A hearing was held pursuant to notice, on May 28, 2009, in Ocala, Florida, by Barbara J. Staros, assigned Administrative Law Judge of the Division of Administrative Hearings.
For Petitioner: Olga C. Magnusen, pro se
For Respondent: Geoffrey M. Christian, Esquire
Whether Petitioner is entitled to receive retroactive retiree health subsidy payments from the Florida Retirement System in addition to those already received.
By letter dated February 23, 2009, Respondent advised Petitioner Olga Magnusen that she was eligible to receive retroactive Health Insurance Subsidy (HIS) benefits for a maximum of six months prior to the date on which she submitted her application for HIS. The letter relied upon Section 112.363(2)(d) and (9), Florida Statutes. The letter afforded Petitioner a point of entry to challenge Respondent’s decision.
Petitioner disputed Respondent’s decision and timely requested an administrative hearing. The request for hearing was forwarded to the Division of Administrative Hearings on or about April 3, 2009. A formal hearing was scheduled for May 28, 2009. The hearing took place as scheduled.
At hearing, Petitioner testified on her own behalf.
Petitioner's Exhibit 1 was admitted into evidence. Respondent presented the deposition testimony of one witness, Shirley Beauford. Respondent's Exhibit 1 was admitted into evidence.
The hearing was not transcribed. Respondent filed a Motion for Extension of Time in which to file its proposed recommended order. The motion was granted. Respondent timely filed its Proposed recommended Order which has been duly considered in the preparation of this Recommended Order. Petitioner did not file a post-hearing submission.
References to the Florida Statutes will be to the 2005 version unless otherwise noted.1/
The Division of Retirement (Division) is, and was at the times material to this case, the state agency charged with the responsibility of administering the Florida Retirement System (FRS).
Petitioner, Olga Magnusen, was employed by Florida International University (FIU) from February 18, 1974, until her retirement. FIU is an FRS-participating employer. Thus, by reason of her employment, Petitioner was enrolled in the FRS.
Mrs. Magnusen requested an estimate of her retirement benefits in September 2003. In response to this request, the Division audited Petitioner’s account and sent her an "Estimate of Retirement Benefit" for purposes of the Deferred Retirement Option Program (DROP). The benefit estimate was mailed to Petitioner’s address of record which was 11441 SW 83rd Terr, Miami, Florida 33173-3617 (Miami address).
Enclosed with Petitioner’s benefit estimate was an option selection document and an informational booklet or brochure entitled "Preparing to Retire," which reads in pertinent part as follows:
THE RETIREE PACKET
After your name is placed on the retired payroll to begin receiving monthly benefits, we will mail you a Retiree Packet. You should receive this packet around the same time you receive your first benefit payment. If you are a DROP participant, your name will not be placed on the retired payroll until your DROP participation ends and the Division receives a properly completed DROP Termination Notification, Form DP-TERM.
Retiree Packets contain the following items:
-An information letter
This letter summarizes your retirement information and lists the contents of your Retiree Packet. It also highlights issues of importance to you as a new retiree.
* * *
Health Insurance Subsidy Certification, Form HIS-1.
This form is used to apply for additional payment to assist you with some of the cost of maintaining health insurance. Please refer to the 'Health Insurance Subsidy' section on page 17 for eligibility information.
* * *
An After You Retire Booklet
This booklet contains helpful information and answer [sic] questions you might have as a new retiree. You should review and retain this booklet. If you have questions related to your FRS benefit that are not addressed by this booklet, please contact the Division.
* * *
HEALTH INSURANCE SUBSIDY (HIS)
The HIS is additional money available to eligible FRS retirees to help offset some of the cost of maintaining health insurance coverage. DROP participants are not eligible to receive HIS payments until after their DROP participation ends. . . .
* * *
The current subsidy is $5 per month for each year of creditable service at retirement.
The minimum HIS payment is $30 per month and the maximum is $150 per month. A Health Insurance Subsidy Certification, Form HIS-1, will be included in the Retiree Packet mailed so you may apply for the HIS benefit. You will receive your packet around the time you receive your first monthly benefit payment.
