The Issue Whether Petitioner's claim against her state group health insurance company for services related to a Magnetic Resonance Imaging examination (MRI) should be granted or denied.
Findings Of Fact At all times material hereto, Petitioner was employed by the State of Florida and was a participant in the State of Florida group health insurance plan, which is a self-insured plan administered by the State of Florida in conjunction with the plan's third party administrator, Blue Cross Blue Shield of Florida (BCBSF). This plan is frequently referred to as the PPO Plan, an acronym for preferred provider organization. Prior to April 26, 2002, Petitioner's physician detected a lump in Petitioner's right breast. Petitioner's physician ordered mammography and ultrasound examinations to be performed on Petitioner's right breast. Those examinations were performed on April 1, 2002. Following those tests, Petitioner's physician ordered an MRI examination of the right breast, which was performed on April 26, 2002, and is the procedure at issue in this proceeding. Following that MRI, Petitioner had another mammography and ultrasound for the diagnosis and treatment of breast cancer. Respondent has paid Petitioner's claims for coverage of the mammography and ultrasound examinations. Respondent has denied payment for the professional fee associated with the MRI in the amount of $215.00. Respondent has paid the facility fee associated with the MRI in the amount of $1,705.00. Respondent asserts that the payment of that fee was in error and intends to seek reimbursement for that payment if it prevails in this proceeding. The terms of coverage of the state group health insurance plan are set forth in a document entitled "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document" (Benefit Document). The Benefit Document (at page 31, paragraph 47 of the section entitled "Services Not Covered By The Plan") specifically excludes the following from coverage: 47. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The Benefit Document has a section entitled "Definitions of Selected Terms Used By The Plan" beginning at page 49. The definition of the phrase "experimental or investigational services", found at page 51, includes, in pertinent part, the following: . . . any evaluation, treatment, therapy, or device that: * * * is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or a similar condition The Benefit Document provides at page 51 that BCBSF and the Division of State Group Insurance determine whether a service is experimental or investigational. The testimony of Dr. Wood established that an MRI of the breast is experimental or investigational within the meaning of the Benefit Document. 2/ MRI examinations of the breast are not reliable diagnostic tools because such examinations result in an unacceptable number of cases where an MRI produces false negative findings that reflect the absence of cancer where cancer is, in fact, present in the breast. According to Dr. Wood, an MRI cannot be relied upon and should not be used to avoid a biopsy of a suspicious mass because a patient would run an unacceptable risk that the detection of cancer may be delayed or missed. Dr. Wood also testified that radiologists in Florida performing services for the state group insurance health plan have been informed of BCBSF's position. Petitioner's doctors did not inform her prior to the examination that the MRI examination would not be covered by her insurance plan.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a final order denying coverage for the MRI claims submitted by Petitioner. DONE AND ENTERED this 17th day of February, 2003, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 17th day of February, 2003.
The Issue Whether Respondents violated various provisions of the Florida Insurance Code, and, if so, what disciplinary action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent The Administrators Corporation (hereinafter "TAC") has been an authorized administrator, and Respondent Charles N. Zalis (hereinafter "Zalis") has been licensed or eligible for licensure as a life insurance agent, a life and health insurance agent, and a legal expense insurance sales representative in the State of Florida. Zalis is the chief executive officer of TAC. TAC is not licensed in Florida as an insurer. An authorized administrator in Florida may engage in the solicitation, negotiation, transaction and/or sale of insurance in Florida if such activity takes place pursuant to an agreement between the authorized administrator and an authorized insurer. Life and Health Insurance Company of America (hereinafter "Life & Health"), which is not a party to this administrative proceeding, is an authorized insurer in Florida. On April 13, 1988, TAC entered into a contract with Life & Health to market and service group health insurance. The term of that contract was for four years and one month. Life & Health attempted to terminate its Administrator Agreement with TAC by letter dated March 16, 1989, effective immediately. The date on which the responsibilities under that Administrator Agreement terminated, if ever, is an issue in dispute between Life & Health and TAC. The Department takes no position on that issue. That issue is the subject of a civil lawsuit filed in Broward County, between Life & Health and TAC, which is currently being litigated. Although Life & Health's original position was that the contract between it and TAC terminated as of March 16, 1989, that position apparently changed because Life & Health continued paying claims up to July 1, 1989. TAC's position was that Life & Health's responsibilities under that contract did not terminate