P.S. Docket No. AO 14-267


April 17, 2015

In the Matter of the Administrative Offset Petition

STEPHEN C. TENG v. UNITED STATES POSTAL SERVICE

P.S. Docket No. AO 14-267

APPEARANCE FOR PETITIONER:
Stephen C. Teng

APPEARANCE FOR RESPONDENT:
Daniel Pinto
Labor Relations Specialist

INITIAL DECISION

Petitioner, Stephen C. Teng, a former employee of Respondent, United States Postal Service, filed a Petition under 39 C.F.R. Part 966 challenging the Postal Service’s $3,077.09 debt assessment.  The Postal Service sought administrative offsets to collect that assessed debt for unpaid health insurance premiums and unearned annual leave.  On March 5, 2015, I presided by telephone over a hearing in which Mr. Teng and one Postal Service witness testified.  I grant the Petition in part and deny it in part.  After crediting Mr. Teng with previous payments, I find that the Postal Service may recover $679.47 by administrative offset.

FINDINGS OF FACT

  1. The Postal Service employed Mr. Teng as a mail processing clerk until he retired on January 31, 2013, under a special retirement incentive program (Resp. Exhs. 1-3; Tr. 38, 43-46).
  2. On October 25, 2010, Mr. Teng sustained multiple injuries in a non-work related automobile accident (Pet. Exhs. 1-4, 6; Tr. 42).
  3. The injuries sustained by Mr. Teng prevented him from being able to perform the duties of his job, and he never returned to work thereafter (Resp. Exh. 9; Resp. Answer Exh. 11; Tr. 41-43).  The Social Security Administration found that Mr. Teng was disabled due to the injuries sustained in the automobile accident, and awarded him disability benefits (Pet. Exh. 6; Tr. 43).
  4. Between the October 2010 automobile accident and October 2011, Mr. Teng used and the Postal Service paid all the sick leave and annual leave he had accumulated.  After exhausting his leave, Mr. Teng was in a leave without pay (LWOP) status until his retirement.  (Resp. Exh. 4; Tr. 16-22, 41, 44, 57).  Although Mr. Teng provided medical documentation to his supervisor to justify his sick leave use, he did not provide medical documentation for purposes of seeking a disability retirement or waiver of overdrawn annual leave, nor did he request either (Tr. 34, 37-38, 44-46, 61-65).
  5. At the time of his retirement, the Postal Service had paid Mr. Teng $1,316.93 for 52 hours of unearned annual leave (Resp. Answer Exh. 11; Resp. Exh. 8; Tr. 19-22, 61).
  6. Mr. Teng participated in the Federal Employees Health Benefits Program (FEHB) and was covered by federal health insurance while he was in LWOP status.  The Postal Service notified Mr. Teng that his health benefits would continue for one year from the time he began LWOP unless he acted to terminate coverage earlier, and that if his health benefits continued, he would be responsible to pay the employee portion of the premiums.  At the conclusion of that one-year period, the Postal Service ended Mr. Teng’s FEHB coverage.  (Resp. Exhs. 4, 5; Tr. 18, 30-31, 53, 58).
  7. The employee portion of the health insurance premiums for the time in which Mr. Teng was covered by FEHB, but remained in LWOP status, amounted to $1,760.97 (Resp. Answer Exh. 11; Resp. Exh. 8; Tr. 16-18).
  8. After the Postal Service sent Mr. Teng four invoices, on December 31, 2013, it issued him a Notice of Intention to Collect a Debt By Administrative Offset Under the Debt Collection Act for $3,077.09 (Resp. Answer Exh. 10; Tr. 23).
  9. On January 30, 2014, in response to a request from Mr. Teng, the Postal Service’s Accounting Service Center determined that the assessed debts were valid, and sent an accompanying letter explaining the debt calculations (Resp. Answer Exh. 11; Tr. 23). 
  10. In February and May, 2014, Mr. Teng sent checks to the Postal Service for a combined amount of $733.40 to pay for part of the health insurance premium debt (Resp. Exhs. 8, 9; Tr. 23-24).
  11. In August 2014, offsets totaling $348.10 were taken from Mr. Teng’s Social Security disability payments and from his pension for payment towards the health insurance premium debt.  Those collections included a $94.81 collection fee assessed by the U.S. Treasury that the Postal Service did not credit against the debt (Resp. Exhs. 8, 9; Tr. 24-25, 32-33, 60).

