STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAROL C. BLEDSOE, )

)

Petitioner, )

)

vs. ) CASE NO. 83-2521

) DEPARTMENT OF ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

After proper notice to the parties, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Orlando, Florida, on January 18, 1984. The issue for consideration was whether Petitioner was legally required to repay a shortage in amounts deducted from her pay by her employer, a state agency, for insurance coverage during the period in question.

APPEARANCES

For Petitioner: Carol C. Bledsoe, pro se

2907 Lolissa Lane

Maitland, Florida 32751

For Respondent: Susan Tully, Esquire

Department of Legal Affairs The Capitol, Suite 1601 Tallahassee, Florida 32301

BACKGROUND INFORMATION

On April 29, 1983, Carol C. Bledsoe, Petitioner herein, filed a request for a hearing with Respondent, Department of Administration (D.O.A.), contesting a demand of an alleged overpayment of premiums for health insurance coverage through Respondent, to avoid cancellation of her health insurance policy. On August 5, 1983, D.O.A. accepted the petition and referred it to the Division of Administrative Hearings for hearing.

At the hearing, Petitioner testified in her own behalf, presented the testimony of Deborah H. Evans, Bill D. Morris, and Mary Alford, and introduced Petitioner's Exhibits 1 - 3. Respondent presented the testimony of Barbara Power.

RECOMMENDATION

That Petitioner, Carol C. Bledsoe, pay the underpayment of $345.78.

RATIONALE FINDINGS OF FACT

1. At all times pertinent to the issues here, the Petitioner, Carol C. Bledsoe, was a part-time employee of the University of Central Florida (U.C.F.)

   U.C.F. is an agency of the State of Florida, whose employees are eligible for participation in the State of Florida Employees Group Health Self-Insurance Plan (Plan), administered by Respondent, D.O.A.

   
   

2. On December 1, 1980, Petitioner applied for full family coverage under the Plan, with coverage to be effective January 1, 1981. The application form executed by Petitioner was submitted to the Benefits Coordinator at the personnel office at U.C.F. At the time of submission, that portion of the form reserved for "payroll clerk use only" was left blank. The Benefits Coordinator, after checking the form to insure all required information was supplied by the applicant, Petitioner, forwarded it to the payroll department at U.C.F. It was at that office that the payroll clerk inserted an erroneous deduction code on December 2, 1980.

   
   

3. The incorrect deduction code inserted was "0.2." the proper deduction code which should have been inserted to reflect Petitioner's status was "42."

   
   

4. Though the current Benefits Coordinator indicates an applicant who is a part-time employee, such as Petitioner here, is given, at the time application for coverage is made, a form to show what the correct deduction for the requested coverage will be, this calculation is made by the Benefits Coordinator for the employee based on a formula which calls for a different rate for part- time employees. A part-time employee's contribution to the premium (the amount deducted) is higher than that of a full-time employee. The current coordinator, Ms. Evans, cannot state that Petitioner got the described form when she applied, and Petitioner denies having received it. There is no evidence to show Petitioner received any indication of what the deduction should or would be until the deductions from her pay began on January 9, 1981, with the deduction for the pay period December 19, 1980 - January 1, 1981. At that time, the deduction made was $14.37. The corrected deduction should have been $19.52 per pay period.

   
   

5. Here, the deduction from Petitioner's pay was calculated on the erroneous basis that she was a full-time employee, thereby resulting in a smaller deduction that was correct. This insufficient deduction continued until the discrepancy was discovered due to an audit in March, 1983. The parties stipulate that the total shortage in issue is $345.78.

   
   

6. During the approximately 2 1/4 years that the improper deduction was being withheld from Petitioner's pay each pay period, Petitioner was fully covered under the full family coverage plan. During this period, she filed only one claim -- a small one for an injury to her son -- and was paid the amount claimed. During this same period, she underwent several inquiries into her pay, instigated by her, to correct other inaccuracies in her pay. At no time prior to the March, 1983 audit was the incorrect health insurance deduction discovered, and Petitioner had no indication that amount being deducted for that purpose was incorrect. From an examination of her biweekly employee's earning

   statement, there was no way she could have known her pay was in error in this particular.

