STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

1. PATRICK HALE, )

   )

   Petitioner, )

   )

   vs. ) CASE NO. 88-3466

   )

   STATE OF FLORIDA, ) DEPARTMENT OF ADMINISTRATION, )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice a formal hearing was conducted on November 2, 1988, at St. Augustine, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:

   
   

   APPEARANCES

   
   

   For Petitioner: N. Patrick Hale, M.D.

   175 Inlet Drive

   St. Augustine, Florida 32084

   
   

   For Respondent: William A. Frieder, Esquire

   Senior Attorney

   Department of Administration

   440 Carlton Building Tallahassee, Florida 32399-1550

   
   

   ISSUES AND INTRODUCTION

   
   

   This case involves a dispute as to whether the Petitioner underpaid the premiums due on his health insurance coverage and, if so, what action should be taken by the Department of Administration as a result of any premium underpayments.

   
   

   By notice dated March 18, 1988, the Department of Administration notified the Petitioner that the Department records "show a total underpayment of

   $1,117.81 for the coverage periods 9/86 through 9/87." At the formal hearing, over the objection of the Petitioner, the Department was permitted to offer evidence regarding the Petitioner's premium history (both the amounts due and the amounts actually paid) for the entire period of the Petitioner's employment with the State of Florida, a period which runs from May 1978 until October 1988.

   
   

   At the formal hearing the Department of Administration presented the testimony of one witness and offered several exhibits, all of which were received. The Petitioner did not present any evidence, but did present oral argument on his own behalf. The parties were allowed 10 days from November 3, 1988, within which to file their post-hearing submissions with the Hearing

   Officer. The Department of Administration timely filed Proposed Findings Of Fact. Those findings are specifically addressed in the appendix to this recommended order. The Petitioner did not file any post-hearing submission.

   
   

   FINDINGS OF FACT

   
   

   Based on the evidence received at the formal hearing, I make the following findings of fact.

   
   

   1. From May 1, 1978, until August 1, 1978, the Petitioner requested and received family coverage under the State Group Health Self-insurance Plan. From November 1, 1978, until November 1, 1985, the Petitioner requested and received individual coverage under the State Group Health Self-Insurance Plan. From November 1, 1985, until the date of the hearing, the Petitioner requested and received family coverage under the State Group Health Self-Insurance Plan.

      
      

   2. From May 1, 198, until July 1, 1984, the Petitioner was a part-time employee of the State of Florida, working .25 of a full-time equivalent position. Accordingly, his premiums for health insurance coverage under the State Group Health Self-Insurance Plan during this period should have been paid on the basis of employment in a .25 full-time equivalent position.

      
      

   3. From July 1, 1984, until at least the date of the hearing, the Petitioner has been a part-time employee of the State of Florida, working .20 of a full-time equivalent position. Accordingly, his premiums for health insurance coverage under the State Group Self-Insurance Plan during this period should have been paid on the basis of employment in a .20 full-time equivalent position.

      
      

   4. During the period beginning May 1, 1988, and continuing through October of 1988, the amount by which the Petitioner underpaid his health insurance coverage premiums totals S1,116.36. 1/

      
      

   5. During the period beginning March 1, 1986, and continuing through October of 1988, the amount by which the Petitioner underpaid his health insurance coverage premiums totals $861.74.

      
      

   6. During the thirteen-month period beginning with September 1986 and ending with (but including) September 1987, the amount by which the Petitioner underpaid his health insurance coverage premiums totals $258.36.

      
      

      CONCLUSIONS OF LAW

      
      

   7. Based on the foregoing findings of fact and on the applicable statutes, rules, and court decisions, make the following conclusions of law.

      
      

   8. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sec. 120.57, Fla. Stat.

      
      

   9. Rule 3A-21.004, Florida Administrative Code, provides a procedure for imposing involuntary salary deductions to obtain payment of certain debts owed to the State of Florida by employees of state agencies.

      
      

   10. The Department of Administration is authorized by Section 110.123(5), Florida Statutes, to administer the state group health insurance program. In the exercise of that statutory authority, the Department of Administration has

       adopted Rule 22K-1.049, Florida Administrative Code, which addresses the subject of underpayment of premiums. That rule provides, in pertinent part:

       
       

       1. For employees on the payroll:

          (a) When it has been determined that an employee's premium has been underpaid, the Department of Administration shall notify the employee of the underpayment by certified letter. . . . This notice shall advise the employee of the following provisions. . . .

