In the Matter of the Petition by

M. P. JACKSON
135 East 24th Street
at
Tulsa, OK 74114-2407
P.S. Docket No. DCA 04-166

APPEARANCE FOR PETITIONER:
Michael P. Jackson
135 East 24th Street
Tulsa, OK  74114-2407

APPEARANCE FOR RESPONDENT:
Robert McCoy
Labor Relations Specialist
United States Postal Service
3030 NW Expressway, Suite 1042
Oklahoma City, OK  73198-9401

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Michael P. Jackson, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets, dated November 5, 2004, from his postmaster.  This Notice stated the Postal Service's intention to withhold $623.08 from Petitioner's salary to recover unpaid health benefits premiums.

            A hearing was held in Oklahoma City, Oklahoma on January 19, 2005.[1]  The Postal Service presented testimony from two Human Resources Specialists.  Petitioner testified on his own behalf and both parties relied on documents that had previously been filed.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  Petitioner suffered a work-related knee injury in August 2003.  After a period of evaluation and treatment, he had surgery and was unable to work from January 31 – February 10, 2004.  During that period he received workers’ compensation payments from the Office of Workers’ Compensation Programs (OWCP), Department of Labor.  (Tr. 8-9, 38; PS Ex. 3).[2]

            2.  Petitioner has been enrolled in a Federal employee’s health insurance program since 1993.  His carrier is PacifiCare of Oklahoma.  (PS Ex. 5).

            3.  Under the Federal Employees Health Benefits Program (FEHBP), part of the cost of an employee’s health insurance is paid by the employer and the remainder of the premiums is deducted from the employee’s pay each pay period.  When an employee is being paid workers’ compensation by the OWCP during an absence from work, administration of the employee’s health benefits is transferred to the OWCP, which makes the premium deduction from the compensation payments.  When the employee returns to work, administration of the employee’s health benefits is transferred back to the employee’s agency.  (Tr. 8-10, 16; PS Ex. 15).

            4.  On February 4, 2004, the OWCP notified the United States Postal Service Injury Compensation Office in Oklahoma City by letter that the OWCP was picking up, i.e., making the deduction for, Petitioner’s health insurance premiums.  The Postal Service Human Resources office in Oklahoma City then sent Petitioner a letter so informing him.  (Tr. 9, 16; PS Exs. 1 and 2).

            5.  By letter dated February 17, 2004, after Petitioner had returned to work, the OWCP notified the Postal Service Injury Compensation Office in Oklahoma City that Petitioner’s health benefits enrollment was transferred back to the Postal Service.  Because of an error in inter-office communication, however, Petitioner’s Human Resources office either did not become aware of this, or did not take action to begin withholding the premiums from Petitioner’s pay, until June 2004.  (Tr. 10-13, PS Ex. 4).

            6.  Petitioner’s pay records show that no health benefits premiums were deducted from his pay in pay periods 6–14 of 2004.  The total amount of premiums for those pay periods would have been $573.03.  In pay period 5 of 2004, $63.67 was deducted, but Petitioner was at work for only part of that pay period and the full amount should not have been deducted because OWCP took a deduction for the portion of that pay period during which he was receiving workers' compensation.  The amount of deduction by the Postal Service for pay period 5 should have been only $50.05.  (Tr. 17-22; PS Exs. 7, 8 and 9).

            7.  Petitioner’s pay records also show that deductions for health benefits were taken from his pay by the Postal Service in each of pay periods 1 through 4 of 2004.  The total amount deducted for these pay periods was $287.22.  (Tr. 26-27).

            8.  On October 4, 2004, Petitioner was issued a debt notice in the amount of $623.08, with an attached invoice explaining that the amount equaled $50.05 for pay period 5 plus $63.67 for each of pay periods 6 through 14 (PS Exs. 10 and 11).

            9.  On November 5, 2004, Petitioner was issued the Notice of Involuntary Administrative Salary Offsets for the same amount (PS Ex. 12).

