STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MILDRED DAW, )

)

Petitioner, )

)

vs. ) Case NO. 89-0301

) DEPARTMENT OF ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this Matter came on for hearing in Pensacola, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on May 25, 1989.

APPEARANCES

The parties were represented as follows:

For Petitioner: Karren Lessard

15 West La Rua Street Pensacola, Florida 32521

For Respondent: Larry D. Scott

Senior Attorney

Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

STATEMENT OF THE ISSUES

The issue at the hearing was whether Petitioner is entitled to a premium refund of her health insurance premium.

PRELIMINARY STATEMENT

On November 6, 1987, Petitioner applied for a refund of health insurance premiums in the amount of $42.76 a month from July 1985 through November 1987. By letter dated, January 27, 1988, the Department informed Petitioner that it denied Petitioner's request. Petitioner requested a formal administrative hearing on the Department's denial. The request for hearing was forwarded to the Division of Administrative Hearings.

At the hearing, Petitioner testified in her own behalf and offered into evidence nine exhibits. Respondent presented one witness and offered three exhibits into evidence.

Petitioner and Respondent filed their proposed recommended orders on June 15, 1989, and June 16, 1989, respectively. The parties' proposed findings of

fact have been considered and utilized in the preparation of this Recommended Order except where such proposals were not supported by the weight of the evidence or were immaterial, cumulative or subordinate. Specific rulings on the parties' proposals are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The Petitioner, Mildred Daw, is a retired State employee. She is enrolled in the State of Florida, State Employees Group Health Self Insurance Plan (the Plan).

   
   

2. Prior to retiring, Petitioner amended her coverage in the Plan, changing from single coverage to family coverage. Petitioner modified her coverage so that her husband would be covered under the Plan. Petitioner's husband was under age 65 and qualified for Medicare Parts A and B. Petitioner was not qualified for Medicare coverage.

   
   

3. The premium for family coverage was $178.44 per month.

   
   

4. Petitioner began paying this amount shortly before she retired in December 1984.

   
   

5. By letter dated, July 8, 1985, the Division of State Employees' Insurance notified retirees that:

   
   

   If you are under age 65 and eligible for Medicare Part A and B because of disability, you may now be eligible for Medicare Coordination coverage at the reduced rate. Please notify our office if you are eligible and send a copy of your Medicare card. Your premium will be reduced the month following our receipt of your notice and the copy of your Medicare card.

   
   

6. The letter was sent to retirees and made no mention of surviving spouses or that a current spouse, who fit within the Medicare category, could qualify the insured for Medicare Coordination coverage.

   
   

7. The Medicare Coordination coverage is the only program that the State offers in which it is the spouse of the insured/retiree who can qualify the insured for new benefits or different coverage. In this case, the different coverage or new benefit was solely a reduction in premium. Otherwise, the benefits under the family coverage and the Medicare Coordination coverage were the same.

   
   

8. An ordinary person reading the letter would not have been placed on notice and would not have assumed that anyone other than the retiree was covered by the letter.

   
   

9. If Petitioner had immediately elected the Medicare Coordination coverage, her premium would have been reduced by $42.76 a month, beginning with the August 1985, payment.

   
   

10. The July 8, 1985, letter was mailed by first class mail to all retired State employees in the Plan. The business practice of the Division is to mail

    any such letters to the address of the retiree listed with the Division of Retirement and given to the Division of State Employees' Insurance or to the most current address the Division of Employees Insurance has for that particular retiree. In this case, the address which the Division of Retirement would have had on Petitioner in 1985 was her old address in Jacksonville. However, by July 1985, Petitioner had mailed the Division of State Employees' Insurance a change of address card with her new Pensacola address. She did not mail the Division of Retirement a change of address. There is no evidence as to which address the Respondent mailed the July 8, 1985, letter. Without such evidence Respondent is not entitled to a presumption of proper notice when a letter is mailed to a party with the correct address. Petitioner does not remember receiving the July 8, 1985, letter. She would have elected the Medicare Coordination coverage had she been aware of its availability.

    
    

11. Petitioner became aware of her eligibility for reduced premiums in October 1987, when she received an informational bulletin from the Division of State Employees' Insurance. The bulletin stated the premium rates for various types of insurance coverage, including the reduced premiums for family coverage with members of the family who are qualified for Medicare benefits.

    
    

12. Petitioner telephoned the Division and was instructed by Division personnel to send in a copy of her husband's Medicare card in order to establish her eligibility for the reduced premium. Petitioner sent a copy of her husband's Medicare card to the Division in October 1987.

    
    

13. On November 6, 1987, Petitioner requested a refund of excess insurance premiums paid from July 1985, through November 1987.

    
    

14. On December 28, 1987, Petitioner was informed by the Respondent that the earliest date a change in coverage could become effective was October 1987, because Petitioner had not applied for a change of coverage prior to that time. Petitioner was awarded an excess premium refund for the premium paid for November coverage.

    
    

15. The Rules governing the Plan are found in Chapter 22I-1, Florida Administrative Code. This Chapter generally requires that an employee or retiree perform an affirmative act, by completing an informational form and sending it to the Department, before any change in coverage can be effectuated. The reason for such a requirement is that the Department has no way of knowing the number of eligible employees or retirees, without being supplied that information from the insureds, so that the Plan's administrator can better manage the Plan's funds to provide an adequate amount for the payment of claims.