until September 26, 1989, when George Washington, an authorized group health insurance carrier in Florida, agreed to assume the risk for the block of business retroactive to July 1, 1989. TAC could have obtained a replacement carrier earlier than September 26, 1989, if the Department had advised TAC and Zalis as to the procedure involved to allow Summit Homes, an authorized property and casualty insurer, to broaden the scope of its certificate of authority to include group health insurance. The simple procedure could have been accomplished in as little as 24 to 48 hours. A group health insurance carrier remains on the risk to its policyholders until there has been a valid cancellation or termination of that coverage. In the pending Circuit Court litigation between Life & Health and TAC, the validity of the termination or cancellation and the date of same are ultimate issues in that law suit and have not yet been determined by the Court. On March 27, 1989, Life & Health sent a letter to agents informing them of its termination of its relationship with TAC and that it would not accept any new business written after March 16, 1989. The evidence in this cause, however, indicates that Life & Health did continue to accept new business after that date. The Department became aware of the dispute between Life & Health and TAC on June 8, 1989. The Department knew as of July 12, 1989, that TAC was continuing to write business on Life & Health "paper." At some point after the attempted March 16, 1989, termination of the contract by Life & Health, TAC and Life & Health informally agreed to a July 1, 1989, date after which Life & Health would no longer be responsible for any claims and TAC would have a replacement insurer in place to take over the block of business. That agreement was based upon TAC and Life & Health each agreeing to cooperate with each other and to take certain actions to facilitate the transfer of the book of business. Both the Department and the Circuit Court were aware of the informal agreement whereby Life & Health agreed to remain on the risk for the block of business at least through July 1, 1989, and Zalis and TAC would issue no further policies on Life & Health "paper" and would not remain involved in the processing or payment of claims after July 1, 1989. Prior to July 12, 1989, those matters required to take place in connection with the July 1, 1989, "cutoff" date had not been accomplished, and Zalis and TAC continued writing new business on Life & Health "paper" believing that Life & Health was still legally responsible. Zalis informed the Department's investigator on July 12, 1989, that he was writing and that he intended to continue to write new business on Life & Health "paper." No evidence was presented to show that the Department notified Zalis or TAC that they could not do so, and the Department took no action to stop that activity. Additionally, Life & Health took no action to enjoin TAC or Zalis from writing new business on Life & Health "paper." The evidence does suggest that Life & Health may have continued to accept the benefits and liabilities. The premiums for policies written by TAC on Life & Health "paper" after July 1, 1989, were not forwarded to Life & Health; rather, they were retained by TAC in a trust account. Zalis and TAC offered to deposit those monies with the Circuit Court in which the litigation between TAC and Life & Health was pending or to transmit those monies to the Department to insure that the monies would be available for the payment of claims. Pursuant to an agreement with the Department, the monies representing those premium payments were transmitted to the Department On September 26, 1989, George Washington Insurance Company, an authorized health insurance company in the State of Florida, agreed to take over the block of business from Life & Health, retroactive to July 1, 1989. Life & Health, however, had not yet signed the assumption agreement to transfer its responsibility to George Washington Insurance Company as of the time of the final hearing in this cause. TAC and Zalis did not place any Florida insurance business with any companies not authorized to do business in Florida. Respondent Zalis has been in the insurance business for 26 years and enjoys a good reputation for honesty and integrity. Zalis and TAC have never had prior administrative action taken against them. As of the date of the final hearing in this matter, there had been no Circuit Court determination of the effectiveness or ineffectiveness of Life & Health's termination of the Administrators Agreement nor of the date of that termination, if any.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondents not guilty of the allegations contained in the Order to Show Cause and dismissing the Order to Show Cause filed against them. DONE and ENTERED this 9th day of July, 1990, at Tallahassee, Florida. LINDA M. RIGOT, 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 9th day of July, 1990. