WE POINT OUT THAT DECISIONS OF THIS OFFICE ARE FINAL AND CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT. HOWEVER, WE WOULD REFER YOU TO THE PROVISIONS OF 28 U.S.C. 1346 AND 28 U.S.C. 1491 FOR GUIDANCE AS TO POSSIBLE JUDICIAL REMEDIES WHICH ARE AVAILABLE TO YOU.