          1. If the full amount of the underpay- ment is not received by the Department of Administration or if approval is not granted in accordance with Subsection (1)(a)2., or if an administrative hearing is not requested in accordance with Subsection (1)(a)3., the employee's coverage shall be cancelled.

          2. If the underpayment involves more than one coverage period, the Department of Administration, upon written request from the employee, may approve an installment payment program. The period of payment shall not extend beyond two (2) years from the date of approval.

          3. The employee may request an admini- strative hearing pursuant to Section 120.5, Florida Statutes, provided such request is received by the Department of Administration within thirty-one (31) calendar days from the date of receipt of the notification of underpayment.

          . . .

          (4) Underpayments which are detected two

       2. years or later after the coverage period of occurrence shall be deemed uncollectible.

          
          

   11. The earliest date on which the Petitioner's underpayments appear to have been detected is March 18, 1988, the date of the notice of underpayment. 2/ Therefore, application of the last sentence of the above-quoted portion of Rule 22K-1.049 has the effect of rendering uncollectible any underpayments for coverage periods prior to March 1, 1986. Accordingly, the maximum amount of underpayments the Department of Administration can seed to recover are those that occurred for the coverage periods from March 1, 1986, to the date of the hearing, an amount which totals $861.74.

       
       

   12. However, fundamental notions of due process limit the amount the Department of Administration can recover in this case to an even smaller amount. The notice of underpayment sent to the Petitioner in this case put him on notice of claims of underpayment only for the period of September 1986 through September 1987. With the scope of the claim thus limited by the Department of Administration in its notification letter, it would be a departure from due process to in this case determine and impose liability for underpayments either before or after the period identified in the notification letter. Accordingly, the only liability which should be determined in this case is the Petitioner's

liability for underpayment of premiums during the period of September 1986 through September 1987. 3/ The Petitioner's underpayments during that period total $258.36.

RECOMMENDATION

Based on all of the foregoing, I recommend the entry of a Final Order to the following effect:

1. Finding the Petitioner to be in debt to the State of Florida in the amount of $258.36 by reason of underpayment of premiums during the period of September 1986 through September 1987.

   
   

2. Providing that the Petitioner's health insurance coverage under the State Group Health Self-Insurance Plan will be cancelled unless within thirty

(30) days following the entry of the final order the Petitioner either pays the full amount of $258.36 or enters into an installment payment program consistent with Rule 22K-1.049(1)(a)2., Florida Administrative Code.

DONE AND ENTERED this 23rd day of November, 1988, at Tallahassee, Florida.

MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of November, 1988.

ENDNOTES

1/ The findings in this paragraph and in paragraphs 5 and 6 are derived from the information contained in Department Exhibit No. 3. In interpreting the exhibit I have indulged in the inference that the amounts recorded in the "Paid" column of the exhibit were paid in equal monthly amounts during the months to which those amounts relate.

2/ The witness who testified at the hearing said that she first learned of the Petitioner's underpayments on July 28, 1988, but someone in the Department of Administration obviously had learned of the underpayments by March 18, 1988, the date of the notification letter.

3/ This conclusion does not, of course, preclude the Department of Administration from, by subsequent notice to the Petitioner, putting him on notice of the Department's intention to seek to recoup underpayments during periods other than the period covered by the notice in this case.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3466

The following are my specific rulings on all proposed findings of fact submitted by all of the parties.

Findings proposed by Petitioner: (None proposed.)

Findings proposed by Respondent:

Paragraphs 1, 2, 3, and 4: Accepted.

Paragraph 5: Accepted, with the exception of the specific amount. (See conclusions of law for reasons for concluding that a lesser amount is owed.)

Paragraph 6: Rejected as not supported by competent substantial evidence and as, in any event, more in the nature of a conclusion of law than a proposed finding of fact.

Paragraph 7: Rejected as constituting a conclusion of law rather than a proposed finding of fact.

COPIES FURNISHED:

N. Patrick Hale, M.D.

175 Inlet Drive

St. Augustine, Florida 32084

William A. Frieder, Esquire Senior Attorney

Department of Administration

440 Carlton Building Tallahassee, Florida 32399-1550

Adis Vila, Secretary Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Docket for Case No: 88-003466

Orders for Case No: 88-003466