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 89-5981 Petitioner's proposed findings of fact numbered 1-3, 6-9, 14-17, 20, 21, and 25-27 have been adopted either in substance or verbatim in this Recommended Order. Petitioner's proposed findings of fact numbered 4 and 5 have been rejected as not constituting findings of fact but rather as constituting conclusions of law or argument of counsel. Petitioner's proposed findings of fact numbered 10, 11, 13, and 22 have been rejected as being unnecessary for determination of the issues in this cause. Petitioner's proposed findings of fact numbered 12 and 19 have been rejected as being irrelevant to the issues under consideration in this cause. Petitioner's proposed findings of fact numbered 18, 23, and 24 have been rejected as not being supported by the weight of the evidence in this cause. Respondents' proposed findings of fact numbered 1-17 have been adopted either verbatim or in substance in this Recommended Order. COPIES FURNISHED: Peter D. Ostreich, Esquire Office of Treasurer and Department of Insurance 412 Larson Building Tallahassee, Florida 32399-0300 Jerome H. Shevin, Esquire Wallace, Engels, Pertnoy, Martin, & Solowsky, P.A. CenTrust Financial Center 21st Floor 100 Southeast 2nd Street Miami, Florida 33131 William M. Furlow, Esquire Katz, Kutter, Haigler, Alderman, Davis, Marks & Rutledge, P.A. Post Office Box 1877 Tallahassee, Florida 32302-1877 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issue presented for decision in this case is whether the Department of Management Services properly denied medical insurance reimbursement to Marianne Fahle for EDTA chelation therapy services provided to her husband, John Fahle.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record in this proceeding, the following findings of fact are made: Marianne Fahle is a retired employee of the State of Florida. At all times pertinent to this case, Marianne Fahle was a participant in the State of Florida group health insurance plan. Her husband, John Fahle, is a covered dependent. The state group insurance program is a self-insured health insurance plan administered for the State of Florida for its employees by Blue Cross Blue Shield of Florida ("BCBSF"). In August 2000, John Fahle was hospitalized after he collapsed at his home. Medical tests revealed that Mr. Fahle suffered from arteriosclerosis with an estimated 60-80% stenosis, or blockage, of his carotid artery. Rather than undergo surgery to relieve the blockage, Mr. Fahle chose a course of treatment commonly called EDTA chelation therapy. Chelation therapy involves the intravenous injection of ethylene-diamine-tetra acetic acid (edetic acid or EDTA) accompanied by nutritional supplements. After undergoing chelation therapy, Mr. Fahle's diagnostic tests were repeated, with reported results indicating some reduction of the blockage in his coronary artery and a reduction of the carotid artery blockage to 40-60 percent. The actual tests, as opposed to the physicians' reports of their results, were not offered as evidence. The weight of the evidence established that the reported improvement in Mr. Fahle's carotid artery blockage, from a 60-80 percent blockage to a 40-60 percent blockage, could be attributed to the subjectivity involved in reading the results of the diagnostic tests. In any event, the reported improvement was of little medical significance. Chelation therapy is generally accepted in the medical community as a safe and efficacious treatment for heavy metal toxicity, e.g., lead poisoning. The United States Food and Drug Administration ("FDA") approved EDTA as a lawfully marketed drug in 1953. The FDA cannot limit the manner in which a licensed physician may prescribe an approved drug, though it can place limits on the marketing representations that may be made as to the efficaciousness of a drug for certain uses. The FDA has approved the marketing of EDTA as a treatment for heavy metal poisoning. The FDA prohibits any person from representing that chelation therapy is a safe and efficacious treatment for arteriosclerosis, though a physician may lawfully treat arteriosclerosis with chelation therapy. Petitioner submitted several articles attesting to the value of chelation therapy in treating arteriosclerosis. A significant minority of physicians in the United States employs chelation therapy as an option in the treatment of arteriosclerosis. However, reliable, formal clinical trials have yet to establish the efficacy of chelation therapy as a standard treatment for arteriosclerosis. The strength of the anecdotal evidence and the persistent advocacy of physicians have led the National Institute of Health to begin clinical trials on the use of chelation therapy in the treatment of arteriosclerosis, but the results of these trials will not be available for five years. In any event, Mr. Fahle's coverage is determined by the terms of Ms. Fahle's insurance policy. The terms of coverage for the state group health insurance plan are set forth in a document titled, "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document." The benefit document states, in pertinent part: Services Not Covered By The Plan The following services and supplies are excluded from coverage under this health insurance plan unless a specific exception is noted. Exceptions may be subject to certain coverage limitations. * * * 47. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The benefit document defines "experimental or investigational services" as follows: ny evaluation, treatment, therapy or device that: cannot be lawfully marketed without approval of the US Food and Drug Administration or the Florida Department of Health if approval for marketing has not been given at the time the service has been provided to the covered person is the subject of ongoing Phase I or II clinical investigation, or the experimental or research arm of Phase III clinical investigation-- or is under study to determine the maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the US, Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or similar condition BCBSF and [the Department] determine whether a service or supply is experimental or investigational. The benefit document is not explicit as to whether the elements of the quoted definition are to be considered in the disjunctive, but the plain sense of the document leads to the reading that if any one of the definitional elements applies, then the service or supply must be considered experimental or investigational. Dr. William Wood, BCBSF's medical director, confirmed that if any single element of the definition applies to a service or supply, then it is considered experimental or investigational. Chelation therapy would fall under every element of the definition except, arguably, the last element dealing with regular use by practicing physicians. The FDA does not allow chelation therapy to be marketed as a treatment for arteriosclerosis, chelation therapy is currently the subject of clinical trials, and it is not accepted "in consensus" by practicing physicians as a treatment for arteriosclerosis.