STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KELLIE BROWN, )

)

Petitioner, )

)

vs. ) Case No. 97-2991

) DEPARTMENT OF MANAGEMENT ) SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was held by the Division of Administrative Hearings, before Administrative Law Judge, Daniel M. Kilbride, in Orlando, Florida, on October 1, 1997. The following appearances were entered:

APPEARANCES

For Petitioner: Thomas J. Pilacek, Esquire

Maitland Green

601 South Lake Destiny Road, Suite 601 Maitland, Florida 32751

For Respondent: Stanley M. Danek, Esquire

Department of Management Services Division of Retirement

Cedars Executive Center

2639 North Monroe Street, Building C Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether the Petitioner, Kellie Brown, on behalf of her minor son, Brandon Brown, is entitled to payment of the Health Insurance Subsidy on the retirement account of Corporal Arthur

"Donnie" Brown, deceased, for the period of February 1, 1994, through and including September 1996.

PRELIMINARY STATEMENT

By letter dated June 10, 1997, the Director of the Division of Retirement denied Petitioner's application for retroactive survivor benefits filed on behalf of her son. Petitioner subsequently filed a Petition for a Formal Hearing with the Respondent, and this matter was referred to the DOAH on July 1, 1997, for a formal hearing. Following discovery a formal hearing was held on October 1, 1997.

At the hearing, the undersigned took official recognition of Section 112.363, Florida Statutes, Rule 60S-4.020, Florida Administrative Code, and Mirabella v. Division of Retirement, DOR Case No. 96-05, issued April 17, 1996, and the opinion of the 1st DCA, dated March 7, 1997. Petitioner testified in her own behalf and called one witness to testify. One exhibit was offered in evidence. Respondent offered the testimony of two witnesses and five documents were admitted in evidence. The hearing was recorded but not transcribed.

Following the order granting the Motion for Extension of Time for filing proposed recommended orders, Petitioner filed her proposals on October 17, 1997, and Respondent filed its proposals on October 22, 1997. Both parties' proposals have been given careful consideration and adopted when supported by a preponderance of the credible evidence.

FINDINGS OF FACT

1. Kellie M. Brown (Petitioner) is the natural mother and guardian of Brandon D. Brown, a minor child, whose deceased father was Donnie Brown.

2. At the relevant times, Donnie Brown was employed by the Orange County Sheriff's Office (Sheriff's Office) as a deputy with the rank of Corporal, and was a compulsory member of the Florida Retirement System (FRS).

3. On or about January 16, 1994, Cpl. Brown disappeared from public view and did not report for duty with the Sheriff's office. His last day of work was listed as January 15, 1994. He was subsequently terminated from his position for failure to report for duty.

4. His body was later found on March 15, 1994, and after examination by the county medical examiner, it was determined that his date of death was January 15, 1994. Based on this determination, survivorship benefits became available to Brandon Brown as if his father had died while still employed with the sheriff's office.

5. The Petitioner is the former spouse of the deceased. After the discovery of the body, the Sheriff's office offered to assist Petitioner in the completion and transmission of the necessary paperwork to obtain available benefits.

6. The Sheriff's Office enrolled Brandon under its health insurance plan for one year at no cost to the Petitioner.

7. In March 1994, Petitioner visited the personnel office of the Sheriff's Office. She was given many forms and applications to sign in order to obtain benefits for her son.

8. Petitioner testified that one of the forms in the packet of material was the Health Insurance Subsidy (HIS) application form of the Respondent. She claimed it was given to her in a manila folder by Barbara Hill, a personnel specialist with the Sheriff's Office. Petitioner later had another conversation with Ms. Hill in which the Petitioner wanted to know where the completed form was and insisted that the HIS form was in the material given to her by Ms. Hill. Petitioner then stated that Ms. Hill called the offices of the Respondent in Tallahassee and was told that her son was not eligible for the HIS payment. Thereafter, Petitioner stated that she did not pursue the issue.

9. On behalf of her minor son, the Petitioner applied for and began receiving a FRS retirement benefit on the account of Cpl. Brown, effective July 1994 and retroactive to February 1994.

10. After Brandon's name was added to the retired payroll, in July 1994, Petitioner was notified by mail from the Respondent that Brandon was also eligible for payment of a HIS, which is a benefit separate from the retirement benefit that is paid to retirees and their beneficiaries to help offset the cost of health insurance. Petitioner did not return the HIS application form.

