Upon due notice, a disputed-fact hearing was held in this case on October 27, 2008, in Ocala, Florida, before Ella Jane P. Davis, a duly-assigned Administrative Law Judge of the Division of Administrative Hearings.
For Respondent: Sonja P. Matthews, Esquire
Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260
Whether Petitioner is entitled to a refund of state group life insurance premiums retroactive to the date she became
disabled and continuing through the date of approval of a waiver of premium based on disability.
$600.00, in life insurance premiums, was referred to the Division of Administrative Hearings on or about August 8, 2008. The Division’s file reflects all pleadings, notices, and orders before and after final hearing.
At the commencement of hearing on October 27, 2008, Petitioner’s then-very recent Motion in Opposition was considered. This written Motion, as orally amended at hearing, opposed the consideration of Respondent’s Exhibits 8, 9, and 10, which Respondent had provided to Petitioner in advance of hearing, pursuant to the Order of Prehearing Instructions.
Petitioner’s objection was based upon the documents arriving by mail only five days in advance of hearing. Oral argument was heard, and Petitioner’s Motion in Opposition was denied.
Also before evidence was taken, Respondent’s unopposed Motion to Allow Witness [referring to Adrienne Bowen] to Appear by Telephone was granted.
Likewise, the undersigned explained to Petitioner the nature of requests for official recognition, and Respondent’s Motion for Official Recognition was taken under advisement, pending any written objection filed by Petitioner within 10 days
of the close of hearing. Petitioner’s timely-filed written objection to Respondent’s Request for Official Recognition was denied by an Order entered on October 31, 2008.
Upon Petitioner’s successive oral objections to two different notaries at the remote location, a third notary acceptable to Petitioner was provided by Respondent for purposes of administering the oath to Adrienne Bowen, and for transmitting the exhibits Ms. Bowen reviewed in the course of her testimony. Ms. Bowen testified by telephone for each party. Respondent’s Exhibits 1, 10, and 11, were admitted, out of order, upon Ms. Bowen’s testimony, and all timely post-hearing compliances were met for this purpose.
Luz Veintidos also was called as a witness, and she provided oral evidence on behalf of each party.
Petitioner testified on her own behalf, and Petitioner’s Exhibits 1-8, 11, 14-17, 19-20, 22-26, 28-31, 37-38, and 41-42,
were admitted in evidence.
Respondent also presented the oral testimony of Sandie Wade, and Respondent’s Exhibits 1, 8-9, 10-11, and 14, were admitted in evidence.
No transcript for the five and one-quarter hour hearing was provided.
Petitioner’s Proposed Recommended Order was timely-filed on November 12, 2008, together with an exhibit she represented as
“newly discovered evidence.” Respondent’s Proposed Recommended Order also was timely filed on November 20, 2008. It incorporated an objection to Petitioner’s unauthorized after- filed exhibit. Respondent’s objection is here treated as a motion. It is well taken and is hereby granted. Petitioner’s after-filed exhibit, attached to her Proposed Recommended Order, is hereby struck. It has not been considered.
Each party’s Proposed Recommended Order has been considered in preparation of this Recommended Order.
During her entire career with the State, Petitioner was employed by the Department of Corrections (DOC).
At all times material, DOC, like all State governmental agencies, had its own personnel office.
At all times material, the Division of Retirement (Retirement) handled all governmental agencies’ employees’ retirement issues.
At all times material, the State has provided its employees, including Petitioner at DOC, with various types of insurance through Respondent Department of Management Services (DMS), Division of State Group Insurance (DSGI), the Respondent herein.
For more than 20 years, ending January 1, 2007, the State of Florida provided state officials, employees and
retirees basic life insurance coverage through Prudential Insurance Company of America (Prudential).
Although Petitioner retired on full disability in mid- 2000, at all times relevant to these proceedings, Petitioner has continuously participated in the State Group Insurance Program’s (Program’s), life insurance plan (Plan). The Program is authorized by Section 110.123, Florida Statutes.
Because of enhanced benefits, employees were required to complete a new life insurance enrollment form during “open enrollment,” conducted in 1999, for coverage beginning
January 1, 2000.
Petitioner completed the life insurance enrollment form and dated it "10/04/99." Directly below Petitioner's signature on this enrollment form, the following statement appears:
Waiver of Premium for Disability
If you are totally disabled for a continuous
9 months and are less than 60 years of age at the time disability begins, Prudential will continue your coverage with no premium due, provided you report your disability within 12 months of its start and submit any required proof to Prudential.
