B-203037, AUG 4, 1981

B-203037, AUG 4, 1981

DIGEST: IN VIEW OF TOTALITY OF CIRCUMSTANCES, EMPLOYEE WHO RECEIVED ERRONEOUS PAYMENTS FROM FEBRUARY 1968, TO APRIL 1976, WHEN PREMIUMS WERE NOT DEDUCTED FROM HER PAY FOR FEDERAL EMPLOYEES GROUP LIFE INSURANCE COVERAGE IS GRANTED WAIVER OF GOVERNMENT'S CLAIM AGAINST HER. EMPLOYEE IS NOT HELD AT FAULT FOR OVERPAYMENTS, EVEN THOUGH SHE SELECTED REGULAR COVERAGE ON LIFE INSURANCE FORM IN 1968, AND SUBSEQUENTLY RECEIVED 4 SF-50'S INDICATING SHE HAD COVERAGE. THE INSURANCE FORM INDICATES CONFUSION ON HER PART AS TO CHOICE, AND SHE HAD WAIVED ALL COVERAGE BEFORE 1968, AND WAIVED IT AGAIN AFTER NOTICE OF OVERPAYMENTS. SF-50'S EMPLOYEE SUBSEQUENTLY RECEIVED WERE ISSUED TO REFLECT UNRELATED PERSONNEL ACTIONS AND SHE RECEIVED NO OTHER CONFIRMATION OF COVERAGE AFTER COMPLETING FORM. ALSO, SHE VERIFIED A COMPUTER PRINT-OUT OF HER PERSONNEL RECORD IN 1975, WHICH SHOWED NO INSURANCE COVERAGE.

RUTHIE M. WHITE - WAIVER OF OVERPAYMENTS - FAILURE TO DEDUCT LIFE INSURANCE PREMIUMS:

THIS DECISION IS ON AN APPEAL OF OUR CLAIMS GROUP'S DENIAL OF A REQUEST UNDER 5 U.S.C. SEC. 5584 FOR WAIVER OF THE CLAIM OF THE UNITED STATES AGAINST RUTHIE M. WHITE, AN EMPLOYEE OF THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), FOR OVERPAYMENTS OF PAY. FOR THE REASONS THAT FOLLOW, WE CONCLUDE THAT WAIVER OF THE OVERPAYMENTS SHOULD BE GRANTED.

MS. WHITE IS A LIBRARY TECHNICIAN EMPLOYED BY NASA SINCE 1966. IN 1968, AN OPEN SEASON ON LIFE INSURANCE WAS DECLARED, WITH NEW OPTIONAL COVERAGE BEING MADE AVAILABLE TO FEDERAL EMPLOYEES. ALL EMPLOYEES WERE REQUIRED TO FILE A NEW STANDARD FORM 176-T, ELECTION, DECLINATION, OR WAIVER OF LIFE INSURANCE. AT THE TIME, MS. WHITE HAD NO COVERAGE UNDER THE FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI) PROGRAM. THE RECORD INDICATES THAT MS. WHITE COMPLETED THE SF-176-T ON FEBRUARY 12, 1968, BY FIRST MARKING THE BOX FOR DECLINING ALL INSURANCE, THEN ERASING THAT SELECTION AND MARKING THE BOX FOR REGULAR, BUT NOT OPTIONAL, LIFE INSURANCE COVERAGE.

ON FOUR OCCASIONS AFTER FEBRUARY 1968 - AUGUST AND OCTOBER 1968, OCTOBER 1972 AND OCTOBER 1975 - MS. WHITE RECEIVED A STANDARD FORM 50, NOTIFICATION OF PERSONNEL ACTION, ISSUED FOR VARIOUS REASONS UNRELATED TO INSURANCE COVERAGE STATUS. EACH SF-50 INDICATED THAT MS. WHITE HAD REGULAR LIFE INSURANCE COVERAGE UNDER FEGLI, ALTHOUGH NO PREMIUMS WERE EVER DEDUCTED FROM MS. WHITE'S PAY DURING THAT TIME. HOWEVER, IN JANUARY 1975, MS. WHITE WAS FURNISHED A COMPUTER PRINT-OUT RECORD OF HER PERSONNEL DATA WHICH INDICATED THAT SHE HAD WAIVED ALL INSURANCE COVERAGE. MS. WHITE SIGNED THIS FORM ON JANUARY 17, 1975, AS VERIFICATION OF ITS ACCURACY.