11. Notification of new retirees after their name has been

    added to the retired payroll about their eligibility for the HIS is the normal and customary practice of Respondent. The HIS application form of Respondent is not given to the employing agency. Therefore, the Sheriff's office would not have a copy of the form to give to Petitioner. Instead, the HIS form is sent by the Respondent directly to the retired member or the beneficiary after the actual retirement. The form is sent out at the same time or shortly after the notice to the retiree that he or she has been placed on the retired payroll. Brandon Brown was added to the retired payroll in July 1994, retroactive to February 1994, and the notification letter form was sent to Petitioner in July 1994. The HIS form would have been sent at that time or shortly thereafter.

12. In early 1997, Barbara Hill reviewed the roll of retirees because of a reengineering program instituted by the Sheriff's office. She found three widows who were not being paid the HIS benefits by Respondent, including Petitioner. She contacted all three women at the request of the Sheriff's office. Respondent sent information about the program to the women.

13. As the result of conversations between Petitioner and Barbara Hill of the Sheriff's office, Petitioner was sent an HIS application form by Respondent, which she completed and returned to the Division on April 23, 1997. Brandon was added to the HIS payroll retroactive to October 1996. The amount of the benefit is $51.99 per month.

14. The Sheriff's office has a health insurance subsidy program for its retired members that is similar to the FRS HIS program and is the same dollar amount as the HIS benefit paid by FRS. However, it is paid only to members and not to beneficiaries so that a beneficiary like Brandon would receive the FRS HIS payment but would not receive the Sheriff's Office HIS payment.

15. The Respondent makes regular efforts to notify retirees of the various benefits offered to them under FRS. As it applies to this case, the Respondent issues a pamphlet entitled "After You Retire" on a periodic and ongoing basis. The then current edition was issued in October 1993, and provided on page 7, information about the HIS. The pamphlet stated as follows:

    The health insurance subsidy (HIS) is a monthly supplemental payment that you may be eligible to receive if you have health insurance coverage. This monthly payment, which you must apply for, is figured by multiplying your total years of creditable service at retirement (up to a maximum of 30 years) by $3. The minimum monthly subsidy is

    $30 and the maximum is $90.

    
    

    After your name is added to the retired payroll, an application for the health insurance subsidy, Form HIS-1, will be mailed to you. The completed application must be returned to the Division of Retirement within six (6) months of the date your retirement benefits commenced if you wish to receive the subsidy retroactive to your retirement date. If you fail to return the form within six (6) months, retroactive subsidy payments will be limited to a maximum of six (6) months. It is your responsibility to obtain certification of health insurance coverage and apply for the health insurance subsidy.

    (emphasis in quoted material)

    
    

16. The Respondent also issued a "Retiree Newsletter" in December 1994, and informed all retirees about updates to the HIS program. On page 3, the Newsletter stated:

    
    

    The Health Insurance Subsidy (HIS) is an extra payment that is added to your monthly retirement benefit to help you pay the cost of health insurance. To be eligible for receive the HIS payment, retirees must have health insurance, Medicare or Champus. The subsidy payment which you must apply for, is

    $3 per month for each year of creditable service you had earned at retirement. The minimum monthly subsidy is $30 and the maximum is $90.

    
    

    If you believe you are eligible for the subsidy but are not currently receiving it, you should call or write the Disbursement Section and request Form HIS-1, Health Insurance Subsidy Certification. If you apply for the HIS after you retire, you will receive retroactive HIS payments limited to a maximum of six months, or the number of months you have been retired, if less than six months. (emphasis in quoted material)

17. Petitioner was mistaken in her belief that the application form for FRS HIS benefits was provided to her by the Sheriff's Office in March 1994.

    CONCLUSIONS OF LAW

    
    

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

19. Section 112.363, Florida Statutes, establishes a trust

    fund and administrative scheme for providing HIS. It is funded by mandatory contributions to be made by a participating employer during the employment of each member of FRS.

20. Section 112.363(2), Florida Statutes, provides, in pertinent 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 Division of Retirement."

21. The Respondent has adopted administrative rules to implement the above statutory provision.

22. Rule 60S-4.020, Florida Administrative Code, provides that payment to an eligible beneficiary of the HIS supplement is compulsory:

    1. A monthly retiree health insurance subsidy shall be paid to each eligible retired member or beneficiary who is a spouse or financial dependent receiving a benefit from a state-administrated retirement system

       . . .

       
       

23. Rule 60W-4.020(2), Florida Administrative Code, sets forth the procedure for obtaining HIS benefits and retroactive HIS benefits as follows:

    Health Insurance coverage for the retiree or beneficiary must be certified in accordance with procedures established by the Division. If the Division receives such certification within 6 months after retirement benefits commence, the Retiree Health Insurance Subsidy shall be paid retroactive to the effective retirement date. However, if the Division receives the certification of insurance coverage 6 or more months after retirement benefits commence, the member will

    be eligible to receive retroactive payments for a maximum of 6 months only.