The second page, last paragraph of the 1999, enrollment form provided an address and a toll-free telephone number for Prudential, and advised participants that the form was intended to provide a summary of benefits, as more completely set out in the certificate.
Petitioner produced the enrollment form in response to Respondent's request for production of documents. She identified her signature thereon at hearing, and had the enrollment form admitted in evidence as Exhibit P-1. She also admits in her Proposed Recommended Order that she signed it. Although her testimony waffled in some respects, on the whole, she testified to the effect that she had retained a copy of this form where she had access to it at all times material. She is, therefore, found to have had knowledge of its contents since 1999.
Petitioner testified that she never received either a life insurance policy nor a certificate of insurance, from Prudential or from any entity of Florida State Government, and that neither her DOC Personnel Office, Retirement, Florida First,1/ or DMS/DSGI advised her at the time of her retirement in mid-2000, that she could apply to Prudential for a life insurance premium waiver. However, Petitioner also had admitted in evidence as Exhibit P-2, a “Continuation/Termination Form” which she signed on “4-11-00,” stating a retirement date of “3- 10-00.” That form specifies that “. . . the amount of life insurance shall be $10,000 . . .” with a footnote reading, “This [referring to the $10,000, amount] would only apply if Waiver of Premium is not approved.” (Bracketed material supplied.)
Also, the credible testimony of Respondent’s witnesses and of exhibits in evidence show that a complete certificate of life insurance was mailed to Petitioner in a timely manner.
There is no proof that the insurance certificate varied the substance of the enrollment form as quoted in Finding of Fact 7. Indeed, the certificate provided, in pertinent part:
The Policyholder will continue the full premium for continuance of insurance in accordance with item 8 above, [referring to “Total disability commencing before age 60— Unlimited for Employee Term Life Insurance”] provided the employee furnishes written proof of such total disability when and as required by the Policyholder.
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Period of Extension Protection for a Disabled Employee—
one year after receipt by Prudential’s Home Office of written proof that his total disability has existed continuously for at least nine months, provided the employee furnishes such proof no later than one year after the later of (1) the date premium payments for the employee’s insurance under the Group Policy are discontinued or (2) the cessation of any extended death benefit under the provisions for “Extended Death Benefit for Total Disability” above, and
successive periods of one year each after the year of extension under (1), provided the employee furnishes written proof of the continuance of the employee’s total disability when and as required by Prudential once each year.
Only employees disabled before retirement and under 60 years of age were eligible for the premium waiver. Employees
who became disabled during retirement were not eligible for the waiver. By the terms of her enrollment form and certificate, if Petitioner did not notify Prudential before the twelfth month, she could not receive the waiver.
When, precisely, Petitioner became “totally disabled” for purposes of her State life insurance certificate’s definition is debatable, because for some time prior to her actual retirement date, she was working off and on while pursuing a “permanent total disability” determination, pursuant to the definition of that term as expressed in Chapter 440, Florida Statutes, The Florida Workers’ Compensation Law. Petitioner ultimately received the workers’ compensation ruling she sought, possibly before March 10, 2000. Petitioner’s last day of work was March 10, 2000, when, she testified, a superior had her forcibly removed from DOC property. Despite her assertion that she was not approved for in-line-of-duty retirement until September 1, 2000, Petitioner also testified that the State granted her retirement upon disability, effective April 1, 2000, and April 1, 2000, is the date put forth by Respondent as Petitioner's disability retirement date, as well. Upon that concurrence, it is found that Petitioner qualified for total disability for State life insurance purposes before retirement and that she qualified for the waiver by age at retirement.
When Petitioner retired on disability in 2000, employees of both DOC and of Retirement knew that she was retiring on disability. Retirement provided Petitioner with printed materials referring her to the insurance company and/or DMS/DSGI for insurance questions and stating that Retirement did not administer any insurance programs. There is no evidence Petitioner asked anyone about the waiver in 2000.
From her retirement date in mid-2000, until Prudential ultimately granted her a premium waiver in 2007, Petitioner paid the full life insurance premiums to the State Life Trust, either via deduction from her retirement or directly by her own check. From the date of her retirement through December 2006, Petitioner paid $4.20, per month for life insurance, and beginning January 1, 2007, through November 2007, she paid
$35.79, per month.
