B-229294, Oct 7, 1988

B-229294, Oct 7, 1988

CIVILIAN PERSONNEL - Compensation - Overpayments - Error detection - Debt collection - Waiver DIGEST: An employee's indebtedness for nonpayment of Federal Employees Group Life Insurance premiums is waived under the provisions of 5 U.S.C. Sec. 5584 (Supp. IV 1986), where the individual is without fault and recovery would be against equity and good conscience. The indebtedness and subsequent overpayment occurred when the employee was retroactively granted life insurance coverage by the Office of Personnel Management.

Frank D. Slocum - Waiver - Insurance Premiums:

This decision is in response to a request for waiver under the provisions of 5 U.S.C. Sec. 5584 (Supp. IV 1986), for Mr. Frank D. Slocum, an employee of the Department of the Air Force. The waiver concerns nonpayment of Federal Employees Group Life Insurance (FEGLI) premiums. Waiver is granted since the individual was without fault and recovery would be against equity and good conscience.

BACKGROUND

On September 30, 1975, Mr. Slocum retired form the U.S. Secret Service. He was covered during his retirement by the FEGLI basic and standard optional insurance. Since Mr. Slocum was an annuitant, the basic insurance coverage premium was provided at no cost and the standard optional premium was withheld from his retired pay.

Mr. Slocum accepted a temporary appointment with the Department of the Air Force on October 23, 1975, and was subsequently granted a career appointment on October 3, 1976. Mr. Slocum then became eligible under the life insurance program as a full-time employee. However, based on erroneous information from his agency, Mr. Slocum waived his insurance coverage as an employee which also acted as a waiver of his annuity insurance coverage. Thus, Mr. Slocum was without insurance coverage until 1981 when, under the Federal Employee's Group Life Insurance Act of 1980, /1/ the agency began deducting life insurance premiums from Mr. Slocum's pay.

Mr. Slocum asked why the insurance premiums were being deducted from his salary since he already had coverage as an annuitant. When Mr. Slocum was informed that he had erroneously waived his insurance in 1976, he petitioned the Office of Personnel Management (OPM) to correct the error. He also asked OPM to grant him additional FEGLI coverage (optional additional and family optional) since he had been erroneously advised that he was not eligible for this coverage.

The OPM granted Mr. Slocum's request with a retroactive effective date of October 3, 1976, for the basic insurance, and April 6, 1981, as the retroactive effective date for the additional optional and family optional. The retroactive grant of insurance by OPM resulted in Mr. Slocum's indebtedness for past premiums in the amount of $4,332.92. The Department of the Air Force has recommended that we waive the debt under the provisions of 5 U.S.C. Sec. 5584 (Supp. IV 1986).

Opinion

The OPM, through its Associate Director for Compensation, has the authority to order correction of an error, mistake, or omission in the administration of the FEGLI programs, where it would be against equity and good conscience not to do so. 5 C.F.R. Sec. 870.102 (1988). Mr. Slocum received a favorable determination from OPM under this authority with a retroactive application to the date he first became eligible. See 5 U.S.C. Sec. 8702 (1982); 5 C.F.R. Sec. 870.203 (1988). Prior to the OPM determination, Mr. Slocum was not covered by the FEGLI program nor was he obligated to make payments through salary deduction. However, this determination by OPM raised a legal presumption that Mr. Slocum was covered by the basic insurance from October 3, 1976, and by the additional optional and family optional from April 6, 1981. Thus, Mr. Slocum was correspondingly overpaid for the amount of the insurance premiums that were not deducted from his salary, and such overpayments are subject to waiver by the Comptroller General of the United States under the provisions of 5 U.S.C. Sec. 5584 (Supp. IV 1986). Cf. Michael J. McLafferty, B-197632, Aug. 6, 1980.

Accordingly, since Mr. Slocum was without fault in this matter, and recover would be against equity and good conscience, his indebtedness in the amount of $4,332.92 is hereby waived.

/1/ Pub. L. No. 96-427, 94 Stat. 1831, Oct. 10, 1980