STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHRISTINA ANN SHINDLE,

Petitioner,

vs.

DEPARTMENT OF CHILDREN AND FAMILY SERVICES,

Respondent.

)

)

)

)

) Case No. 03-1314

)

)

)

)

)

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on June 19, 2003, by video teleconference between sites in Fort Myers and Tallahassee, Florida, before T. Kent Wetherell, II, the designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Lorna J. Scharlacken, Esquire

Harter, Secrest & Emery, LLP 5551 Ridgewood Drive, Suite 405

Naples, Florida 34108

For Respondent: Eugenie G. Rehak, Esquire

Department of Children and Family Services

Post Office Box 60085

Fort Myers, Florida 33906-0085 STATEMENT OF THE ISSUE

The issue is whether Petitioner is eligible for services under the Home Care for Disabled Adults Program.

PRELIMINARY STATEMENT

By letter dated March 20, 2003, the Department of Children and Family Services (Department) informed Petitioner that her application for services under the Home Care for Disabled Adults Program was denied because she was "financially ineligible" for the program. Thereafter, Petitioner orally requested a hearing regarding the Department's determination. The grounds for that request were summarized in the referral letter from the Department to the Division of Administrative Hearings (Division) dated April 7, 2003.

The Department twice requested that the undersigned relinquish jurisdiction over this case, first because Petitioner's oral request for a hearing failed to comply with Chapter 120, Florida Statutes, and the Uniform Rules of Procedure, and then because Petitioner had failed to identify any disputed issues of material fact. Those requests were denied through Orders dated April 30, 2003, and June 10, 2003.

The hearing was held on June 19, 2003. At the hearing, Petitioner testified in her own behalf and did not introduce any exhibits. The Department presented the testimony of David Caldwell, Tracey Seymour, Pamela Bolen, Roger Menotti, and Lynn Raichelson. The Department's Exhibits numbered 1 through 5 were received into evidence. At the Department's request, official

recognition was taken of Rule Chapters 65A-1 and 65C-1, Florida Administrative Code.

The one-volume Transcript of the hearing was filed with the Division on July 8, 2003. In accordance with Rule 28-106.216, Florida Administrative Code, the parties were given 10 days from the date that the Transcript was filed to file their proposed recommended orders (PROs). Petitioner did not file a PRO. The Department's PRO was timely filed and was given due consideration by the undersigned in preparing this Recommended Order.

FINDINGS OF FACT

Based upon the testimony and evidence received at the hearing, the following findings are made:

1. Parties

   
   

   1. Petitioner is a 41-year-old retired State of Florida employee. She retired on disability in August 2002 as a result of "extreme" and "terminal" medical problems, the precise nature of which is not reflected in the record.

   2. At the time of her retirement, Petitioner was working for the Department. She had worked for the Department and its predecessor, the Department of Health and Rehabilitative Services, for slightly more than ten years and she was a member of the Florida Retirement System (FRS).

   3. The Department is the state agency responsible for administering the Home Care for Disabled Adults Program ("HC/DA

      Program").

      
      

2. HC/DA Program

   
   

   1. The HC/DA Program is a state-funded program related to the federal supplemental security income (SSI) program. As such, the HC/DA Program is referred to as an "SSI-related program."

   2. The HC/DA Program is intended to provide an alternative to institutional or nursing home care for disabled adults. It does so by providing monthly support and maintenance payments for the care of eligible disabled adults in family-type living arrangements in private homes.

   3. The income threshold for the HC/DA Program is 300 percent of the SSI federal benefit rate, which is currently

      $552.00 per month. Accordingly, the income threshold for the HC/DA Program is $1,656.00 per month.

   4. An individual who has income in excess of $1,656.00 per month is ineligible for services under the HC/DA Program, no matter how significant his or her needs are.

   5. It is undisputed that Petitioner meets all of the other eligibility requirements for the HC/DA Program except the income threshold.

3. Petitioner's Income and the Health Insurance Subsidy

   
   

   1. Petitioner does not receive SSI benefits. Her only sources of income are a disability benefit she receives from the federal Social Security Administration (SSA) and a pension benefit she receives from the FRS.

   2. Petitioner's SSA disability benefit is $983.00 per month.

   3. Petitioner's gross FRS pension benefit is $701.00 per month. Her net benefit is only $410.00 per month as a result of health insurance premiums which are paid to Blue Cross and Blue Shield of Florida (BC/BS) by Petitioner through "payroll deductions."