THE AGENCY REPORT INDICATES THAT THE DISCREPANCY BETWEEN INSURANCE COVERAGE AND ITS FAILURE TO DEDUCT PREMIUMS WAS NOT DETECTED UNTIL MARCH 1976, WHEN AN EMPLOYEE OF THE NASA PERSONNEL OFFICE COMPARED MS. WHITE'S AUTOMATED INDIVIDUAL EMPLOYMENT RECORD WITH THE INFORMATION IN HER PERSONNEL FOLDER. MS. WHITE WAS FIRST NOTIFIED OF THE PROBLEM IN MARCH 29, 1976, AND SHE REQUESTED A WAIVER OF THE INDEBTEDNESS BY MEMORANDUM DATED APRIL 20, 1976. OUR CLAIMS GROUP DENIED WAIVER BY LETTER DATED AUGUST 11, 1978 (CLAIM NO. Z-2711237).

THE PROVISION OF LAW AUTHORIZING THE WAIVER OF CLAIMS OF THE UNITED STATES AGAINST EMPLOYEES ARISING OUT OF ERRONEOUS PAYMENTS OF PAY, 5 U.S.C. SEC. 5584, PERMITS SUCH WAIVERS ONLY WHEN THE COLLECTION OF THE ERRONEOUS PAYMENTS WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES AND ONLY WHEN THERE IS NO INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE EMPLOYEE, OR ANY OTHER PERSON HAVING AN INTEREST IN OBTAINING THE WAIVER.

THERE IS NO DISPUTE IN THE PRESENT CASE THAT AN ADMINISTRATIVE ERROR DID OCCUR WHICH RESULTED IN THE NONDEDUCTION OF PREMIUMS, AND LIKEWISE THE RECORD CONTAINS NO INDICATION OF FRAUD, MISREPRESENTATION, OR LACK OF GOOD FAITH ON THE PART OF MS. WHITE. RATHER, THE CLAIMS GROUP DENIED WAIVER OF THE CLAIM BECAUSE MS. WHITE WAS FOUND TO BE PARTIALLY AT FAULT FOR THE ERRONEOUS PAYMENTS.

THE CLAIMS GROUP BASED ITS DENIAL OF WAIVER ON THE GROUNDS THAT, FIRST, THE SF-176-T SIGNED BY MS. WHITE CLEARLY INDICATED WHICH OPTION SHE HAD CHOSEN, AND, SECOND, THE PERSONNEL ACTION FORMS (SF-50) SHE SUBSEQUENTLY RECEIVED INDICATED THAT SHE HAD SELECTED REGULAR FEGLI COVERAGE. THUS, MS. WHITE WAS HELD TO HAVE BEEN ON NOTICE OF THE DISCREPANCY BETWEEN THE INFORMATION ON HER SF-50 AND THE NONDEDUCTION OF PREMIUMS, AND PARTIALLY AT FAULT FOR THE OVERPAYMENTS BY FAILING TO REPORT THE DISCREPANCY.

OUR OFFICE HAS HELD THAT FAULT EXISTS WITHIN THE MEANING OF 5 U.S.C. SEC. 5584 IF THE EMPLOYEE REASONABLY COULD HAVE BEEN EXPECTED TO KNOW THAT AN ERROR HAD BEEN MADE BUT FAILED TO TAKE CORRECTIVE ACTION. MICHAEL J. MCLAFFERTY, B-197632, AUGUST 6, 1980. THUS, WE HAVE HELD THAT IF AN EMPLOYEE IS GIVEN AN SF-50 SHOWING THAT HE HAS LIFE INSURANCE COVERAGE, BUT HIS LEAVE AND EARNINGS STATEMENTS SHOW THAT PREMIUMS WERE NOT WITHHELD, THE EMPLOYEE HAS NOTICE OF AN ERROR AND IS ORDINARILY CONSIDERED TO BE AT LEAST PARTIALLY AT FAULT IF HE FAILS TO PURSUE CORRECTIVE ACTION. JOHN J. DOYLE, B-191295, JULY 7, 1978.

