STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

) TERRI K. CASSANO and EDWARD M. ) McDONALD, )

)

Petitioners, )

)

vs. ) CASE NO. 89-6263

) DEPARTMENT OF ADMINISTRATION, ) DIVISION OF STATE EMPLOYEES' ) INSURANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above case was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on January 17, 1990, in Bartow, Florida.

APPEARANCES

For Petitioners: Bradford H. Copley, Esquire Drawer SA

Post Office Box 9000 Bartow, Florida 33830-9000

For Respondent: Augustus D. Aikens, Jr., Esquire

435 Carlton Building Tallahassee, Florida 32399-1550

STATEMENT OF THE ISSUES

The issue is whether petitioners' request to terminate, without penalty, their participation in the state group health insurance plan should be granted.

PRELIMINARY STATEMENT

This matter began on October 5, 1989 when respondent, Department of Administration, Division of State Employees' Insurance, denied a request by petitioners, Terri K. Cassano and Edward M. McDonald, to discontinue their health insurance coverage under the State Group Health Insurance Program effective October 1, 1989.

Petitioners thereafter requested a formal hearing to contest the agency's preliminary decision. The matter was

referred by respondent to the Division of Administrative Hearings

on November 16, 1989 with a request that a hearing officer be assigned to conduct a formal hearing.

By notice of hearing issued on December 12, 1989, the matter was scheduled for final hearing on January 17, 1990 in Bartow, Florida.

At final hearing, petitioners testified on their own

behalf and presented the testimony of Martha H. Keith, personnel director for the state attorney's office. Also, they offered petitioners' composite exhibit 1 which was received in evidence. Respondent presented the testimony of William R. Seaton, state benefits administrator, and offered respondent's composite exhibit 1. The exhibit was received in evidence.

This Recommended Order was prepared without the benefit of a transcript of hearing. Petitioners waived their right to

submit proposed findings of fact and conclusions of law. Respondent filed the same on February 6, 1990. A ruling on each

proposed finding of fact has been made in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. Petitioners, Terri K. Cassano (Cassano) and Edward

   M. McDonald (McDonald), are employees of the Office of State Attorney, Tenth Judicial Circuit, in Bartow, Florida. As such, they are eligible to participate in the State Group Health Insurance Program (program) administered by respondent, Department of Administration, Division of State Employees' Insurance (Division). At issue in this case is approximately

   $1,500 paid by petitioners and their employer for health insurance coverage under the program during the period October through December 1989.

   
   

2. Effective July 1, 1989 the State of Florida implemented the first phase of a two-phase Flexible Benefits Plan (plan) which allowed, among other things, for employees who participate in the program to make their required monthly insurance premium contribution through a salary reduction agreement which has the effect of reducing the employee's taxable income by the amount of such contribution. Although not made clear in the record, it may be inferred that the plan is embodied in Chapters 22FB-1, 2 and 3, Florida Administrative Code (1987), which rules became effective on August 3, 1989. In federal bureaucratic parlance, the plan is known as a ``cafeteria''

   plan /1 and was implemented after approval was obtained from the Internal Revenue Service (IRS). All state employees were automatically enrolled in the plan unless they signed a waiver form. Cassano and McDonald chose to participate in the plan, and they acknowledge that they received a Division brochure describing the plan prior to their enrollment. Under the rules of the plan, a participant was required to remain in the plan for the entire plan year, which in this case ended on November 30, 1989, unless a so-called "qualifying status change" occurred. Rule 22BF-1.008(13) cites a number of events as

   constituting a "qualifying status change". However, the event defined in subparagraph (13)(b) as a "change in a participant's health insurance coverage resulting in cessation of coverage" is the event upon which petitioners rely. The manner in which that rule should be interpreted is the source of controversy in this proceeding.

   
   

3. In July 1989 petitioners were utilizing as their health insurer Health Alliance Plan (HAP), a health maintenance

   organization (HMO) serving Polk County. HAP was designated as a qualifying HMO under the program. In late July petitioners learned that HAP would cease doing business in Polk County effective September 30, 1989. Because of this, it was necessary that they consider other insurance alternatives to replace their existing coverage. After considering enrollment in Blue Cross

   Blue Shield (BCBS), which was the only other health alternative offered by

   the Division,/2 Cassano decided to enroll as a dependent in her husband's health insurance program because of

   the lower monthly premiums and she would not have to meet a new deductible as she would with BCBS. As for McDonald, who is also a military retiree, he considered BCBS but opted instead for Medicare because he was being treated for an existing ailment and his physicians were not listed as primary providers with BCBS. Consequently, it would cost him approximately $200 per visit with those doctors if he elected to use BCBS. Under these circumstances, petitioners' health coverage under the program ended since their HMO was no longer in business and their only other option, BCBS, would result in petitioners paying significantly higher costs. Cassano was able to immediately obtain coverage with her husband's health plan effective on July 28, 1989 while McDonald's coverage with Medicare became effective on October 1, 1989, the day after his HAP coverage ended.