   4. Included in Petitioner's gross FRS pension benefit is a health insurance subsidy of $50.40 per month.

   5. The subsidy amount is based upon the number of years of creditable service that Petitioner had with the State. It is calculated at a rate of $5.00 for each year of service.

   6. The subsidy may only be used by Petitioner to purchase health insurance.

   7. The subsidy does not cover the entire cost of Petitioner's health insurance. Even with the subsidy, Petitioner pays approximately $240.00 per month to BC/BS for health insurance.

   8. The subsidy is "optional" in the sense that Petitioner was required to separately apply for it under the FRS. However, upon application, the subsidy is legally owed to Petitioner as a result of her ten years of service to the State.

   9. The subsidy is paid directly to Petitioner, although Petitioner never actually receives the money since she has chosen to have it (and the remainder of her insurance premium) transferred to BC/BS through a “payroll deduction” from her monthly FRS check.

   10. Petitioner's total income is $1,684.00 per month if the health insurance subsidy is included, and it is $1,633.60 per month if the subsidy is excluded.

4. Department's Review of Petitioner's HC/DA Application and Determination of Ineligibility

1. On March 5, 2003, Petitioner met with Tracy Seymour, an adult services counselor with the Department, to determine whether she might be eligible for services under the HC/DA Program.

2. Ms. Seymour helped Petitioner complete the application for the HC/DA Program, and gathered general income information from Petitioner.

3. Petitioner's application was then forwarded to the Department's economic self-sufficiency unit for review. That

   unit is responsible for determining income eligibility where, as here, the applicant is not receiving SSI benefits.

4. To determine income eligibility, the economic self- sufficiency caseworker verifies the income and resource information provided by the applicant on the application.

5. Pamela Bolen was the caseworker responsible for reviewing Petitioner's application.

6. Ms. Bolen contacted the SSA and obtained a print-out detailing Petitioner's disability benefit. That print-out confirmed that Petitioner received an SSA benefit in the amount of $983.00 per month.

7. Ms. Bolen next called the Division of Retirement (DOR) to obtain information related to Petitioner's FRS pension benefit. Ms. Bolen was told that Petitioner's benefit was

   $650.60 per month with an additional $50.40 per month being paid towards Petitioner’s health insurance by the State.

8. Later, Ms. Bolen received a print-out from DOR which reflected Petitioner's gross FRS pension benefit as being

   $701.00. That figure is the sum of $650.60 and $50.40.

   
   

9. Because Ms. Bolen had not previously done an income eligibility determination for the HC/DA Program, she was unsure as to whether the $50.40 insurance subsidy was to be included or excluded when determining Petitioner's income. As a result, she

   contacted the economic self-sufficiency "help desk" for guidance.

10. Roger Menotti, an administrator with 18 years of experience in the economic self-sufficiency unit, responded to Ms Bolen's inquiry. Mr. Menotti researched those portions of the Department's policy manual that relate to the HC/DA Program.

11. The policy manual is not adopted by rule, nor is it incorporated by reference in any Department rule. However, the policy manual is consistent with the Department rules governing the HC/DA Program as well as the federal SSI rules.

12. Section 2640.0115.02 of the policy manual provides that "gross income is used to determine eligibility" for the HC/DA Program.

13. Section 1840.0102 of the policy manual provides that "[s]ome deductions withheld from gross income must be included as income" and that section specifically lists health insurance premiums as an example of such a deduction.

14. Section 1840.0118 of the policy manual provides:

    
    

    A vendor payment is a money payment made for SFU [sic] expenses by an individual or organization outside of the SFU [sic] from funds not legally owed to the SFU [sic].

    Vendor payments are excluded as income. . . .

    
    

    * * *

    
    

    Direct payments to a creditor or vendor on behalf of an individual are vendor payments

    and are excluded as available income to the individual with exception. When a vendor payment results in the individual directly receiving income, the income is

    included. . . .

    
    

    (Emphasis supplied.)

    
    

15. Section 1440.1400 of the policy manual provides that:

    
    

    Individuals must apply for and diligently pursue to conclusion an application for all other benefits for which they may be eligible as a condition of eligibility [for the HC/DA Program]. Need cannot be established nor eligibility determined upon failure to do so.

    
    

16. Section 1440.1400 specifically identifies retirement benefits and health insurance payments as examples of the other benefits for which the applicant must apply.

17. Based upon his review of the policy manual, and particularly the sections quoted above, Mr. Menotti concluded that the health insurance subsidy is not a "vendor payment" and that it must be included in Petitioner’s gross income.

    Mr. Menotti conveyed this conclusion to Ms. Bolen.