You must return a completed Form HIS-1 to the Division of Retirement within six months after your monthly retirement benefits start in order for the subsidy to be paid retroactive to your retirement date or, in the case of DROP retirees, to the month following your DROP termination date. If you do not return the form within this six month period, retroactive subsidy payments will be limited to a maximum of six months. You are responsible for obtaining certification of your health insurance coverage and applying for the HIS. The HIS benefit is included in your monthly FRS retirement benefit. (emphasis in original)
A copy of the booklet and forms sent to Petitioner are not reflected in Petitioner’s file, as the Division does not place copies of forms or booklets sent automatically.
Mrs. Magnusen completed the necessary forms to enter the DROP program and entered DROP on or about March 1, 2004.
By letter dated April 14, 2004, the Division sent another letter to Mrs. Magnusen advising her of the completion of the final calculation of her monthly FRS DROP accrual for the retirement benefit option she selected. The letter provided in pertinent part:
At the end of the DROP, your name will be placed on the regular retired payroll. You will receive information about withholding federal taxes from your retirement benefits, an application for the Health Insurance Subsidy and an application for the direct deposit of your monthly retirement benefit payment with the bank or financial institution of your choice.
The above-referenced letter was again sent to Petitioner’s Miami address referenced in paragraph 3 above.
By letter dated September 29, 2005, Petitioner notified FIU of her intention to terminate her employment effective on or about December 29, 2005.
By letter dated October 20, 2005, FIU provided the Division with a copy of Petitioner’s resignation letter and requested that the Division begin processing Petitioner’s DROP termination.
On October 24, 2005, the Division sent a letter with certain forms and informational material relevant to her DROP termination to Petitioner at the Miami address. The letter read in pertinent part as follows:
When your name is added to the retired payroll, you will receive a 'retiree packet' that contains an information letter, 'After you Retire' booklet, W-4P 'Witholding Certificate for Pension Payments', Health Insurance Subsidy application, and Direct Deposit Authorization. The retiree packet is mailed approximately one week before you receive your first monthly benefit.
By letter dated December 9, 2005, the Division acknowledged receipt of Petitioner’s DROP payout form in a letter mailed to Petitioner’s Miami address. The letter read in pertinent part as follows:
After your name is added to the retired payroll, you will receive a ‘retiree packet’ that contains an information letter, 'After you Retire' booklet, W-4P 'Witholding Certificate for Pension Payments', Health Insurance Subsidy application, and Direct Deposit Authorization. The retiree packet is mailed approximately one week before you receive your first monthly benefit.
In late December 2005, Mrs. Magnusen and her husband moved from Miami to 2044 Darlington Drive, The Villages, 32162 (The Villages address.) While Petitioner did not expressly testify that she notified the Division of her change of address, Mrs. Magnusen and her husband "notified people and organizations about our address change and made provisions with the Post Office to forward our mail from the old to the new address."
A state warrant dated January 6, 2006, in the amount of $51,483.36, Petitioner’s net lump sum DROP payment amount, was issued and mailed to Petitioner at the Miami address. The
warrant was endorsed by Petitioner for deposit on or about January 18, 2006. It is presumed, therefore, that the warrant was forwarded to The Villages address.
It is the Division’s practice to send each retiree added to the system a 'retiree packet' that includes, among other things, an application for the HIS and an explanation of the subsidy, as well as a booklet containing an explanation of all of the benefits available to retirees and beneficiaries under the FRS. The process of sending out retiree packets is automated, so that a packet is sent to every retiree and beneficiary when he or she are first entered into the system. Pursuant to this automated regular practice, Petitioner's retiree packet would have been sent in late January 2006.