   
   

4. When the Division learned that HAP was ceasing doing business in Polk County, it mailed to petitioners a "health care provider selection form" which offered them a special enrollment period from August 15 through 31, 1989. The form offered the choice of enrolling in HOPC, BCBS or to cancel their health insurance coverage. However, respondent contends that even though the form offered petitioners the option of cancelling their insurance, it did not apply and that petitioners' only choice was to transfer coverage to one of the two remaining state insurers. The form also noted that if petitioners had any questions they should contact their personnel office or the

   Division by telephone. Although their personnel office later informed them that respondent might not agree they could do so,

   Cassano and McDonald executed the form on August 23 and 28, 1989, respectively, and elected to cancel their coverage. They also executed a "qualifying status change form" so that they could cease participation in the plan even though the plan year did not end until November 30, 1989. In so doing, they noted on the form that the qualifying status change event was "cessation of coverage by Health Alliance Plan" and relied in part upon a Division document sent to them which outlined the plan and listed a qualifying status change event as being a "change in participant's health coverage: resulting in cessation of coverage". That same document noted that in order to prove that such an event had occurred, the employee had to furnish a "letter

   from carrier stating that coverage has ceased due to change in insurance plan". In addition, explanatory literature concerning the plan previously disseminated: by the Division reflected that "a cafeteria plan may also allow for revocation of health plan elections of all affected participants in the event coverage is significantly curtailed or completely terminated in connection with a health plan, if the coverage is provided by an independent third party." Thus, petitioners reasonably assumed that a qualifying status change had occurred by virtue of the cessation of coverage by HAP.

   
   

5. After informal efforts to resolve the matter were unsuccessful, on September 28, 1989 Cassano and McDonald formally requested by letter the right to discontinue their participation,

   without penalty, in the state program. Their requests were essentially denied by letters dated October 5, 1989 from the

   Division director. In the proposed agency action, the Division stated that it would be happy to comply with their requests but "since the premiums you pay for such coverage have been pretaxed for the five month period ending December 1, 1989, we will

   continue to deduct these premiums through October 1989 payroll pursuant to rule 22FB-2.005 F.A.C." /3 As a consequence,

   petitioners were involuntarily required to pay for coverage in BCBS during the months of October through December 1989 even though they were enrolled in other health insurance plans, and their employer (the office of state attorney) was forced to make its required contribution.

   
   

6. Through testimony of the state benefits administrator, William R. Seaton, it was established that the

   Division interprets the term "cessation of (insurance) coverage" as the cessation of all health insurance coverage by the state, including BCBS, an event unlikely to ever occur. Indeed, the administrator acknowledged that such an event would not occur unless the state no longer functioned as a viable entity. Because the state offered petitioners the option of enrolling in BCBS, Seaton contended there was no cessation of insurance coverage, even if petitioners' former HMO in Polk County went out of business. Seaton also opined that petitioners' request was

   prohibited by IRS regulations and, if approved, would subject the Division to a possible fine if audited by IRS. However, he could

   not identify a regulation that prohibited approval of their request. Further, there is no evidence that the Division has received specific advice from the IRS on the subject or made inquiry as to whether or not petitioners' request is permissible under federal regulations.

   
   

7. Petitioners construe the termination of coverage by their HMO to be a qualifying status change since they no longer could be covered by that HMO. Relying on the plain language in the rule and Division explanatory literature, they did not telephone the Division to ascertain whether they could discontinue state coverage since they had no reason to do so.

   
   

8. Through a proffer of agency counsel at hearing, it

   was pointed out that the federal regulation that allegedly prohibits petitioners from obtaining relief is found on page

   14,847-6 of the Standard Federal Tax Reports published by Commerce Clearing House and received in evidence as a part of respondent's composite exhibit 1. 4/ It reads as follows:

   
   

   (2) Coverage changes. If the coverage under a health plan provided by an independent, third-party provider is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their election of the health plan and, in lieu thereof, to receive on a prospective basis coverage under another health plan with similar coverage.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes (1989).