            10.  Petitioner had health benefits coverage from PacifiCare of Oklahoma at all times after February 10, 2004.  Sometime in either January 2004 or in early February 2004, Petitioner attempted to fill a prescription at a pharmacy and was told he did not have insurance coverage.  The record is unclear as to whether Petitioner was covered by PacifiCare from January 1 – February 10, 2004.[3]

DECISION

            Petitioner does not dispute that he owes the premiums for pay periods 6-14 of 2004, but argues that the Postal Service likewise owes him $287.22 for deductions taken from his pay in pay periods 1-4 of 2004.  His position is that all the confusion in this matter resulted from the Postal Service’s administrative errors, and the pay issues for the entire period from the beginning of calendar year 2004 should simply be resolved in this case.[4]

            Respondent’s position is that the only time period relevant to this case is from February 10, 2004, which was in pay period 5 of 2004, through pay period 14 in June 2004.  For that period, there is no dispute that Petitioner did have health insurance benefits and no premiums were deducted from his pay in pay periods 6-14.  Therefore, Respondent contends, Federal regulations governing the FEHBP make it clear that Petitioner owes the alleged debt.

            As to the earlier period, January 1 – February 10, 2004, Respondent does not concede that Petitioner was uncovered during this time, but if he was Respondent contends that he must pursue a remedy in some other forum, as there is no jurisdiction in this Debt Collection Act case to consider what amounts to Petitioner’s “counterclaim” for money owed to him.

            As noted above (see Finding #10), I cannot conclude from this record whether Petitioner was covered by PacifiCare from January 1 – February 10, 2004.  Further, the record establishes no connection between the Postal Service’s administrative error that led to the alleged debt, and the status of Petitioner’s health insurance coverage before February 10, 2004.  Therefore, even assuming that there is authority in this forum to rule that a setoff is appropriate, this record does not support it.[5]

            Respondent’s evidence is sufficient to prove the alleged debt.  The amount of the debt appears to have calculated incorrectly, however.  Respondent has charged Petitioner $50.05 for pay period 5 (see Finding #8).  But $63.67 was already deducted from his pay for that pay period (see Finding #6).  Rather than owing $50.05 for that pay period, Petitioner is entitled to a credit of $13.62, which should be subtracted from $573.03, the amount owed for pay periods 6-14.  Respondent may collect $559.41 from Petitioner’s salary.

Bruce R. Houston
Chief Administrative Law Judge

[1] The hearing was conducted by the undersigned Administrative Law Judge via speaker telephone from Arlington, Virginia.  All other participants, including the court reporter, were present in a conference room at the hearing site.

[2] References to the hearing transcript are “Tr._.”  Documents filed by Respondent with the Answer, and in a supplemental filing, will be identified as “PS Ex._.  Documents filed by Petitioner will be identified as “Pet. Ex._.”

[3] Respondent presented a letter from PacifiCare, dated December 28, 2004, stating that Petitioner had continuous health insurance benefits with PacifiCare “for the entire year of 2004.”  This letter was sent to the Postal Service Human Resources Office in Oklahoma City in response to a telephone inquiry.  (Tr. 23, 30; PS Ex. 13).  Petitioner presented two documents titled “Certificate of Group Health Plan Coverage,” that he received from PacifiCare on December 15, 2004, in response to his telephone inquiry.  The first states that his coverage began January 9, 1993, and ended January 1, 2004.  The second states that coverage began February 10, 2004, and is continuing.  (Tr. 27, 40-41; Pet. Ex. A).

[4] Pay period 1 of 2004 was actually entirely in December 2003 (PS Ex. 8).  Therefore, even if Petitioner is correct in asserting that he had no insurance coverage from January 1 – February 10, 2004, the premiums for that period would have been something less than the amount he claims.

[5] Petitioner submitted the documents discussed in fn. 3 only the day before the hearing.  At the close of the hearing, because Respondent had not had time to look into the matter further, the parties were encouraged to explore this together and attempt to reach some agreement before a decision was issued.  Neither party has been heard from since the hearing.