B-204975, JAN 5, 1982

B-204975: Jan 5, 1982

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RECORD SHOWS THAT THE EMPLOYEE REQUESTED THE INSURANCE AND NUMEROUS SF-50'S SHOWED EMPLOYEE WAS COVERED BY INSURANCE. EMPLOYEE WAS PARTIALLY AT FAULT FOR NOT QUESTIONING THE LACK OF DEDUCTIONS FOR INSURANCE. DID NOT HAVE BEFORE.". HER AGENCY FAILED TO DEDUCT THE PREMIUMS FOR THIS INSURANCE FROM HER PAYCHECK UNTIL THE ERROR WAS DISCOVERED IN LATE 1979. WILDEY RECEIVED NUMEROUS STANDARD FORM SF-50'S AND ALL BUT ONE STATED THAT SHE WAS COVERED BY THE REGULAR INSURANCE. THE ONE SF-50 WHICH INDICATED THAT SHE WAS NOT COVERED BY INSURANCE WAS CORRECTED AFTER THE DEPARTMENT OF THE ARMY DISCOVERED THAT INSURANCE PREMIUMS WERE NOT DEDUCTED. WILDEY'S LIABILITY WAS COMPUTED TO BE $897.73 FOR THE PERIOD BETWEEN JANUARY 1.

B-204975, JAN 5, 1982

DIGEST: OVERPAYMENTS WHICH RESULTED BECAUSE AGENCY FAILED TO DEDUCT REGULAR LIFE INSURANCE PREMIUMS FROM PAY OF EMPLOYEE MAY NOT BE WAIVED UNDER 5 U.S.C. SEC. 5584. RECORD SHOWS THAT THE EMPLOYEE REQUESTED THE INSURANCE AND NUMEROUS SF-50'S SHOWED EMPLOYEE WAS COVERED BY INSURANCE. THEREFORE, EMPLOYEE WAS PARTIALLY AT FAULT FOR NOT QUESTIONING THE LACK OF DEDUCTIONS FOR INSURANCE.

ANN WILDEY - WAIVER - NONDEDUCTION OF INSURANCE PREMIUMS:

IN THIS CASE WE HOLD THAT MS. ANN WILDEY, A CIVILIAN EMPLOYEE OF THE UNITED STATES ARMY, MAY NOT BE GRANTED WAIVER OF ERRONEOUS PAYMENTS MADE TO HER AS A RESULT OF HER EMPLOYING OFFICE'S FAILURE TO DEDUCT FROM HER PAY AMOUNTS FOR FEDERAL EMPLOYEE'S GROUP LIFE INSURANCE (FEGLI). THIS DECISION SUSTAINS A DENIAL OF HER APPLICATION FOR WAIVER UNDER 5 U.S.C. SEC. 5584 MADE BY OUR CLAIMS GROUP ON FEBRUARY 12, 1981.

MS. WILDEY HAD BEEN EMPLOYED BY HER AGENCY FOR 7 YEARS WHEN SHE FILLED OUT A STANDARD FORM 176-T, ELECTION, DECLINATION OR WAIVER OF LIFE INSURANCE COVERAGE ON FEBRUARY 7, 1968. SHE MARKED THE BOX FOR REGULAR INSURANCE, BUT NOT OPTIONAL INSURANCE, AND WROTE IN HER OWN HANDWRITING "I DO WANT REGULAR INSURANCE NOW. DID NOT HAVE BEFORE." HOWEVER, HER AGENCY FAILED TO DEDUCT THE PREMIUMS FOR THIS INSURANCE FROM HER PAYCHECK UNTIL THE ERROR WAS DISCOVERED IN LATE 1979. MS. WILDEY RECEIVED NUMEROUS STANDARD FORM SF-50'S AND ALL BUT ONE STATED THAT SHE WAS COVERED BY THE REGULAR INSURANCE. THE ONE SF-50 WHICH INDICATED THAT SHE WAS NOT COVERED BY INSURANCE WAS CORRECTED AFTER THE DEPARTMENT OF THE ARMY DISCOVERED THAT INSURANCE PREMIUMS WERE NOT DEDUCTED. MS. WILDEY'S LIABILITY WAS COMPUTED TO BE $897.73 FOR THE PERIOD BETWEEN JANUARY 1, 1971, THROUGH DECEMBER 31, 1979. THE RECORDS FOR FEBRUARY 1968 THROUGH 1970 WERE UNAVAILABLE AND THEREFORE MS. WILDEY HAS NOT BEEN CHARGED FOR THAT PERIOD. MS. WILDEY HAS REQUESTED WAIVER OF THE DEBT SHE OWES THE GOVERNMENT BECAUSE SHE DID NOT THINK SHE WAS COVERED BY INSURANCE.

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.

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. GENEVIEVE O'LEARY, B-202213, SEPTEMBER 10, 1981.

MS. WILDEY IN HER REQUEST FOR WAIVER ARGUES THAT IN HER MIND SHE CANCELLED HER INSURANCE REQUEST. SHE ALSO STATES THAT SHE WAS NOT AT FAULT FOR NOT QUESTIONING THE LACK OF DEDUCTION FROM HER LEAVE AND EARNINGS STATEMENTS SINCE SHE DID NOT THINK SHE HAD INSURANCE.

THE RECORD SHOWS THAT SHE ELECTED TO BE COVERED BY REGULAR LIFE INSURANCE. HOWEVER, MS. WILDEY HAS PRODUCED NO EVIDENCE SHOWING THAT SHE CANCELLED HER INSURANCE. SHE RECEIVED NUMEROUS SF-50'S WHICH INDICATED THAT SHE HAD REGULAR LIFE INSURANCE BUT SHE NEVER QUESTIONED THE ACCURACY OF THESE FORMS. WE HOLD THAT MS. WILDEY WAS PARTIALLY AT FAULT FOR FAILING TO QUESTION THE ACCURACY OF THE SF-50'S WHICH SHOWED THAT SHE WAS COVERED BY REGULAR LIFE INSURANCE. SINCE THE EMPLOYEE WAS PARTIALLY AT FAULT, THE REQUEST FOR WAIVER MUST BE DENIED.

WE ALSO NOTE THAT MS. WILDEY'S BENEFICIARY WOULD HAVE BEEN PAID THE LIFE INSURANCE HAD SHE DIED DURING THE PERIOD AFTER SHE ELECTED COVERAGE EVEN THOUGH NO PREMIUM PAYMENTS WERE DEDUCTED FROM HER WAGES. SEE 5 C.F.R. SEC. 870.203 (1981). WE DO NOT BELIEVE IT IS AGAINST EQUITY AND GOOD CONSCIENCE TO REQUIRE HER TO PAY FOR THE LIFE INSURANCE PROTECTION PROVIDED.

ACCORDINGLY, MS. WILDEY'S REQUEST FOR WAIVER IS DENIED.