   
   

10. As the petitioners in this cause, Cassano and McDonald bear the burden of proving by the preponderance of the evidence that they are entitled to the relief requested. Thus, they must show that they are entitled to revoke their participation in the flexible benefits plan prior to the end of the plan year.

    
    

11. The basis for the denial of the requests herein is as follows:

    
    

    (S)ince the premiums you pay for such coverage have been pretaxed for the five month period ending December 1, 1989, we will continue to deduct these premiums through October 1989 payroll pursuant to Rule 22FB-

    2.005 F. A. C.

    
    

    Although the relevant portion of rule 22FB-2.005 is not cited in the proposed agency action, sections (1) and (3) read as follows:

    
    

    An election made under the pretax premium component of the plan shall be irrevocable during the plan year except when a participant experiences a family status change, where there has been a change in the participant's health plan coverage or where the participant's employment is terminated, as described in Section 22FB-1.006.

    * * *

    (3) A participant may revoke his election of a health insurance plan and elect coverage under another plan with similar coverage if, during the plan year, the coverage under the original health insurance plan ceases.

    * * *

    As further explained at hearing, the Division also contends that federal regulations bar the requested relief. The pertinent regulation upon which it relies provides as follows:

    
    

    (2) Coverage changes. If the coverage under a health plan provided by an independent, third party provider is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their elections of the health plan and, in lieu thereof, to receive on a prospective basis coverage under another health plan with similar coverage.

    
    

    Finally, the appropriate construction of Rule 22FB-1.008(13), Florida Administrative Code (1987) is in issue. That rule provides as follows:

    
    

    (13) "Qualifying Status Change" means:

    * * * * Changes in a participant's health

    insurance coverage resulting in cessation of coverage.

    * * * *

    
    

12. To resolve this matter, it is necessary first to determine whether Internal Revenue Service regulations which govern cafeteria plans prohibit petitioners from obtaining relief. Respondent relies upon a regulation which provides that "(i)f the coverage under a health plan . . . is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their elections of the health plan." The Division has essentially incorporated that provision into its rules 22FB-1.006(13) and 22FB-2.005(1). Since the regulation allows an employee to revoke his participation in

the plan whenever a health plan is significantly curtailed or terminated, it is concluded that the regulation does not serve as

an impediment to petitioners' request. This conclusion is supported by the fact that respondent offered no credible evidence that IRS would penalize the Division in the event of an audit or that an IRS ruling on the issue had been obtained.

Next, it is necessary to determine whether the plan, as embodied in the rules, authorizes the requested relief. As a corollary to this issue, it is necessary to ascertain the proper construction of the term "cessation of coverage". In resolving this latter issue, several well-established principles come into play. First, an agency's interpretation of its own rule is entitled to great weight, Franklin Ambulance Service v. Department of Health and Rehabilitative Services, 450 So.2d 580 (Fla. 1st DCA 1984), but where the construction contradicts the unambiguous language in the rule, the construction is erroneous. Woodley v. Department of Health and Rehabilitative Services, 505 So.2d 676 (Fla. 1st DCA 1986). In addition, a cardinal rule in interpreting agency regulations is that words should be given their plain and ordinary meaning. Boca Raton Artificial Kidney Center, Inc. v. Department of Health and Rehabilitative Services,

493 So.2d 1055 (Fla. 1st DCA 1986). In this case, the rule in question defines a qualifying status change as "(c)hanges in a participant's health insurance coverage resulting in cessation of coverage." The agency interprets the words "cessation of coverage" to mean whenever the state no longer provides any health insurance for its employees, an event that would not occur

unless the state government ceased being a viable entity. Such an interpretation has the effect of rendering this provision meaningless since, without a viable governmental entity, the plan itself would no longer be operative. Cf. Drost v. State, Department of Environmental Regulation, 14 FLW 2577, 2578 (Fla.

