STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KARL G. KROECK, )

)

Petitioner, )

)

vs. ) CASE NO. 89-4929

) DEPARTMENT OF ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on November 3, 1989, in Miami, Florida.

APPEARANCES

For Petitioner: Karl G. Kroeck, pro se

7251 Southwest 165th Street Miami, Florida 33157

For Respondent: William A. Frieder, Esquire

Office of the General Counsel Department of Administration

438 Carlton Building Tallahassee, Florida 32399-1550

STATEMENT OF THE ISSUES

Whether the State of Florida Employees Group Health Self Insurance Plan is responsible for paying medical expenses incurred by Petitioner's newborn child where Petitioner had only individual coverage in effect at the time of the child's birth.

PRELIMINARY STATEMENT

Petitioner is an associate professor at Florida International University and has been insured by the State of Florida Employees Group Health Self Insurance Plan since 1982. Prior to his marriage in March 1988, he had individual health insurance coverage. He did not convert his individual insurance coverage to family coverage until after the birth of his son. In August 1988, Petitioner and his wife learned that she was pregnant with an expected due date in February of 1989. Subsequent to the birth of his son on February 19, 1989, Petitioner submitted medical expenses in the amount of

$4,274.95 related to the birth to Respondent for payment. Respondent refused to pay Petitioner's claim on the basis that these expenses were not covered by Petitioner's individual coverage. These expenses would have been covered, subject to the exclusions and limitations of the terms of coverage, if Petitioner had converted his individual coverage to family coverage prior to the

birth of his son. Because Petitioner had not converted his individual coverage to family coverage prior to the birth of his son, the claim was denied.

Petitioner thereafter contested the denial of coverage and requested a formal hearing.

Petitioner contends that the baby's medical expenses should be covered because he and his wife were given erroneous information when they inquired of Florida International University's personnel office as to the requirements for converting his individual coverage to family coverage. Petitioner contends that he did everything he thought was required of him to secure coverage for the baby, and that he would have converted his individual coverage to family coverage had he been properly informed by the personnel office.

At the formal hearing Petitioner testified on his own behalf and he called as additional witnesses Annette Kroeck, Maria Alam, and Clara Martinez. Annette Kroeck is Petitioner's wife. Maria Alam is the benefits manager for the Florida International University personnel office while Clara Martinez is a personnel technician in that office. Petitioner introduced six documentary exhibits which were accepted into evidence. Respondent called as witnesses Petitioner, Clara Martinez, Maria Alam, and William Seaton. William Seaton is the Benefit's Administrator for the Division of State Employees Insurance within the Department of Administration. Respondent introduced two documentary exhibits which were accepted into evidence. At the parties' request official recognition was taken of the provisions of Sections 110.23(3)(a) and 110.125(5), Florida Statutes, and of Chapter 22K, Florida Administrative Code.

A transcript of the proceedings has been filed. Rulings on the Respondent's proposed findings are in the appendix to this recommended order. Petitioner's proposed findings were not submitted within the time set for the filing of post-hearing submittals. Consequently, specific rulings have not been made on the proposed findings of fact submitted by Petitioner.

FINDINGS OF FACT

1. The State of Florida makes available to its employees several group insurance programs. In the area of health insurance, employees may choose to participate in the State of Florida Employees Group Health Self Insurance Plan (State Group Plan), or they may enroll in other plans, such as HMOs.

   
   

2. The State Group Plan is a plan of self insurance established by the State and administered by Blue Cross/Blue Shield. This plan is described in general terms by a Plan Brochure and is described in more detail by the contract of insurance contained in the State Self Insured Health Plan's Benefit Document (Plan Document). The State Group Plan is regulated by those rules contained in Chapter 22K, Florida Administrative Code.

   
   

3. At the time employees begin their employment with the State, they may select which, if any, of the optional health insurance programs offered by the State they desire. Thereafter, employees may only join one of the insurance programs or switch between programs during an annual open enrollment period.

   
   

4. An employee who elects coverage from the State Group Plan may purchase either individual coverage or family coverage. Individual coverage provides health insurance coverage for only the individual employee. Family coverage provides health insurance coverage for the individual employee and the employee's eligible dependents for whom the employee has elected coverage. Family coverage does not begin until after the application for coverage is

   processed and the premium for family coverage is paid. The monthly premium for family coverage is paid one month in advance.

   
   

5. An employee can, but he does not have to, wait for an open enrollment period to switch from individual coverage to family coverage. An employee having individual coverage may change to family coverage at any time during the year prior to the acquisition of an eligible dependent or at a time that is within 31 days of the date of acquisition of any eligible dependent. If family coverage is requested after the acquisition of the dependent, there is a gap in the coverage of the dependent between the date of acquisition and the date coverage begins. There is no retroactive coverage.