According to Petitioner, she only became aware of the availability of the potential waiver of premiums when she received a booklet during open enrollment in October 2007, advising her that beginning January 1, 2008, the State life insurance coverage would be provided through Minnesota Life Insurance. The specific language that caught her eye was:
No premium to pay if you become disabled --- If you become totally disabled or as defined in your policy, premiums are waived.
Petitioner conceded that there is no substantive difference between the foregoing instruction and the statement on her 1999, enrollment form for Prudential. (See Finding of Fact 7.)
Petitioner applied for the Minnesota life insurance, with premium waiver, triggering a series of bureaucratic decisions that maintained her continuous life insurance coverage by Prudential and permitted Petitioner to apply to Prudential for waiver of the life insurance premium as described in her 1999, enrollment form. Although bureaucratic delays occurred through DOC’s personnel office, Prudential accepted Petitioner’s proof of age, disability, etc., and granted the waiver of premiums based on disability.
The monthly premiums of $35.79, that Petitioner paid in October and November 2007, were retroactively reimbursed to her by the State, based upon Prudential's receipt of Petitioner's waiver package on October 3, 2007. Beginning in December 2007, Prudential activated the waiver of premium, so that Petitioner has not had to pay any premium since.
Adrienne Bowen, a DSGI manager of Prudential contracts for twenty years, testified that, in 1999-2000, Prudential’s waiver did not apply until after nine months of continuous disability and after the participant had reported the disability to Prudential, and after Prudential had approved the waiver of premiums. She further testified that she believed that there
was no provision for the waiver to apply retroactively. For this testimony, Ms. Bowen relied upon Exhibit R-11, a “Group Life Administration Manual,” which had been devised so that the State life insurance plan would be consistently administered.
On the foregoing issues, The Group Life Administration Manual states, in pertinent part:
WAIVER OF PREMIUM
When an employee becomes disabled and is unable to work because of a disability, the employee may be eligible to extend the group life coverage without premium payments.
In order to extend coverage, the employee must submit proof of disability within the period shown on the Group Contract (generally at least 9 months but less than 12 months after the total disability starts). If the proof is accepted, you may stop the premium on behalf of the employee’s group coverage.
We recommend that premium payments continue for that employee until a decision is made regarding the claim. (Emphasis in original.)
However, Ms. Bowen also testified that DSGI and Prudential now allow an insured to request the waiver at any time after nine months of continuous disability, without automatic denial if the employee’s first request is not made within 12 months after she first becomes disabled. This was done in Petitioner's situation in 2007.
Prudential did not refuse to waive premiums because Petitioner’s application was not made within 12 months of total
disability. However, the premiums refunded related back only to the first day of the month in which she made application for waiver.
Petitioner seeks a reimbursement for overpayment of premiums from April 1, 2000, to September 30, 2007. Her first request to Respondent for an administrative hearing appears to have been made on or about May 12, 2008. After several levels of internal agency “appeals,” the cause was referred to the Division of Administrative Hearings on or about August 28, 2008.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this cause, pursuant to Sections 120.569 and 120.57(1), Florida Statutes, (2008).
Petitioner is seeking reimbursement of premiums from the State, which is a change in the status quo. Accordingly, she has the burden of proof herein. Wilson v. Dep’t of Administration, Div. of Retirement, 538 So. 2d 139, 141-142, (Fla. 4th DCA 1989); Department of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).
The "State Group Insurance Program" is created in Section 110.123, Florida Statutes. DMS/DSGI is the State agency charged in Section 110.123, Florida Statutes, with the
regulation and administration of the State Group Insurance Program.
Section 110.123, Florida Statutes (2007), also provides, in pertinent part:
(4) PAYMENT OF PREMIUMS; CONTRIBUTION BY STATE; LIMITATION ON ACTION TO PAY AND COLLECT PREMIUMS.—
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(g) No administrative or civil proceeding shall be commenced to collect an underpayment or return an overpayment of premiums collected pursuant to this subsection unless such claim is filed with the department within 2 years after the alleged underpayment or overpayment was made. For purposes of this paragraph, a payroll deduction, salary reduction, or contribution by an agency is deemed to be made on the date the salary warrant is issued. (Emphasis supplied)
This portion of the statute did not substantively change from 1990 to 2008, and, contrary to an early theory of Petitioner, which she has apparently abandoned in her Proposed Recommended Order, this statutory section applies to all forms of State group insurance, including her State group life insurance.