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Management Services enter a Final Order dismissing the petition of Marianne Fahle. DONE AND ENTERED this 2nd day of December, 2002, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON 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 2nd day of December, 2002. COPIES FURNISHED: Marianne Fahle 12205 North Marjory Avenue Tampa, Florida 33612 Julia Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 John Matthews, Director Division of State Group Insurance Department of Management Services 4040 Esplanade Way, Suite 135 Tallahassee, Florida 32399-0950 Simone Marstiller, General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
The Issue The issues are whether Respondent committed the acts and omissions alleged in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all material times, Respondent has been licensed in Florida as a life, life and health, general lines--property and casualty, and health agent. His license number is A081006. Respondent was initially licensed on July 24, 1978. He was licensed as a health insurance agent in May 2000. At no time has Local 16, United States Workers of America Local 16 National Health Fund, IIAWU National Health Fund, or Local 16 National Health ever been licensed or authorized to do business in Florida as a life and health insurance company or reinsurance company. All references in this Recommended Order to "Local 16" include all of these entities. Patricia Holdridge is the owner of Patty Contracting Corporation, doing business as East Coast Electric and Mr. Electric (East Coast Electric) in Sebastian, Florida. She has owned East Coast Electric for 11 years. In May 2000, Ms. Holdridge served as the manager of East Coast Electric. In that capacity, she met with Respondent, who was an agent employed by Stuart Insurance, Inc., in Palm City, Florida. Respondent visited Ms. Holdridge's office and dropped off literature on group health insurance. Ms. Holdridge spoke with Respondent about her company's insurance needs. At the time, the company had temporary health insurance, following the insolvency of the prior health insurer. Respondent said that he could provide health insurance for the company's ten or eleven employees. After agreeing to the details of the new health insurance, Ms. Holdridge met with Respondent another time to sign the papers. At this time, she learned that a labor union was somehow involved. She told Respondent that there was no way that a labor union could be involved because her company could not afford to pay union wages to its employees. Respondent assured Ms. Holdridge that the union's participation in the health insurance was a "technicality." He told her that the union would never contact her or interfere with her business. Ms. Holdridge accepted this explanation, emphasizing again that no union could be involved with her company. The paperwork that Respondent produced for Ms. Holdridge to complete included an application for health insurance. One form was a Member Enrollment Application with the Local 16 National Health Fund in Newton, New Jersey. The application is for health insurance and asks basic questions concerning the insureds' medical and claims history. Another form in the package that Respondent gave Ms. Holdridge was a Membership Application with "USWA, Local 16, TCIU, AFL-CIO, CLC," also in Newton, New Jersey. Another form in the package was an "Application and Representatvie [sic] Authorization [for] Affiliated Business Trade Services," in Jacksonville. The materials that Respondent supplied Ms. Holdridge included descriptions of two plans, with differing co-payment amounts, with premiums set by the age groups containing the employee and his or her covered family members. The two plans were the "80/60" plan and the "90/70" plan. The Summary of Benefits for the 80/60 plan lists numerous covered types of services and assures 80 percent payment after deductible for listed providers and 60 percent payment after deductible for nonlisted providers. The Schedule of Benefits Summary for the 90/10 plan lists numerous covered types of services and assures 90 percent payment, purportedly without any copayment, for listed providers and 70 percent payment after deductible for nonlisted providers. A second Schedule of Benefits Summary for the 90/10 plan also bears the heading, "Local 16 National Health Fund." Respondent also provided Ms. Holdridge with insurance identification cards. The health insurance card is entitled, "USWA Local 16 TCU-AFL-CIOP, CLC National Health Fund." The dental insurance card is entitled, "Local 16 National Health Fund." After signing up for the insurance, East Coast Electric received invoices from Local 16. These invoices were broken down by employee and included entries for "welfare fund," "dues," and "ABTS." The amount entered for "welfare fund" is the premium for each employee's health insurance, based on the type of coverage and numbers and ages