   
   

6. An employee who completes the pertinent application for family coverage, who submits the application, and who pays the first month's premium for family coverage prior to the acquisition of the dependent has family coverage in place at the time the dependent is acquired through birth, adoption, or other means. Consequently, there is no gap in coverage between the date of acquisition and the effective date of coverage for that dependent.

   
   

7. Petitioner is an associate professor of management and Director of the Doctoral Studies Program in the College of Business Administration at Florida International University (FIU). Petitioner teaches courses in a variety of areas including business administration, wage and salary administration, and insurance benefits.

   
   

8. Petitioner enrolled in the State Group Plan in 1982. Petitioner was knowledgeable about the State Group Plan and had, from time to time, compared its benefits to those of other plans. At the time of their marriage, Petitioner and his wife reviewed their insurance coverage and decided not to convert their individual policies to one policy with family coverage. From the date of his initial enrollment until April 1989, Petitioner had individual coverage. On March 8, 1989, Petitioner executed the forms that were necessary to change his individual coverage to family coverage. Petitioner's family coverage went into effect on April 1, 1989, after the application was processed and the premium was collected.

   
   

9. In March 1988 Petitioner married Annette Wellinghoff. Petitioner and his wife retained their respective individual insurance policies after their marriage. Mrs. Kroeck was not a state employee so the insurance coverage she had was independent of her husband's coverage. In August 1988 Petitioner and his wife learned that Mrs. Kroeck was pregnant with an expectant due date in February 1989.

   
   

10. In August 1988, Petitioner telephoned the personnel office at FIU to inquire as to obtaining coverage for the expected child. The general information given Petitioner in response to his questions was accurate. He was told that he could convert his individual coverage to family coverage, if he so desired, during the open enrollment period scheduled for December 1, 1988, through January 31, 1989. There was no evidence that Petitioner specifically inquired as to when he should begin family coverage in order to have the child's birth expenses covered. Likewise, there was no evidence that Petitioner was specifically told that he could convert his coverage to family coverage after the birth of his child and have the medical expenses covered from the time of birth. Petitioner did not request any written information about the conversion process, nor did he request an application form to effectuate the conversion. Petitioner did not know the name of the person with whom he was speaking, only that she was a representative of the personnel office.

11. Petitioner did not contact the FIU Personnel Office again until after the birth of his son. Instead, Petitioner relied upon his wife to take care of securing health insurance. Petitioner delegated this responsibility to his wife because she was also experienced and knowledgeable in matters concerning employee benefits and health insurance plans. Mrs. Kroeck has had at least 3 years experience in health insurance benefits administration.

    
    

12. In December 1988 general information relating to the open enrollment program was mailed to all state employees, including Petitioner. Included in the information package were a Plan Brochure for the State Group Plan and an enrollment form for the various insurance options offered to State employees.

    
    

13. Mrs. Kroeck read the application form and a portion of the Plan Brochure. Neither Petitioner nor his wife read, prior to the birth of their child, the section of the Plan Brochure entitled "Purpose of This Brochure". That section states that the Plan Brochure is not intended to be a contract document, that it is intended to give a summary of available benefits, and that an employee should contact either his personnel office or the office of the Division of State Employees' Insurance for the answer to questions. The employee is told that the contract document is the Plan Document and that a copy of the Plan Document is on file at the employee's personnel office. That section also contains the following admonition:

    
    

    The agency personnel office will provide needed assistance to State officers and employees enrolling in the Plan; however, such officers or employees should take care to assure that they receive the coverage applied for and that proper deductions are made.

    
    

14. On January 9, 1989, Mrs. Kroeck telephoned the personnel office at FIU with questions relating to listing the unborn child as a dependent on the application form that had been mailed to Petitioner in December. Her questioning centered on how to complete the name, date of birth and social security number for an unborn dependent. Clara Martinez, the employee in the personnel office to whom Mrs. Kroeck spoke, does not recall talking to Mrs. Kroeck on January 8, 1989. At the time of this conversation, Ms. Martinez knew that family coverage had to be in place prior to the acquisition of a dependent for the dependent to be covered as of the date of acquisition. If Ms. Kroeck had asked Ms. Martinez a question to which Ms. Martinez did not know the answer, Ms. Martinez would have contacted the office of the Division of State Employees Insurance in Tallahassee for the answer.

    
    

15. The evidence fails to establish that Mrs. Kroeck was misinformed by Ms. Martinez or that she specifically inquired as to the effective date of the family coverage.

    
    

16. On February 19, 1989, Mrs. Kroeck had her baby. The baby was admitted to the hospital in his own name and incurred, in his own name, expenses in the amount of $4,274.95, for which Petitioner and his wife were responsible.