Included in the retiree packet was an informational letter which included the following:
YOUR RETIREMENT PACKET INCLUDES:
'After You Retire' Brochure-PLEASE READ FOR ADDITIONAL INFORMATION
* * *
Health Insurance Subsidy Certification (Form HIS-1)
* * *
HEALTH INSURANCE SUBSIDY (HIS): It is your
responsibility to obtain certification of health insurance coverage and apply for the HIS. The HIS is money added to your retirement benefit to help pay the cost of
health insurance. The member or other payee who is the spouse or financial dependent of the member may be eligible if he/she has health insurance, Medicare, or CHAMPUS. Please read the instructions on Form HIS-1. If the HIS-1 form is not received by the Division within six months, retroactive subsidy payments will be limited to a maximum of six months.
(Emphasis supplied in original)
Also included in the retiree packet was an informational booklet entitled "After You Retire" which reiterated that it is the retiree’s responsibility to obtain health insurance coverage and apply for this benefit, and that a retiree will not automatically receive the HIS.
Ms. Shirley Beauford is a Benefits Administrator in the retired payroll section of the Division. She has worked at the Division for approximately 19 and one-half years. According to Ms. Beauford, a report is generated each month when the payroll is approved, which indicates which retirees have not participated in the HIS. Ms. Beauford reviewed the "hardcopy documentation" of the June 2006 list of retirees not receiving the HIS and saw Petitioner’s name on the list. The Division automatically sends a reminder letter about five months after the beginning of a person’s retirement benefits to those retirees who have not applied for the HIS. Because Petitioner’s name appears on the June 2006 list, Ms. Beauford is confident that Petitioner was sent the reminder, as it is the standard
practice of the Division to do so. There is no evidence that the Division deviated from its standard practice.
The reminder would have been sent to Petitioner’s address of record in June 2006. The record is not clear whether Petitioner’s address of record was the Miami address or The Villages address at that time.
Mrs. Magnusen does not recall receiving the packet and acknowledges that the nine-month period from the summer of 2005 to March 2006 was a tumultuous time for her and her husband. They moved, were affected by two hurricanes, and were confronted with some health problems.
Mrs. Magnusen also recalls making numerous phone calls during that time regarding her husband’s health insurance coverage and premiums because of some confusion regarding his coverage. Mrs. Magnusen believes these calls were made to both FIU and the Division. However, the Division does not administer health insurance coverage for retirees.
Twice a year, the Division automatically distributes a newsletter to all FRS retirees and beneficiaries. The HIS was specifically referenced in articles in the July 2007, January 2008, and July 2008 newsletters, including a reminder to retirees and beneficiaries to look under the summary of benefits and deductions on their statements for a "Health Ins. Subsidy" listing.
Respondent mails retired members a Statement of Benefit Payments at the end of January and July each year, and any other time the retiree’s benefit changes. The Division sent statements to Petitioner’s address of record in February 2006, June 2006, July 2006, January 2007, April 2007, July 2007, December 2007, and January 2008. None of the statements has a Health Insurance Subsidy listing under the summary of benefits and deductions section.
Additionally, the Division mails retired members an annual statement in January each year. These annual statements contain a category entitled "Health Ins. Subsidy." The amount of $0.00 is reflected on Petitioner’s 2006, 2007, and 2008 annual statements under the category "Health Ins. Subsidy." In contrast, the summaries reflect specific amounts under the category "Retirement Benefit."
There is no evidence of record to indicate that any of the statements or mailings of any kind from the Division to Petitioner were returned.
Mrs. Magnusen called the Division on or about January 5, 2009, to inquire about changing banks for the direct deposit of her FRS payments. During this telephone conversation, the Division’s representative reminded Petitioner that she was not receiving the HIS benefit. As Petitioner’s
insurance premiums were already being deducted, Petitioner’s HIS
application was taken over the phone. Petitioner began receiving the $150 per month HIS benefit effective January 30, 2009 and a six-month retroactive HIS benefit of $900.
On January 10, 2009, Mrs. Magnusen sent a letter to the Division requesting three years of retroactive HIS benefits retroactive to her DROP termination date.