At Respondent DMS/DSGI’s request, certain 1990 legislative staff reports have been officially recognized. From these, it can be gleaned that, prior to the first enactment of this portion of the statute, the Agency sometimes used a four- year statute of limitation and sometimes used a three-year
statute of limitation, from general law and/or a then-existing rule, depending upon whether the claim was its own for underpayment or was an employee’s claim for overpayment. The 1990 legislative amendment was intended to set a uniform limitation period. The most comprehensive report submitted is a 1990 Senate Analysis and Economic Impact Statement, which reads, in pertinent part:
The bill limits the period to two years for filing an administrative claim or civil action to . . . refund an overpayment of premium. The two-year period of time runs from the time the alleged . . . overpayment was ‘made.’ Consequently, any employee who detects an overpayment of premium must file a claim with the Division of State Employees’ Insurance, Department of Administration, [DSGI’s predecessor agency] within two years after the overpayment was made. (Emphasis and bracketed material supplied.)
With or without the Staff Analysis, the meaning of the statute is clear to the effect that a participant of the State Group Insurance Program (Petitioner) must file with Respondent for a refund within two years of overpayment of premiums or her claim is barred.
Petitioner seems to put forth two arguments: First, she contends that because the enrollment form she signed and the certificate of insurance do not recite or paraphrase the statute’s two-year limitation, her request for refund should not be barred. Second, she contends that State government had a
duty to re-advise her at the time of her retirement in 2000, that she could apply to Prudential for a waiver of premium, and that since no one in State government re-advised her, she should not be barred from a total refund of premiums.
The facts as found establish that Petitioner had actual knowledge of the availability of the premium waiver in 1999, and that at all times material, she also had a clear means to apply for a waiver of premiums, but failed to apply until October 2007.
Petitioner’s assertion that, besides the existence of the statute, State government had an obligation to reiterate or refer to the limiting statute in the insurance, retirement, and active employee brochures, enrollment form, or certificate of insurance, is without merit. Contracts of insurance cannot vary a statute, just as they are not necessary to implement a statute.
One can sympathize concerning Petitioner’s assertion that State government should have advised her of her disability rights with regard to Prudential at the time she retired, but sympathy does not retroactively alter Petitioner’s responsibility. Just as Petitioner maintains that, “If I did not know what to ask for, I could not ask for it,” likewise, State government could not answer a question not timely asked by Petitioner.
While the morass of State benefits can be daunting, employees have at least the obligation to ask those in decision- making positions if there is any other benefit to which they may be entitled, before assuming in silence that there are none. If Petitioner had provided credible evidence that she had inquired, in 2000, of anyone at DOC Personnel, Retirement, or DMS/DSGI whether she could get some relief from paying her life insurance premiums or whether there were any other benefits with regard to any of her insurance benefits to which she might be entitled and if she had been told “no,” or given mis-information by someone in State government, there might be some theory upon which she might prevail, but there is no such evidence here. Moreover, even mis-information by a State employee usually is not grounds for altering the status quo after the fact. Salz v. Dept. of Mgmt. Servs., Div. Of Ret. 432 So. 2d 1376, (Fla. 3rd DCA 1983); Austin v. Austin, 350 So. 2d 102 (Fla. 1st DCA 1977); and N. Am. Co. v. Green, 120 So. 2d 603 (Fla. 1959).
Petitioner had notice in 1999, that the waiver was available. She almost certainly received a certificate in 2000, saying the same thing. She had knowledge either once, and probably twice, before she retired on disability that the waiver was available. She had knowledge and means to apply, but did not apply until October 2007. Petitioner is charged with knowledge of the facts and representations contained in the
enrollment form that she signed, even if she did not read it or forgot about it. See Breckenridge v. Farber, 640 So. 2d 208 (Fla. 4th DCA 1994); Resmond v. State of Florida, Department of Administration, Office of State Employees Insurance, DOAH Case No 87-1485 (RO: 5/29/87; FO: unavailable); Zammiello v.
Department of Administration DOAH Case No. 85-0583 (RO: 12/31/85; FO: unavailable ); and Lopez v. Department of Management Services, DOAH Case No. 03-0437 (RO: 6/3/03, Adopted In Toto in FO: 6/17/03). (Note that the Department of Administration preceded DMS/DSGI as the state agency responsible for the management of the state group insurance program.) Even as to implied notice (and herein, we have actual notice) it was stated in Florida Masters Packing, Inc. v. Craig, 739 So. 2d 1288, 1291 (Fla. 4th DCA 1999), that, “ . . . a person has no right to shut his eyes or ears to avoid information, and then say that he has no notice; that it will not suffice the law to remain willfully ignorant of a thing readily ascertainable by whatever party puts him on inquiry, when the means of knowledge is at hand.” There is no reason the two-year limitation statute should not apply to Petitioner.