    
    

17. On March 8, 1989, Petitioner signed an application to change his individual coverage to family coverage. Family coverage became effective on April 1, 1989, after the application was processed and the premium for family coverage was collected.

18. At the time of the birth of his son, Petitioner had individual coverage issued through the State Group Plan. Petitioner's son was not a beneficiary under the State Group Plan at the time the medical expenses which are at issue were incurred.

    
    

19. Petitioner's request for payment of the medical expenses incurred by his son at birth was denied by Respondent and this proceeding followed.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

21. Rule 22K-1.203, Florida Administrative Code, provides, in pertinent part, as follows:

    
    

    1. An employee ... having individual coverage may apply for a change to

       family coverage within thirty-one (31) calendar days after the date of acquisition of any eligible dependent or during the open enrollment period. ...

    2. An employee ... may begin family coverage prior to acquiring any eligible dependents. Since such coverage is effective the first day of any given month, employees who will acquire eligible dependents during the month and are desirous of having immediate coverage of such dependents must make application in time for a complete month's premium to be deducted prior to the first day of the month during which the dependent will be acquired. Otherwise, coverage cannot be effective on the actual date the dependent is acquired.

       
       

22. Petitioner failed to establish a factual or legal basis for his contention that Respondent should be estopped from denying coverage based on the information given to Petitioner or his wife by the personnel office at Florida International University. Although there may have been miscommunications between the Kroecks and the personnel office, Petitioner failed to establish that he or his wife were given erroneous information in response to their questions. Petitioner failed to establish that he or his wife specifically inquired as to when coverage for the unborn child would begin.

    
    

23. Petitioner had only individual coverage at the time of his son's birth. Consequently, the medical expenses incurred by the child at birth are not covered.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Department of Administration enter a final order which denies the claim for payment of the medical expenses incurred by Petitioner's son prior to the effective date of family coverage.

DONE AND ENTERED this , 27th day of December, 1989, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 27th day of December, 1989.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4929

The following rulings are made on the proposed findings of fact submitted on behalf of Respondent.

part by paragraph 11 of the Recommended Order.

1. The proposed findings of fact in paragraph 8 are adopted in material part by paragraph 13 of the Recommended Order.

2. The proposed findings of fact in paragraph 9 are rejected as being subordinate to the findings made.

3. The proposed findings of fact in paragraph 10 are adopted in material part by paragraph 12 of the Recommended Order.

4. The proposed findings of fact in paragraph 11 are rejected as being unnecessary to the conclusions reached.

5. The proposed findings of fact in paragraph 12 are adopted in material part by paragraph 12 of the Recommended Order.

6. The proposed findings of fact in paragraph 13 are rejected as being unnecessary to the conclusions reached.

7. The proposed findings of fact in paragraph 14 are adopted in material part by paragraph 10 of the Recommended Order.

8. The proposed findings of fact in paragraph 15 are rejected as being unnecessary to the conclusions reached.

9. The proposed findings of fact in paragraph 16 are rejected as being unnecessary to the conclusions reached.

10. The proposed findings of fact in paragraph 17 are rejected as being unnecessary to the conclusions reached.

11. The proposed findings of fact in paragraph 18 are rejected as being unsubstantiated by the evidence as to Ms. Alam and as being unnecessary to the conclusions reached as to Ms. Martinez.

12. The proposed findings of fact in paragraph 19 are rejected as being subordinate to the findings made.

13. The proposed findings of fact in paragraph 20 are rejected as being unnecessary to the conclusions reached.

14. The proposed findings of fact in paragraph 21 are adopted in material part by paragraph 13 of the Recommended Order.

15. The proposed findings of fact in paragraph 22 are rejected as being unnecessary to the conclusions reached.

16. The proposed findings of fact in paragraph 23 are adopted in material part by paragraph 8 of the Recommended Order.

17. The proposed findings of fact in paragraph 24 are adopted in material part by paragraph 18 of the Recommended Order.

18. The proposed findings of fact in paragraph 25 are adopted in material part by paragraph 16 of the Recommended

    Order.

19. The proposed findings of fact in paragraph 26 are adopted in material part by paragraph 5 of the Recommended Order.

20. The proposed findings of fact in paragraph 27 are adopted in material part by paragraph 4 of the Recommended Order.

COPIES FURNISHED:

Augustus Aikens, Jr., Esquire Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Kark G. Kroeck

9853 Costa del Sol Boulevard Miami, Florida 33178

Alette A. Lhutes, Secretary Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

William A. Grieder, Esquire Office of the General Counsel Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Docket for Case No: 89-004929

Orders for Case No: 89-004929