By letter dated January 16, 2009, the Division’s Director informed Petitioner that retroactive HIS benefits are limited by law to six months, citing Section 112.363(9), Florida Statutes, as authority.
Petitioner sent another letter in response requesting further consideration of her request for a full retroactive HIS payment.
By letter dated February 23, 2009, the Division informed Petitioner that a detailed review had been completed of her retirement account, again informed that the retroactive payments are limited to six months, and provided Petitioner with a point of entry into the administrative hearing process.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2008).
The burden of proof in an administrative proceeding is on the party asserting the affirmative of the issue unless the
burden is established otherwise by statute. Young v. State, Department of Community Affairs, 567 So. 2d 2 (Fla. 3rd DCA 1990); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977). Petitioner has the burden of proof in this proceeding.
Section 112.363(2)(a), Florida Statutes, provides in relevant part that "[a] person who is retired under a state- administered retirement system . . . is eligible for health insurance subsidy payments provided under this section. "
Section 112.363(2)(d), Florida Statutes, provides in relevant part that "[p]ayment of the retiree health insurance subsidy shall be made only after coverage for health insurance for the retiree or beneficiary has been certified in writing to the Department of Management Services."
Section 121.363(9), Florida Statutes, reads as follows:
(9) BENEFITS.—Subsidy payments shall be payable under the retiree health insurance subsidy program only to participants in the program or their beneficiaries, beginning with the month the division receives certification of coverage for health insurance for the eligible retiree or beneficiary. If the division receives such certification at any time during the 6 months after retirement benefits commence, the retiree health insurance subsidy shall be paid retroactive to the effective retirement date. If, however, the division receives such certification 7 or more months after commencement of benefits, the
retroactive retiree health insurance subsidy payment will cover a maximum of 6 months.
. . .
There is no dispute that Mrs. Magnusen is entitled to receive, and does receive, the health insurance subsidy as described above. The only question is whether she should receive additional retroactive benefits amounting to approximately $5,400.
Section 112.363, Florida Statutes, does not impose a duty on the Division to repeatedly notify or remind retirees of the HIS. Despite this, the Division sends numerous notices or publications to all retirees specifically referencing the HIS.
Section 112.363(2)(d), Florida Statutes, places the responsibility on the member or beneficiary to provide written certification of health insurance coverage. Therefore, any estoppel argument that could be implied by Petitioner’s arguments are not supported by the record. The elements that must be established for the doctrine of equitable estoppel to apply against a governmental entity are (1) a representation as to a material fact that is contrary to a later-asserted position; (2) reliance on that representation; and (3) a change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon. Council Bros., Inc., v. City of Tallahassee, 634 So. 2d 264, 266 (Fla. 1st DCA 1994); See also State Department of Revenue v. Anderson,
403 So. 2d 397 (Fla. 1981) (equitable estoppel will be applied against the state only in rare instances and exceptional circumstances).
Section 112.363, Florida Statutes, limits retroactive payment of health insurance subsidy benefits to a maximum of six months. The Division has no authority to pay more than six months retroactive HIS benefits. This is a legislative limitation giving no discretion to the Division in this regard.
The evidence established that, in January 2009, Petitioner applied for the HIS, and has since been receiving the HIS. Petitioner has received the maximum retroactive HIS payment allowed by law.
Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is
That Respondent enter a final order denying Mrs. Magnusen’s request for additional HIS benefits retroactive to the date of her termination of DROP.
DONE AND ENTERED this 30th day of July, 2009, in Tallahassee, Leon County, Florida.
BARBARA J. STAROS
Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 2009.
1/ The 2005 Florida Statutes were in effect at the time Petitioner became eligible for the health insurance subsidy benefit. The language of the controlling statute, Section 112.363, has not since been amended in any way material to this case.
Olga C. Magnusen
Geoffrey M. Christian, Esquire Department of Management Services 4050 Esplanade Way, Suite 260
John Brenneis, General Counsel Department of Management Services Division of Retirement
All parties have the right to submit written exceptions within 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.