    
    

24. Section 112.363(2), Florida Statutes, and Rule

    
    

    60S-.020(2), Florida Administrative Code, require that a member of the FRS must provide certification of health insurance coverage to the Respondent on a timely basis, within six (6) months, in order to receive the HIS benefits retroactive to the effective retirement date.

25. In this case, Petitioner claims that she was given the HIS application form by the employees of the Sheriff's office within a short time after the body of Cpl. Brown was discovered.

26. Based on the preponderance of evidence, it is concluded that the HIS application form issued by the Respondent was not given to the Petitioner at the time she believes it to have been given (within a week or so of the discovery of Cpl. Brown's body). The form was not in the possession of the Sheriff's office and could not have been given to her. The evidence is persuasive that the form was sent to the Petitioner by the Respondent as part of its normal and usual course of business. The Petitioner, for reasons not clear in the record, either ignored the form or overlooked it. Therefore, for whatever reason, the form was not completed until April 1997.

27. The Sheriff's Office also has a similar HIS benefit program for former employees for which the minor son, Brandon, was not eligible. From the testimony, it is evident that Petitioner has confused the HIS program of the FRS with the

    similar program of the Department.

    
    

28. Petitioner further argues that the payment of the HIS subsidy was a vested right and that the Respondent was required by law to pay the benefit amount back to the effective date of retirement regardless of the date on which she made application. While benefits under the FRS are "declared to be of a contractual nature," Section 121.011(3)(d), Florida Statutes, the authority to pay the HIS is not found in Chapter 121, Florida Statutes, but is found in Chapter 112, Florida Statutes. There is no provision in that chapter, either express or implied, which would make the HIS benefit "contractual in nature" or a vested right. Instead, the law expressly provides in part as follows:

    Should funds for the retiree health insurance subsidy program fail to provide full benefits for all participants, the benefits may be reduced or canceled at any time. Section 112.363(5), Florida Statutes.

    
    

29. The Respondent had adopted an administrative rule which does not provide authority to the Respondent to pay retroactive HIS benefits beyond the six (6) month period. The Respondent, without express authority by statute or rule, is prohibited from granting the Petitioner's request. An Administrative Law Judge is bound to follow the provisions of said rule, unless the rule is properly challenged under the provisions of Section 120.56, Florida Statutes (Supp. 1996). No such rule challenge has been initiated in this case.

30. The Respondent has had a prior case in which the

    payment of the HIS benefit was not made to the retiree for almost three years after retirement because the retiree had not made a timely application for the benefit. The Respondent held that the rule provision concerning the need to make an application was clear and did not permit the Division to waive its application because the retiree did not submit the HIS application form timely. Mirabella vs. Division of Retirement, DOR Case No.

    96-05, Final Order issued April 17, 1996; Mirabella vs. Division of Retirement, 689 So. 2d 1075 (Fla. 1st DCA 1997). The rule of stare decisis applies in this case. Department of Health and Rehabilitative Services v. Barr, 359 So. 2d 503 (Fla. 1st DCA 1978).

31. Therefore, based on the Petitioner's failure to submit the HIS certification form to the Respondent in a timely manner (approximately two and one-half years after retirement benefits for Brandon had commenced), the request of the Petitioner must be denied.

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law, it is

RECOMMENDED that a Final Order be issued by the Division of Retirement determining that the Petitioner, Kellie Brown, is not entitled to the payment of the Health Insurance Subsidy for her minor son on the retirement account of Corporal Arthur "Donnie" Brown, deceased, for the period of February 1, 1994, through and including September 1996.

RECOMMENDED this 17th day of November, 1997, at Tallahassee, Leon County, Florida.

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 17th day of November, 1997.

COPIES FURNISHED:

Kellie M. Brown, pro se 12868 Downstream Circle

Orlando, Florida 32828

Stanley M. Danek, Senior Attorney Department of Management Services Division of Retirement

2639 North Monroe Street, Building C Tallahassee, Florida 32399

Thomas J. Pilacek, Esquire Thomas J. Pilacek & Associates 601 South Lake Destiny Road Maitland, Florida 32751

Paul A. Rowell, General Counsel Department of Management Services 4050 Esplanade Way

Tallahassee, Florida 32399-0950

A. J. McMullian, III, Director Department of Management Services Division of Retirement

Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

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.

Docket for Case No: 97-002991

Orders for Case No: 97-002991