3d DCA, November 7, 1989) (use by agency of "unreasonable or ridiculous interpretations distort fundamental principles of statutory construction and mandate the use of reasonable interpretations"). The plain and ordinary meaning of the words "cessation of coverage", as urged by petitioners, is a termination of coverage by a health provider. Since HAP terminated insurance coverage in Polk County as of September 30, 1989, there was cessation of coyerage within the meaning of the rule. Therefore, it is concluded that a qualifying status change has occurred and petitioners' request to discontinue the program, without penalty, should be granted. While it is true that rule 22FB-2.005(3) appears to offer some solace to respondent's position, that rule simply permits an employee to continue participation in the plan after cessation of insurance coverage, if he so chooses, by electing coverage with another state health insurer. Petitioners should accordingly be refunded their insurance contributions to BCBS for the months of October through December 1989. In addition, the required contribution of their employer should also be refunded.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is

RECOMMENDED that the requests of Terri K. Cassano and

Edward M. McDonald to discontinue participation in the state health program be granted and that appropriate refunds be given to petitioners and their employer.

DONE and ORDERED this 9 day of February, 1990 in Tallahassee, Leon County, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Desoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9 day of February, 1990.

ENDNOTES

1/ Although the origin of the name "cafeteria plan" was not given, the documents received in evidence suggest that the name has been used because an employee can choose from a number of options under the plan, much like a customer in a cafeteria.

Copies furnished to:

2/ The selection form also noted that Health Options of Polk County (HOPC), an HMO, was providing health insurance for state employees. However, for whatever reason, the parties have not treated HOPC as a viable health insurance alternative.

3/ Although the plan year ended on November 30, 1989, the letter used the date of December 1, 1989. In addition, petitioners have actually remained in the plan through the month of December 1989, and seek a refund of premiums for the months of October, November and December 1989.

4/ The actual federal regulation with its appropriate citation in the Code of Federal Regulations was not made a part of the

record. Instead, a copy of the regulation as reprinted in a tax reporter service was proffered into evidence.

APPENDIX

Respondent:

1-2. Partially adopted in finding of fact 1. 3-4. Partially adopted in finding of fact 2. 5-8. Partially adopted in finding of fact 3. 9-11. Partially adopted in finding of fact 4.

12. Partially adopted in finding of fact 6. 13-17. Partially adopted in finding of fact 2.

1. Rejected as unnecessary.

2. Partially adopted in finding of fact 5.

Note - Where a proposed finding has been partially used, the remainder has been rejected as being unnecessary, cumulative, subordinate, irrelevant or not supported by the more credible and persuasive evidence.

COPIES FURNISHED:

Bradford H. Copley, Esquire Drawer SA

1. O. Box 9000 Bartow, FL 33830-9000

   
   

   Augustus A. Aikens, Jr., Esquire

   435 Carlton Building Tallahassee, FL 32399-1550

   Aletta Shutes, Secretary Department of Administration

   435 Carlton Building Tallahassee, FL 32399-1550

   
   

   =================================================================

   AGENCY FINAL ORDER

   =================================================================

   
   

   STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION

   
   

   
   

   TERRI K. CASSANO AND EDWARD M. MCDONALD,

   
   

   CASE NO. 89-6263

   Petitioners, DOA Case No.: A-89-19

   
   

   vs.

   
   

   DEPARTMENT OF ADMINISTRATION, DIVISION OF STATE EMPLOYEES' INSURANCE,

   
   

   Respondent.

   /

   
   

   FINAL ORDER

   
   

   This cause is before me for the entry of a Final Order. A formal hearing pursuant to Section 120.57(1), Florida Statutes, was held on January 17, 1990 by a hearing officer from the Division of Administrative Hearings. As a result of that hearing a Recommended Order was rendered on February 9, 1990. (Copy attached). That Order recommended that the requests of Terri K. Cassano and Edward M. McDonald to discontinue participation in the state health program be granted and that appropriate refunds be given to Petitioners and their employer.

   
   

   I have reviewed the record in this case including the transcript of proceedings. Upon consideration, the Findings of Fact made by the Hearing Officer are hereby adopted as the Findings of Fact of this agency, except as indicated below:

   
   

   1. The hearing officer found in paragraph 3 of the Findings of Fact that Petitioners "considered enrollment in Blue Cross Blue Shield, which was the only other health alternative offered by the Division." That finding is contrary to the evidence and other findings made by the hearing officer. For example, the hearing officer correctly found in paragraph 1 -of his Findings of Fact that petitioners were eligible to participate in the State Group Health Insurance Program administered by Respondent. Respondent does not offer a Blue Cross Blue Shield plan.