    
    

18. Thereafter, Ms. Bolen updated her calculations to reflect Petitioner's total monthly income as $1,684.00, which exceeds the income threshold for the HC/DA Program. Ms. Bolen then returned the application to Ms. Seymour.

19. Based upon the economic self-sufficiency unit's determination that Petitioner's income exceeded the threshold for the HC/DA Program, Ms. Seymour notified Petitioner in

    writing on March 20, 2003, that she was "financially ineligible" to receive home care services.

20. Ms. Bolen knew Petitioner when she was a Department employee. She and Ms. Seymour are continuing to work with Petitioner to identify Department programs for which Petitioner may be eligible. As of the date of the hearing, those efforts had resulted in Petitioner being found eligible for the Department's Medical Needy Program.

21. Upon learning that her income exceeded the threshold for the HC/DA Program, Petitioner considered giving up the health insurance subsidy in order to reduce her income below the threshold. Ms. Bolen advised her not to do so.

22. Ms. Bolen's advice was based upon Section 1440.1400 of the policy manual which does not allow an applicant for services under the HC/DA program to turn down other benefits or assistance that they may be eligible for. Had Ms. Bolen not given Petitioner this advice, Petitioner would have given up the health insurance subsidy for no reason.

23. In a final effort to determine whether there was any means by which Petitioner could be found eligible for services under the HC/DA Program, Petitioner’s case was referred to Lynn Raichelson, an adult services policy specialist with the Department's Tallahassee office, for review.

24. Ms. Raichelson contacted DOR to obtain information regarding the operation of the health insurance subsidy. She also contacted the Atlanta office of the SSA, which is the federal agency responsible for administration of the SSI program. Based upon information that she received from those sources, Mr. Raichelson concluded that the subsidy must be included as income in determining eligibility for services under the HC/DA Program.

    CONCLUSIONS OF LAW

    
    

25. The Division has jurisdiction over the parties to and subject matter of this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. (All references to Sections are to the 2002 compilation of the Florida Statutes. All references to Rules are to the current version of the Florida Administrative Code.)

26. Petitioner has the burden to prove her eligibility for services under the HC/DA Program; the standard of proof is a preponderance of the evidence. See Department of Banking and

    Finance v. Osborne Stern and Company, 670 So. 2d 932, 934 (Fla. 1996); Florida Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778, 787-88 (Fla. 1st DCA 1981);

    Section 120.57(1)(j).

    
    

27. Eligibility for services under the HC/DA Program is governed by Section 410.036, which provides:

    Criteria for determining eligibility for this program shall be the same as criteria used to determine eligibility for assistance under Title XVI of the Social Security Act,[1] as the same exists on July 1, 1977, or shall be the same as financial criteria used to determine eligibility for nursing home care under the Medicaid program.

    
    

28. The Department rules implementing the HC/DA Program are codified in Rule Chapter 65C-1.

29. Rule 65C-1.004(3) provides that in order to be eligible for services under the HC/DA Program, an applicant must:

    Meet the same criteria used to determine eligibility assistance under Title XVI of the Social Security Act; or meet the same financial criteria used to determine eligibility for nursing home care as defined in Chapter 65A-1, F.A.C., Florida Medicaid Eligibility; . . . .

    
    

30. Rule 65C-1.005 provides in pertinent part:

    
    

    1. An application as specified in 65A-1, F.A.C., for determination of financial eligibility for the Home Care for Disabled Adults Program shall be completed in its entirety and shall be submitted to the Department of Children and Families;

       
       

    2. Financial eligibility shall be determined as meeting Institutional Care Program (ICP) standards or MEDS-AD standards by designated Departmental staff or verified to meet Social Security Income (SSI) standards by the Social Security

       Office; . . . .

       
       

31. Rule Chapter 65C-1 does not include any additional detail to guide the determination of financial eligibility. The

    details, including the ICP standards referenced in 65C-1.005(2), are found in Rule Chapter 65A-1.

32. Rule 65A-1.713 provides in pertinent part:

    
    

    1. Income limits. An individual's income must be within limits established by federal or state law and the Medicaid State Plan. The income limits are as follows:

       
       

       * * *

       
       

       (d) For ICP, gross income cannot exceed

       300 percent of the SSI federal benefit rate after consideration of allowable deductions set forth in subsection 65A-1.713(2), F.A.C. Individuals with income over this limit may qualify for institutional care services by establishing an income trust which meets criteria set forth in paragraph 65A- 1.702(14)(a), F.A.C.