CONSIDERING ALL THE CIRCUMSTANCES OF THE PRESENT CASE, HOWEVER, WE DO NOT BELIEVE THAT FURNISHING THE SF-50'S, STANDING ALONE, IS SUFFICIENT TO HOLD MS. WHITE AT FAULT FOR THE OVERPAYMENTS.

MS. WHITE'S CONDUCT HAS BEEN CONSISTENT WITH HER CONTENTION THAT SHE NEVER HAS WANTED LIFE INSURANCE COVERAGE AND BELIEVED SHE HAD WAIVED ALL COVERAGE IN 1968. THE AGENCY REPORT NOTES THAT SHE HAD WAIVED ALL SUCH COVERAGE IN HER PREVIOUS EMPLOYMENT WITH THE GOVERNMENT AND WAIVED IT AGAIN IN 1976, SHORTLY AFTER SHE WAS NOTIFIED OF THE ERRONEOUS PAYMENTS. IN ADDITION, AS NOTED ABOVE, MS. WHITE VERIFIED AS ACCURATE A COMPUTER LISTING OF PERSONNEL DATA IN JANUARY 1975, WHICH INDICATED THAT ALL COVERAGE HAD BEEN WAIVED. MOREOVER, THE LIFE INSURANCE FORM (SF-176-T) THAT SHE SIGNED ON FEBRUARY 12, 1968, INDICATES SOME CONFUSION ON MS. WHITE'S PART. THE BOX TO BE MARKED FOR DECLINING ALL INSURANCE COVERAGE SHOWS A MARK THAT IS PARTIALLY ERASED. THE BOX FOR DECLINING OPTIONAL INSURANCE BUT ELECTING REGULAR INSURANCE IS MARKED INSTEAD. SHE MAY WELL HAVE DONE THIS ON THE ASSUMPTION THAT SHE HAD PREVIOUSLY DECLINED REGULAR INSURANCE AND ONLY HAD TO DECLINE OPTIONAL AT THAT TIME.

WE NOTE FURTHER THAT MS. WHITE WAS GIVEN NO CONFIRMATION OF A CHANGE IN HER INSURANCE COVERAGE RIGHT AFTER SHE COMPLETED THE SF-176-T, EITHER BY A COPY OF THE COMPLETED FORM OR OTHERWISE, AND, OF COURSE, NO PREMIUM DEDUCTIONS WERE MADE FROM HER PAY TO PUT HER ON NOTICE OF DISCREPANCY. ADDITION, THE SF-50'S MS. WHITE RECEIVED AFTER 1968 WERE ISSUED TO REFLECT PERSONNEL ACTIONS UNRELATED TO INSURANCE COVERAGE. GIVEN HER BELIEF THAT SHE HAD WAIVED ALL COVERAGE, THERE THUS WAS NOTHING BEYOND THE CODED INFORMATION ON THE SF-50 TO ALERT MS. WHITE TO A CHANGE IN INSURANCE COVERAGE.

ACCORDINGLY, CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES IN THE PRESENT CASE, WE CONCLUDE THAT TOTAL WAIVER OF THE ERRONEOUS PAYMENTS SHOULD BE GRANTED. IT APPEARS THAT, BEGINNING IN SEPTEMBER 1978, MS. WHITE HAS BEEN REPAYING THE AMOUNT FOUND DUE IN $5 INSTALLMENTS EACH PAY PERIOD. IN VIEW OF OUR DISPOSITION OF THE CASE, MS. WHITE MAY APPLY TO THE AGENCY FOR A REFUND OF THE AMOUNT ALREADY PAID, IN ACCORDANCE WITH 5 U.S.C. SEC. 5584(C) AND 4 C.F.R. SEC. 92.5.