      
      

   2. The hearing officer concluded in paragraph 3 of his Findings of Fact that it would cost McDonald "approximately $200 per visit with the doctors if he

      elected to use BCBS." The evidence does not support a finding that Respondent offered or authorized BCBS to offer a Plan at a cost of $200.00 per visit.

      
      

   3. In paragraph 4 of the Findings of Fact the hearing officer concluded: "The form offered the choice of enrolling in HOPC, BCBS or to cancel their health insurance coverage." That finding is clearly contrary to the evidence. Martha Keith and Petitioners testified they modified Respondent's form by adding the option of electing to cancel their health insurance coverage.(Tr. 19,45,56,58) The special enrollment form prepared by Respondent offered only two options: (1)transfer to Health Option of Polk County (HMO) or (2) transfer to the State Health Self-Insurance Plan. No BCBS option was offered.(Tr. 19,45,56,58)

      
      

   4. Contrary to the hearing officer's finding in paragraph 6., Respondent did not offer Petitioners the option of enrolling in BCBS.(Tr. 56,57)

      
      

   5. In his footnote to Findings of Fact 3 the hearing officer concluded:

   
   

   2. The selection form also noted that Health Options of Polk County (HOPC), an HMO, was providing health insurance for state employees. However, for whatever reason, the parties have not treated HOPC as a viable health insurance alternative. (emphasis supplied)

   
   

   The hearing officer's footnote supporting his finding is clearly erroneous and contrary to his findings of fact numbered 4 wherein the hearing officer acknowledged: "the (special enrollment) form offered the choice of enrolling in HOPC, BCBS or to cancel their health insurance coverage." The Special Enrollment form included information on the State Plan and HOPC and specifically provided: "Enclosed are brochures which compare the benefits of the State's Self-Insured Plan and Health Options HMO". Clearly, the evidence reveals Respondent always treated HOPC as a viable health insurance alternative for petitioners and other Polk County participants. (Tr. 19,45,56,57,58)

   
   

   CONCLUSIONS OF LAW

   
   

   1. As the petitioners in this cause, Cassano and McDonald bear the burden of providing by the preponderance of the evidence that they are entitled to the relief requested. Thus, they must show that they are entitled to revoke their participation in the flexible benefits plan prior to the end of the plan year. They have not carried that burden. Tropical Park, Inc. v. Ratlif, 97 So. 2d 160 (Fla. 1957). Please also see Fla. Department of Health and Rehabilitative Services v. Career Service Commission, 289 So. 2d 412 (Fla. 4th DCA 1974).

   2. The basis for the denial of the requests herein was as follows: (S)ince the premiums you pay for such coverage have been

      pretaxed for the five month period ending December 1, 1989, we will continue to deduct these premiums through October 1989 payroll pursuant to Rule 22FB-2.005 F.A.C.

      
      

      Although the relevant portion of rule 22FB-2.005 is not cited in the proposed agency action, sections (1) and (3) read as follows:

      
      

      1. An election made under the pretax premium component of the plan shall be irrevocable during the plan year except when a participant experiences a family status change, where there has been a change in the

   participant's health plan coverage or where the participant's employment is terminated, as described in Section 22FB-1.006.

   * * *

   (3) A participant may revoke his election of a health insurance plan and elect coverage under another plan with similar coverage if, during the plan year, the coverage under the original health insurance plan ceases. (emphasis supplied)

   * * *

   The Division also contends that federal regulations bar the requested relief. The pertinent regulation upon which it relies provides as follows:

   
   

   (2) Coverage changes. If the coverage under a health plan provided by an independent, third party provider is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their elections of the health plan and, in lieu thereof, to receive on a prospective basis coverage under another health plan with similar coverage. (emphasis supplied)

   
   

   Finally, the appropriate construction of Rule 22FB-1.008(13), Florida Administrative Code, is in issue. That rule provides as follows:

   
   

   (13) "Qualifying Status Change " means:

   * *. * *

   (b) Changes in a participant's health insurance coverage resulting in cessation of coverage.

   * * * *

   
   

   4. To resolve this matter, it is necessary first to determine whether participants in the Flexible Benefit Program may revoke their election under the Program. Respondent relies upon an IRS regulation which provides that "(i)f the coverage under a health plan . . . is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their elections of the health plan." I conclude they may do so as authorized by the Flexible Benefits Plan and Rules. The Division has essentially incorporated the Federal Regulation provision into its rules 22FB- 1.006(13) and 22FB-2.005(3) since the regulation allows an employee to revoke his participation in a health insurance plan whenever the participant's coverage under the Plan ceases.