DECISION

To recover FEHB premiums, the Postal Service must prove that the employee was enrolled in FEHB and that it failed to collect the employee’s insurance premium share for the same coverage period.  Once enrollment and failure to collect the employee’s share of premiums are established, a rebuttable presumption applies that the Postal Service complied with its own regulations and federal law regarding its payment of FEHB premiums during the coverage period, and the employee becomes liable for the debt.  See Leroy J. Saunders, Jr. v. U.S. Postal Service, P.S. Docket No. AO 14-307 (I.D. February 24, 2015): 5 C.F.R. § 890.502(a).

The Postal Service proved this portion of its case.  Mr. Teng was covered by health insurance under the FEHB while he was on LWOP and did not pay the employee portion of the health insurance premiums during that time (Finding 6).  The Postal Service proved that the unpaid premiums totalled $1,760.97 (Finding 7).

A retiring employee’s negative annual leave balance equates to a salary overpayment, entitling the Postal Service to recover the monetary value of that overdrawn annual leave under the Debt Collection Act.  See Laneda Pitts, P.S. Docket No. AO 14-60 (I.D. August 5, 2014).  To recover, the Postal Service must satisfy an initial burden that it made the annual leave salary payments, the amount of the payments, and that the employee was not entitled to the payments.  See Glenda A. Higgins, P.S. Docket No. AO 13-376 (I.D. February 27, 2014).

The Postal Service met that initial burden by proving that it paid Mr. Teng  $1,316.93 for 52 hours of annual leave that he had not earned when he retired (Findings 4-5).  Accordingly, absent a valid defense, the Postal Service is entitled to the amount of the debt that it proved.  However, Mr. Teng asserts a defense for which he bears the burden of proof, and which I find excuses the debt.  See Matthew J. Williams, Jr., P.S. Docket No. AO 13-375 (I.D. March 20, 2014).

The provision for recovery of unearned annual leave is found in the Employee and Labor Relations Manual (ELM) at section 512.72:

        512.72 Collection for Unearned Leave

        512.721 Refund

        Separating employees who are indebted for unearned annual leave or sick leave must refund the amount paid to them for such unearned         leave. If employees do not make refunds, deductions are made from any funds that are due them.

        512.722 Exception

        Collection is not required in cases of death or in the case of separation due to a disability that prevents an employee from returning to duty         or continuing in the Postal Service.

Mr. Teng contends that the section 512.722 exception to the Postal Service’s recovery for payment of unearned annual leave should apply to excuse the debt because his separation was caused by a disability that prevented him from returning to duty or continuing in the Postal Service.  I agree.

Based on Mr. Teng’s testimony and the Social Security Administration’s disability determination, I have concluded that Mr. Teng’s retirement was due to a disability (the injuries he sustained in the automobile accident) which prevented him from being able to return to duty (Finding 3).  The Postal Service provided no evidence to the contrary  although I warned the parties that I expected such evidence to be presented at the hearing.  See Order and Memorandum of Telephone Conference, January 16, 2015 at 2

Had the Postal Service been informed that Mr. Teng retired due to a disability, it would have excused any debt for unearned annual leave (Resp. Answer Exh. 11 at 3; Tr. 34).  Mr. Teng did not so inform the Postal Service however, at the time of his retirement (Finding 4), and accordingly, the Postal Service did not invoke the exception to excuse the debt.  Once a postal official at the Accounting Services Center became aware of the disability issue, he pursued application of ELM § 512.722 with the appropriate office, the Long Island District’s Human Resources Office, but his referral was ignored (Tr. 35-36).  Therefore, because ELM § 512.722 applies to Mr. Teng, his overdrawn leave refund obligation is excused.

I have found that Mr. Teng is liable for $1,760.97 for unpaid FEHB premiums, and not liable for $1,316.93 for 52 hours of paid but unearned annual leave.  Mr. Teng is entitled to credit against his $1,760.97 liability for the $733.40 he paid against that debt (Finding 10) and for the $348.10 offset from his Social Security disability and pension payments (Finding 11).1  The Postal Service is entitled to collect the $679.47 balance of the debt by administrative offset.  The Petition therefore is granted in part and denied in part.

ORDER

The Postal Service is permitted to collect $679.47 by administrative offset. 

The Postal Service is prohibited from collecting the remainder of its $3,077.09 debt assessment by administrative offset.

Gary E. Shapiro
Administrative Judge


 

1 A $94.81 charge included in the offsets was retained by the U.S. Treasury and without explanation not credited to Mr. Teng’s account (Finding 11).  The Postal Service has not argued much less proved that the charge should be excluded from Mr. Teng’s credits against this debt (see Tr. 25, 32).  Accordingly, I credit Mr. Teng with the $94.81.