    
    

16. However, competing with this Rule is the Respondent's policy that a retiree who is otherwise eligible for certain benefits, but did not receive any notice of such eligibility is entitled to retroactive benefits. This policy is based on the Division's duty to administer the State's health plan, including notifying retirees of the availability of new types of coverage or benefits. The evidence showed that this policy takes precedence over the Rule when the Division has failed to notify an eligible retiree. In this case the Division failed to notify Petitioner of her eligibility for Medicare Coordination coverage due to her spouse's qualifications. Petitioner is therefore entitled to retroactive benefits beginning July 1985. Since the benefit of the Medicare Coordination coverage is a reduced premium, Petitioner is entitled to a refund of the excess premium of $42.76 a month from July 1985, through October 1987. The refund for that time period totals $1,154.52.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.

    
    

18. Chapter 22K-1, Florida Administrative Code, is the chapter governing the State's health plan. The rules provide for the eligibility for employees and retirees to participate in the Plan. Rule 22Y-1.201, Florida Administrative Code. The Rules also provide for enrollment, changes in coverage, effective date of coverage, and other changes in information. Rules 22K-1.202, 22K-1.203, 22K-

    1.204 and 22K-1.205, Florida Administrative Code. These Rules generally provide that an employee or retiree perform an affirmative act, by completing an informational form and sending it to the Department, before any change in coverage can be effectuated. The reason for such a requirement is that the Department has no way of knowing the number of eligible employees or retirees without being supplied that information from the insureds so that the Plan's administrator can better manage the Plan's funds to provide an adequate amount for the payment of claims.

    
    

19. However, competing with this Rule is the Respondent's policy that a retiree who is otherwise eligible for certain benefits, but did not receive any notice of such eligibility is entitled to retroactive benefits. This policy is based on the Division's duty to administer the State's health plan, including notifying retirees of the availability of new types of coverage or benefits. This policy takes precedence over the Rule when the Division fails to notify an eligible recipient.

    
    

20. The evidence did not disclose that Petitioner had received proper notice of her eligibility for the Medicare Coordination coverage.

    
    

21. First, the evidence did not demonstrate that the July letter was received by the Petitioner. Respondent relies primarily on the fact that the letter was mailed first class and asserts that it is entitled to a presumption that the letter was received based on that fact. However, to be entitled to such a presumption Respondent must show that the letter was properly addressed. There was no proof that the letter was addressed with the current address of Petitioner. The letter itself does not have an address on it. No envelope was introduced into evidence. The fact that the Respondent had a change of address card from Petitioner with her current address does not support a finding that the Respondent used that address, since the Department also utilized the Division of Retirement's list. No evidence was submitted to demonstrate that the Division of Retirement's list had been updated from its previous listings for Petitioner. Without such evidence it is impossible to determine whether the July letter was properly addressed. Without evidence that the letter was properly addressed Respondent is not entitled to a presumption of proper mailing and receipt. Colonades, Inc. v. Florida Department of Commerce, 357 So. 2d (Fla. 1st DCA 1978), State v. Florida Department of Commerce, Division of Employment, 351 So. 2d 769 (Fla. 3d DCA 1977).

    
    

22. Second, even assuming that Petitioner received the July letter, the language of the letter was not sufficient to put her on either actual or implied notice that she was eligible for coverage. The evidence is clear that there was no actual notice to Petitioner of her eligibility. Implied notice is inferred from the fact that a person has means of knowledge and the duty to use such means, but did not. Symons v. Department of Banking and Finance, 490 So. 2d 1322 (Fla. 1st DCA 1986). In this case, no such notice can be implied. The

    plain language of the letter precludes such an implication since there is no mention that it applies to anyone other than the retiree. The pertinent language of the letter does not mention spouses or dependents. Since this is the only program where a spouse or dependent of an insured can qualify the insured for coverage, a reasonable person would not otherwise interpret the language of the July letter to include the spouse. Petitioner would not have known from the language of the letter that she should inquire further of Respondent about her eligibility. No implied notice can be attributed to Petitioner.

    
    

23. Since the Division failed to notify Petitioner of her eligibility for Medicare Coordination coverage due to her spouse's qualifications, Petitioner is entitled to retroactive benefits, beginning July 1985. Since the benefit of the Medicare Coordination coverage is a reduced premium, Petitioner is entitled to a refund of the excess premium of $42.76 a month from July 1985, through October 1987. The refund for that time period totals $1,154.52.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order

refunding to Petitioner excess premiums paid to the Department in the amount of

$1,154.52.

DONE and ENTERED this 18th day of July, 1989, in Tallahassee, Florida.

DIANE CLEAVINGER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1989.

APPENDIX TO RECOMMENDED ORDER CASE NO. 89-301

1. The facts contained in paragraphs a, b, c, d, e, f, g, h, i, j and k of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material.

2. The facts contained in paragraphs l, m, and n of Petitioner's Proposed Findings of Facts are subordinate.

3. The facts contained in paragraph p of Petitioner's Proposed Findings of Facts were not shown by the evidence.

4. The facts contained in paragraph o of Petitioner's Proposed Findings of Fact are rejected.

5. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11 and 12 of Respondent's Proposed Findings of Fact are adopted

   in substance, in so far as material.

6. The facts contained in paragraphs 13 and 14 of Respondent's Proposed Findings of Fact are subordinate.

7. The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact were not shown by the evidence except for the fact relating to the letter being mailed first class mail.

COPIES FURNISHED:

Karren Lessard

15 West La Rua Street Pensacola, Florida 32521

Larry D. Scott Senior Attorney

Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Andrew McMullian III Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Augustus D. Aikens, Jr. General Counsel

Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Docket for Case No: 89-000301

Orders for Case No: 89-000301