   
   

7. Several factors contributed to the error. One of these was that personnel in the payroll department of U.C.F. were doing things wrong. Another was that Petitioner was not a typical employee, and her situation required specialized handling by personnel and payroll which was not given. None of these factors, however, was within the control of the Petitioner. Changes made in the procedures followed within the agency as a result of a reorganization in January, 1982 -- made as the result of the recognition of numerous payroll problems over several months involving numerous other employees on the insurance plan -- should prevent recurrence of Petitioner's situation. However, Petitioner was in no way responsible for the creating of her situation and acted in good faith throughout the entire period. When she was notified of the error, she immediately took the appropriate steps to correct it and now pays the appropriate premium for the desired coverage.

   
   

8. When an error is discovered, as happened here, the employee is notified that he or she has overpaid and the employee is reimbursed. On the other hand, if the employee has underpaid, as here, the employee is notified of the liability and advised of various settlement systems. If the employee desires to pay other than in one lump sum, periodic payments can be arranged in an amount not less than 3% of the employee's salary for not more than 24 months. The insurance office, under Respondent D.O.A., contends it has no authority to waive the reimbursement of the shortage and states that if Petitioner does not make up the shortage, here coverage will be terminated. If that happens, she will not be eligible to reenroll until the shortage is reimbursed.

   
   

9. Under the insurance plan in question here, the State is a self-insurer. Petitioner's contribution and that of her agency goes into a trust fund administered by Respondent and is used to pay benefits through Blue Cross, which processes the claims. Since in this case, Petitioner paid less than she should have as a part-time employee, the U.C.F. paid more than its appropriate contribution for her coverage.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

    
    

11. Section 22K-1.20(1), Florida Administrative Code, 1982 Annual Supplement, provides the vehicle for processing underpayment of premiums. It provides notifying the employee of the shortage and what steps may be taken by the State to cancel coverage in the event the shortage is not made up. These steps were followed here, and the Petitioner was properly notified of her right to contest the amount of underpayment by requesting a hearing under Section 120.57, Florida Statutes.

    
    

12. There is no statutory or rule provision for waiver of any amounts found owing under this program.

    
    

13. Petitioner argues that the underpayment was occasioned solely by and through the error of the employee of U.C.F. and not through any misrepresentation, falsification, or negligence on her part. The Respondent could not show that Petitioner was advised of the proper deduction at the time she made application. The Respondent conceded that from even a detailed review of her pay statement, she would not note any error. Without knowing what the

    correct deduction should be, Petitioner could reasonably assume that which appeared on here earnings statement was correct.

    
    

14. Accepting all of the above, and accepting arguendo, that because of the numerous other errors on insurance deductions testified to by Ms. Alford, a complete audit should have been done earlier before Petitioner's liability grew so large; there is still no lawful basis for waiving Petitioner's obligation to pay the premium for coverage which she received throughout the shortage period.

    
    

15. Neither estoppel nor laches is applicable in this case.

    
    

16. The parties have submitted proposed recommended orders which include proposed findings of fact and conclusions of law. The proposed findings and conclusions have been adopted to the extent that they are expressly set out in the Findings of Fact and Conclusions of Law above. They have been otherwise rejected as contrary to the better weight of the evidence, not supported by the evidence, irrelevant to the issues, or legally erroneous.

RECOMMENDED ACTION

Based on the foregoing, it is RECOMMENDED:

That a final order be issued requiring Petitioner, Carol C. Bledsoe, to pay the underpayment of $345.78, in accordance with Rule 22K-1.20(1), Florida Administrative Code.

RECOMMENDED this 31st day of January, 1984, in Tallahassee, Florida.

ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 1984.

COPIES FURNISHED:

Carol C. Bledsoe 2907 Lolissa Lane

Maitland, Florida 32751

Daniel C. Brown General Counsel

Department of Administration

435 Carlton Building Tallahassee, Florida 32301

Susan Tully, Esquire Randall A. Holland, Esquire Department of Legal Affairs 1601 The Capitol

Tallahassee, Florida 32301

Nevin G. Smith Secretary

Department of Administration

435 Carlton Building Tallahassee, Florida 32301

Docket for Case No: 83-002521

Orders for Case No: 83-002521