Clearly, Section 110.123(4)(g), Florida Statutes, is one which bars any right to reimbursement of any premiums unless the claim is filed within two years of the alleged premium overpayment. If it is a “non-claim statute,” as Respondent
contends, it bars reimbursement of all premiums paid prior to the claim being filed. Respondent urges an interpretation that the bar exists from the date of retirement, April 1, 2000, to the October 3, 2007, request for waiver.
On the other hand, if Section 110.123(4)(g) is a “statute of limitations,” it bars only reimbursement of premiums that were paid more than two years prior to the claim being filed with Respondent. Herein, Petitioner filed her claim with Respondent on May 12, 2008, for an administrative proceeding.
Respondent relies on Special Disability Trust Fund, Department of Labor and Employment Security v. Robbins Manufacturing Company, 484 So. 2d 54, 56 (Fla. 1st DCA 1986), and State ex rel Victor Chemical Works, 74 So. 2d 560, 562 (Fla. 1954), to assert that Section 110.123(4)(g), Florida Statute, is a statute of non-claim, as opposed to a statute of limitations.
Respondent’s cases and argument are not persuasive in light of the clear language of Section 110.123 (4) (g), and the quoted legislative report. (See Conclusions of Law 28-29).
Furthermore, the Agency’s and Prudential’s approach to this particular case does not sustain a concept of an absolute bar stretching back to Petitioner's 2000, date of retirement. Respondent asserts that it has a “consistent” policy that the waiver cannot be applied retroactively or otherwise varied from its Group Life Administration Manual. However, the Manual has
never been adopted as a rule, and its provisions are neither clear, nor its application consistent, so as to be accorded the normal deference due an agency’s procedures or an agency’s interpretation of its statutory authority. The only language in the Group Life Administration Manual portion pointed-to by Ms.
Bowen that could possibly be interpreted as providing that the premium waiver could not apply retroactively, is that which states, “If the proof is accepted, you [meaning Respondent] may stop the premiums on behalf of the employee’s group coverage.” (Bracketed material provided. See Finding of Fact 21.) That language actually says nothing about reimbursement. It only prospectively stops premium collection/payment. That said, the Manual admitted in evidence is not accurate for Prudential’s or Respondent’s policies in this case. Neither entity currently applies a 12 months’ limitation on applications for premium waivers. Prudential accepted the application for waiver seven years after Petitioner’s retirement and processed it.
Prudential then retroactively (to the date of her application for the waiver) refunded her premiums. Herein, Prudential accepted the October 2007, application for waiver; granted it effective December 2007; and refunded two months' worth of premiums. Moreover, the process has always contemplated annual or more frequent proofs of total disability by the employee, with concomitant opportunities for Prudential to deny the waiver
at each point. This policy and procedure is significantly different than the situations protected in the cases cited by Respondent where an end to all claims, past and future, were cut off.
The controlling language of Section 110.123(4)(g), Florida Statutes, is: “No administrative . . . proceeding shall be commenced to . . . return an overpayment of premiums collected . . . unless such claim is filed with the department within 2 years after the alleged . . . overpayment was made.” This statutory language also is significantly different than that utilized in the statutes interpreted by the cases cited by Respondent as establishing statutes of non-claim. This
statutory language establishes a “rolling” statute of limitation.
Therefore, it is concluded that Petitioner, having filed for an administrative proceeding with Respondent Department on May 12, 2008, could, at most, recover only those premiums she paid between May 12, 2006, and May 11, 2008. Since she has been refunded two premiums, and so, in effect, has paid no premiums from October 1, 2007, to date, she is only entitled to recover premiums she paid from May 12, 2006, to October 1, 2007. All prior premiums are forfeited due to the Section 110.123(4)(g), Florida Statutes, statute of limitation.
RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order which calculates the State group life insurance premiums Petitioner paid between May 12, 2006, and October 1, 2007, and orders payment to Petitioner of that amount within 30 days of the final order.
DONE AND ENTERED this 23rd day of December, 2008, in Tallahassee, Leon County, Florida.
ELLA JANE P. DAVIS
Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 2008.
1/ At some point between 2000, and 2008, DMS/DSGI outsourced some functions to this entity. This outsourcing does not affect the present case.
2/ See Finding of Fact 19, concerning how some of this was refunded.
Sonja P. Matthews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260
John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