       
       

       * * *

       
       

    2. Included and Excluded Income. For all SSI-related coverage groups the department follows the SSI policy specified in 20 C.F.R. 416.1100, et seq., . . . to determine what counts as income and what is excluded as income with the following exceptions:

       
       

       1. In-kind support and maintenance is not considered in determining income eligibility.

          
          

       2. Income which is considered irregular or infrequent is not considered in determining income eligibility.

          
          

       3. Income placed into a qualified income trust is not considered when determining if an individual meets the income standard for ICP, institutional Hospice program or

          HCBS. . . .

          (Emphasis supplied). Accord Rule 65A-1.701(15) (defining "income" for purposes of SSI-related programs to be as specified in "20 C.F.R. §416.1100 et al. [sic] and Rule 65A-1.713, F.A.C.").

33. The federal regulations referenced in the Department's rules establish what is income, what is not income, and how income is computed for purposes of determining eligibility for assistance under Title XVI of the Social Security Act. See 20 CFR Sections 416.1100 through 416.1182. See also 42 U.S. Code Section 1382a.

34. Of particular significance is 20 CFR Section 416.1103, which provides in pertinent part:

    Some things you receive are not income because you cannot use them as food, clothing, or shelter, or use them to obtain food, clothing, or shelter. In addition, what you receive from the sale or exchange of your own property is not income; it remains a resource. The following are some items that are not income:

    
    

    1. Medical care and services. Medical care and services are not income if they are any of the following:

       
       

       1. Given to you free of charge or paid for directly to the provider by someone else;

          
          

          * * *

          
          

          (3) Assistance provided in cash or in kind (including food, clothing, or shelter) under a Federal, State, or local government program, whose purpose is to provide medical

          care or services (including vocational rehabilitation);

          
          

          * * *

          
          

          (6) Direct payment of your medical insurance premiums by anyone on your behalf.

          
          

          * * *

          
          

    2. Social services. Social services are not income if they are any of the following:

       
       

       1. Assistance provided in cash or in kind (but not received in return for a service you perform) under any Federal, State, or local government program whose purpose is to provide social services including vocational rehabilitation (Example: Cash given you by the Department of Veterans Affairs to purchase aid and attendance); . . . .

    
    

    (Emphasis supplied).2

35. Petitioner’s eligibility for services under the HC/DA Program turns upon whether her monthly health insurance subsidy of $50.40 should be included or excluded when calculating Petitioner's income. If the subsidy is included, then Petitioner's income exceeds the threshold for the HC/DA Program; if it is excluded, then Petitioner's income is below the threshold and she is eligible for services.

36. Although it is a close question, an analysis of the statute and DOR rule governing the health insurance subsidy leads to the conclusion that the subsidy must be included as income in determining Petitioner’s eligibility for services

    under the HC/DA Program. As a result, Petitioner is ineligible for services under the HC/DA Program because her income exceeds the program's threshold.

37. The purpose of the subsidy is “to provide a monthly subsidy payment to retired members of any state-administered retirement system in order to assist such retired members in paying the costs of health insurance.” See Section 112.363(1).

38. Except for certain limited exceptions not applicable here, all retired members of the FRS are eligible for the subsidy. See Section 112.363(2)(a); Rule 60S-4.020(1). The subsidy is "optional" only in the sense that retired FRS members are not required to purchase health insurance and, even if the member purchases insurance, he or she is not required to apply for the subsidy. See Rule 60S-4.002(7).3

39. If application is made for the subsidy and if the retired FRS member provides DOR certification of his or her insurance coverage, the subsidy "shall be paid" by DOR. See Rule 60S-4.020(1). The subsidy is calculated based upon the number of years of service the retired member had with the State. See Section 112.363(3); Rule 60S-4.020(3). In these respects, the subsidy is clearly an entitlement of the retired FRS member based upon his or her prior service to the State, not unlike the member’s general FRS pension benefit. As a result,

    the subsidy does not qualify under the exception in 20 CFR Section 416.1103(b).

40. The subsidy is paid to the retired FRS member, not the company through which the member obtains the health insurance. See Section 112.363(4); Rule 60S-4.020(1). Therefore, it is not a “vendor payment” as described in Section 1840.0118 of the Department’s policy manual for the HC/DA Program, nor does it qualify under the exceptions in 20 CFR Section 416.1103(a)(1) or (a)(6).

41. The subsidy does not qualify under the exception in 20 CFR Section 416.1103(a)(3) because the purpose of the FRS is not to provide medical care or services; its purpose is to provide retirement benefits. The fact that the retirement benefit in this instance is a subsidy for the purchase of health insurance is of no consequence; it is still part of the general FRS retirement benefit.

