P.S. Docket No. DCA 20-180

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

The Postal Service seeks to collect a debt from Rosetta Davis for the employee portion of her health insurance premiums during certain pay periods when Ms. Davis was in a leave without pay (LWOP) status. Ms. Davis challenged the debt and a hearing was held in July 2023. The evidence proves by a preponderance of the evidence that Ms. Davis is liable for the debt. Ms. Davis sought to be excused from the debt based on: (1) collection action taken by the Treasury Department when it offset her recent tax returns, and (2) procedural missteps by the Postal Service both before and during this proceeding. Neither argument is persuasive. The petition is therefore denied.

FINDINGS OF FACT

1. Ms. Davis began working for the Postal Service in 1994 (Exh. 10, see Line 15). In December 2018, the Postal Service placed her in a leave without pay status (Tr. 21). She remained in that status during the pay periods at issue in this petition (Exhs. 19, 21).   
2. In September 2019, Ms. Davis signed a Form 3111. By signing the form, Ms. Davis elected to continue having the Postal Service provide her then-existing health insurance plan. Ms. Davis further agreed to either pay the employee portion of her health insurance premium directly to the Postal Service or to incur a debt for that amount. (Exh. 16; Tr. 27–30).
3. The Postal Service did not collect the employee portion of Ms. Davis’s health insurance premium in pay periods 23-2019 through 01-2020 or pay periods 07-2020 through 11-2020¹ (Exhs. 19, 21). The Postal Service then issued two invoices for the employee share of Ms. Davis’s health insurance premiums:
4. Invoice No. 703065690 dated January 22, 2020, for $545.15 for PP 23-2019 to 01-2020 (Exh. 18), and
5. Invoice No. 703100907 dated June 10, 2020, for $568.15 for PP 07-2020 to 11-2020 (Exh. 20).
6. On June 25, 2020, the Postal Service issued a Notice of Involuntary Administrative Salary Offset for the June 10 invoice (Exh. 14). The record does not include a similar Notice for the January 22 invoice, but the parties agreed to waive any further procedural requirements for that debt and agreed to address both debts at the hearing (Tr. 14–17).  
7. In September 2021, Ms. Davis received an invoice for $5,374.14 to collect for overdrawn annual leave (Exh. 3 at 5)² . That invoice is not part of this petition. In November 2021, Ms. Davis also received two letters from the Treasury Department seeking to collect debts of $147.72 and $738.60 (Exh. 3 at 6–7). 

DECISION

Under the Debt Collection Act, the Postal Service has the initial burden to prove the existence and amount of an alleged debt. In a case involving health insurance premiums, the Postal Service must establish that (1) the employee was enrolled in the Federal Employee Health Benefit (FEHB) program, and (2) the Postal Service did not collect premiums from the employee in the relevant pay periods. Jacques v. United States Postal Service, DCA 22-70, 2022 WL 18134846 (December 16, 2022). Here, there is no dispute as to either of these questions. And because there is no dispute on these questions, a rebuttable presumption is established that the Postal Service paid the employee’s portion of the FEHB premiums to the insurance company for the covered pay periods. Holly v. United States Postal Service, AO 14-404, 2015 WL 13647624 (May 11, 2015). No evidence submitted by Ms. Davis at the hearing was sufficient to overcome the presumption. I therefore conclude that the Postal Service has met its burden of proof.
Ms. Davis raised two defenses. First, she argued that the debt has already been collected, citing the offset of her tax returns in 2020–22 in the amounts of $1,663 and $245 (Tr. 20). The Postal Service, however, showed that Ms. Davis had other debts unrelated to this petition, including a $5,374 debt for overdrawn annual leave. And there is no evidence linking the amount collected by the Treasury Department to the debts relevant to this dispute. Nothing in the record suggests that Ms. Davis’s debts for her health insurance premiums were ever referred to the Treasury Department for collection. Rather, those debts stayed with the Postal Service for collection, eventually resulting in the docketing of this petition under 39 C.F.R. Part 961. Thus, any collection action by the Treasury Department would not have been for the health insurance premiums debt.
Second, Ms. Davis contended that the debt should be waived because the Postal Service did not follow proper procedures (Tr. 34). As an example, she cited the Postal Service’s failure to explain the basis for each of the debts (Tr. 36). This argument is not supported by the record. Each of the invoices in the record, including those related to the health insurance premiums as well as the debt for overdrawn annual leave, include a description of the basis and the amount of the debt.
Ms. Davis also argued that in June 2020, she tried to negotiate with the Postal Service before filing a petition (Tr. 42–43; Exh. 2). She wanted to claim a financial hardship but was allegedly unable to negotiate a payment schedule because of the COVID pandemic. Ms. Davis also wrote to the Labor Representative handling this petition in September 2021 again asking for “understanding and leniency.” But these requests—even if they were reasonable and went unanswered—do not justify relief from the debt. At best, they might now justify a repayment schedule on favorable terms for Ms. Davis based on her financial situation. And as addressed below in the Order, I am ordering the parties to do just that by negotiating a reasonable repayment schedule.
At the hearing, Ms. Davis argued that this petition should be suspended pending final resolution of cases she has pending before the Office of Workers’ Compensation Programs (OWCP) and the Equal Employment Opportunity Commission (EEOC). As to the OWCP case—which involved continuation of pay—the parties previously agreed that case did not have any bearing on the outcome of this case (Tr. 55). As for the EEOC case, the parties also agreed that this petition could proceed to a hearing even though that case remains pending (Tr. 55). And later in the hearing, Ms. Davis expressed her relief to have these issues finally resolved (Tr. 59). There is thus no basis to defer issuing this decision until the OWCP and the EEOC issue decisions in Ms. Davis’s cases. If, however, Ms. Davis receives a decision from either OWCP or the EEOC that materially affects the debts underlying this petition, she may contact the Postal Service to discuss that issue. She may also ask the Judicial Officer Department to reopen this petition.

ORDER

The petition is denied. The Postal Service may collect the debt by involuntary administrative salary offset. Before collection action begins, however, the petition is remanded to the parties for the negotiation of a repayment schedule. If the parties are not able to negotiate a repayment schedule, they should notify my office. I will then reopen the petition for the purpose of setting a repayment schedule.