   
   

   Rule 22FB-2.005(3), F.A.C., is significant to this inquiry. That rule provides a participant may revoke his election of a health insurance plan and elect coverage under another Plan if, during the Plan year, the coverage under the original health insurance Plan ceases. Petitioners' coverage never ceased. While Petitioners could have been left without health care coverage because of HAP's unanticipated cessation of coverage, the Department provided Petitioners with an alternative. Under Rule 22FB-2.005(3), a participant may revoke and elect another plan. That alternative plan must also be a State sponsored plan. Participants were informed they had the option of selecting an HMO Plan with Health Options or the State's Group Insurance Plan during a Special Enrollment August 15-31, 1989. However, Petitioners chose neither option. Although Petitioners knew other coverage was available, they have argued, for financial reasons, HAP's termination of business was a cessation of coverage.

   The witnesses testified as follows:

   
   

2. Was it your opinion at that point, Mrs. Keith, that there would be no coverage available to either of the two employees in question?

A. No. It's never been my opinion. I knew the State would cover them some way or another.

Q. OK. So you knew it wouldn't be a total cessation of coverage?

A. That's correct. (Tr. 33) Petitioner Cassano testified as follows:

A. . . .But when they (HAP) did go under, I found that the insurance available was not agreeable to me. (Tr. 44)

Q. Was that a motivating reason for electing---

A. Right, money. Yes. Save me some money. (Tr. 47)

Similarly, Petitioner McDonald testified thusly:

Q. Did you -- let me ask you first: Did you get a package of information from the Division of State Employees Insurance concerning the special enrollment period August 15th through August 31st?

A. Yes, I got information from them.

Q. Now, when you got that information, was one of the options available cancellation of State coverage completely?

A. No. No. They offered me two types of insurance. (Tr. 56)

Rule 22 FB-1.006(13)(b), F.A.C., defines qualifying status change as "changes in participant's health insurance coverage resulting in cessation of coverage." That clearly was not the case here as each Petitioner had coverage available after HAP ceased its participation in the State Health Plan. Coverage under the State Health Plan is one of two types: family, as defined in Rule

22K-1.103(7), F.A.C., or individual, as defined in Rule 22K-1.103(16), F.A.C.

Petitioners were advised the Special Enrollment period was only for the transfer of membership and that they could not change coverage (single to family or vice versa) or add dependents. Furthermore, Petitioners were advised the transfer of membership would not change their current premium rate.

Rule 22FB-1.006(13) defines a qualifying status change as "(c)hanges in a participant's health insurance coverage resulting in cessation of coverage." The agency interprets the words "cessation of coverage" to mean whenever the state no longer provides any health insurance coverage for its employees.

Accordingly, there was no cessation of coverage since there were other available health options offered Petitioners.

Prior to the submission of their modified Special Enrollment forms, petitioners were informed that the "cessation of coverage" noted in the State's Plan, Rules, and all literature provided to state employees meant a "qualifying status event" would only be viable if their insurance coverage under the State

Health Plan ceased. Accordingly, Petitioners can not argue they were mislead into enrolling in the Equitable Plan or Medicare based on a misunderstanding of respondent's interpretation of its plan rules.

Therefore, it is concluded that no qualifying status change has occurred and petitioners' request to discontinue the program, without penalty, is denied. It is, therefore,

ORDERED that the request of Terri K. Cassano and Edward M. McDonald to discontinue participation in the state health program prior to November 1, 1989 is denied.

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS

FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA

RULES OF APPELLATE PROCEDURE. SUCH PROCEED- INGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DEPARTMENT OF ADMINISTRATION, AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

DONE AND ORDERED in Tallahassee, Florida, this 11th day of June, 1990.

ALETTA L. SHUTES SECRETARY

DEPARTMENT OF ADMINISTRATION

435 CARLTON BUILDING TALLAHASSEE, FLORIDA 32399-1550 Telephone No.: (904) 488-4116

Certificate of Clerk:

Filed in the official records of the Department of Administration this 11th day of June, 1990.

Gwendolyn Williams, Clerk

cc: Bradford H. Copley, Esq.

Drawer SA

Post Office Box 9000 Bartow, Florida 33830-9000

Augustus D. Aikens, Jr., Esq. General Counsel

Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Docket for Case No: 89-006263

Orders for Case No: 89-006263