42. In her "answer" to the Department's second motion to dismiss,4 Petitioner argued that the Department had an affirmative duty to inform her of policies that might allow her to be found eligible for the HC/DA Program. In support of this argument, Petitioner relied upon 45 CFR Section 206.10(a)(2)(i) and Pond v. Department of Health and Rehabilitation Services,

    503 So. 2d 1330 (Fla. 1st DCA 1987). Petitioner's argument on

    this issue is not supported by the facts established at the hearing or the law.

43. As a matter of fact, the preponderance of the evidence demonstrates that the Department's employees diligently worked with Petitioner throughout the application process to try to identify a program that would provide her the services that she apparently needs, and they are continuing to work with her. The preponderance of the evidence further demonstrates that the decision to find Petitioner ineligible for the HC/DA Program was made only after a thorough review of Petitioner's circumstances and a comprehensive analysis of the applicable eligibility criteria and exceptions (including the vendor payment policy) by Department staff in both Fort Myers and Tallahassee.

44. As a matter of law, the federal rule relied upon by Petitioner is inapplicable because it is part of the aid for families with dependent children (AFCD) program, not the SSI program. No similar rule could be found in 20 CFR Part 416, which governs the SSI program, or in Rule Chapters 65A-1 or 65C-1, which govern the HC/DA Program.

45. Pond is distinguishable for that same reason; it involved an applicant for AFCD benefits, not SSI benefits or services under the HC/DA Program. Moreover, it is questionable whether Pond is still good law in light of Gardebring v. Jenkins, 485 U.S. 415 (1988). See Brunner v. Ward County Social

Services., 520 N.W. 2d 228, 231-32 (N.D. 1994) (refusing to follow Pond and its progeny since those cases were decided before or did not take into account Gardebring, and also concluding that 45 CFR Section 206.10(a)(2)(i) does not require caseworkers to advise AFCD applicants how to manipulate or avoid program eligibility rules).

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Children and Family Services issue a final order denying Petitioner's application for services under the Home Care for Disabled Adults Program because her income level exceeds the threshold for the program.

DONE AND ENTERED this 30th day of July, 2003, in Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 2003.

ENDNOTES

1/ 42 U.S. Code Section 1381, et seq.

2/ See also 20 CFR Sections 416.1112 and 416.1124, which list other types of income that are not counted in determining eligibility for SSI benefits. However, those regulations are not implicated in this case.

3/ Rule 60S-4.002(7), which is promulgated by DOR pursuant to its regulatory authority over the FRS, provides:

A person who is retired under the Florida Retirement System may not have his monthly retirement benefit reduced for the purpose of preserving his eligibility for pensions or benefits under some other state or federal program. A person may refuse application of . . . the Retiree Health Insurance Subsidy as provided in 60S-4.020.

Although this rule seems to suggest that a person may refuse the health insurance subsidy (but not other FRS benefits) in order to preserve his or her eligibility for services under another program, the rule cannot be construed in that manner without creating an inconsistency with the federal regulations governing eligibility for SSI benefits which, in turn, govern eligibility for the HC/DA Program. In this regard, 20 CFR Section 416.210(a) explicitly provides that a person is "not eligible for SSI benefits if [he or she] does not apply for all other benefits for which [he or she] may be eligible." The "other benefits" referred to in that regulation include retirement benefits. See 20 CFR Section 416.210(b). Section 1440.1400 of the Department’s policy manual for the HC/DA Program is in accord with these federal regulations. Because the Department, not DOR, is the agency responsible for implementing SSI-related programs such as the HC/DA Program in a manner consistent with the federal SSI regulations, its rules and policies prevail over the seemingly contradictory DOR Rule 60S-4.002(7).

4/ The "answer" was a belated response to the Order issued on April 30, 2003, which denied the Department's initial motion to dismiss but required Petitioner to "file something in writing with the undersigned which sets forth in detail the disputed facts upon which her hearing request is based."

COPIES FURNISHED:

Eugenie G. Rehak, Esquire Department of Children and

Family Services Post Office Box 60085

Fort Myers, Florida 33906-0085

Lorna J. Scharlacken, Esquire Harter, Secrest & Emery, LLP 5551 Ridgewood Drive, Suite 405

Naples, Florida 34108

Paul F. Flounlacker, Agency Clerk Department of Children and

Family Services

1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700

Josie Tomayo, General Counsel Department of Children and

Family Services

1317 Winewood Boulevard

Building 2, Room 204

Tallahassee, Florida 32399-0700

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: 03-001314

Orders for Case No: 03-001314