of dependents. The invoices directed East Coast Electric to pay this sum to Local 16, National Health Fund." The amount entered for "dues" is for union membership dues. The invoices directed East Coast Electric to pay this sum to Local 16, TCIU. The amount entered for ABTS is for the Affiliated Business Trade Services. The invoices directed East Coast to pay this sum to Affiliated Business Trade Services. The invoices directed East Coast Electric to send all of its payments to Affiliated Business Trade Services. At some point after signing up for the insurance, Respondent provided Ms. Holdridge with a Labor Agreement to sign. This detailed agreement provided that USWA Local 16 TCIU, AFL-CIO, CLC had been designated by a majority of the employer's employees to act as the exclusive bargaining agent. Ms. Holdridge refused to sign the agreement, and she heard nothing about her refusal to sign. East Coast Electric paid Local 16 a total of $32,000 from June 1, 2000, for group health insurance for its employees. Numerous employees of East Coast Electric signed up for the group health insurance offered by Local 16. Each of them signed forms indicating that he or she was joining the union, but none of them intended or wanted to join Local 16. Each employee understood that he or she was merely signing up for group health insurance. Allen Baurley was an electrician with East Coast Electric when the company purchased health insurance from Local After obtaining coverage with Local 16, Mr. Baurley suffered a sudden illness for which he submitted covered medical bills of over $34,000. Local 16 never paid any of these claims, in whole or in part. Mr. Baurley has paid $5000 of this debt through monthly payments and incurred $3500 in legal fees defending himself in a collection action brought by the hospital. Holly Emard was the office manager of East Coast Electric when the company purchased health insurance from Local 16. She signed up for group health insurance from Local 16. She incurred $300 in covered medical expenses, which Local 16 did not pay. Ms. Emard also handled communications between East Coast Electric and Local 16. As medical expenses went unpaid, she would contact Respondent, who offered to relay medical bills to Local 16. Sometimes, when she followed up, Respondent would claim not to have received the bill, and sometimes he would say that the union would be cutting checks later in the month. One time, Respondent suggested that Ms. Emard send an unpaid bill to a specified person with Local 16. Respondent was always very nice to Ms. Emard, but he did not help much with the payment problems. Eventually, Ms. Emard was spending half of her day on health insurance matters. Maurice Gay, Jr., was a scheduler and estimator with East Coast Electric when the company purchased health insurance from Local 16. Of the $1700 of covered medical expenses that he submitted to Local 16, the union health fund paid only $12. Mr. Gay's then-wife had a serious, lifetime pre-existing condition that had been covered by other health insurance. Induced by Respondent's representations of coverage from Local 16, she dropped her other insurance and enrolled with Local 16. When she tried to obtain health insurance elsewhere, after her adverse experience with Local 16, she found that insurers treated her situation as a lapse in coverage, so she incurred over $4000 in uncovered medical expenses--resulting in monthly payments to her health care providers and referrals to collection agencies. Catherine Desmarais was the only witness who was victimized by the sale of Local 16 group health insurance, but was not an employee of East Coast Electric. Ms. Desmarais was an accountant employed by Beacon Accounting Services, Inc., in Palm City, Florida, when the company purchased health insurance from Local 16. Ms. Desmarais testified that she never met Respondent. She signed up for group health insurance from Local 16 for herself, her husband, and two of her children sometime in 2000. Her supervisor at work informed her that she had to join Local 16, and Ms. Desmarais did so, although there was no union, shop steward, or other evidence of union activities at Beacon Accounting after she enrolled. Beacon Accounting employees joked at times, saying a supervisor could not do something, or else they would call the union. Ms. Desmarais' first attempt to use the Local 16 health insurance was when she tried, unsuccessfully, to fill a prescription. When the pharmacy refused to honor her insurance card, Ms. Desmarais told her supervisor, who suggested that she speak with Respondent. Ms. Desmarais telephoned Respondent, who said that someone else had had a similar problem and that he had already called someone in New Jersey and had corrected the problem. However, Ms. Desmarais eventually incurred about $3500 in covered medical expenses, for which Local 16 paid nothing. Later, in November 1991, after learning that Local 16 had filed for bankruptcy, Ms. Desmarais contacted Respondent, who informed her and her employer of another self-insured plan. However, Beacon Accounting elected to purchase group health insurance elsewhere. On November 15, 2002, a general adjuster for Fireman's Fund Insurance Company wrote Ms. Desmarais a letter in connection with its insured, Stuart Insurance. The letter attempts to initiate a process to conclude outstanding claims that arose when Local 16 became insolvent. The letter explains that its author was having difficulty linking Ms. Desmarais to a Local 16 group health policy. However, Ms. Desmarais produced at the hearing a copy of her Local 16 National Health Fund insurance identification card, which bears her name. Given the numerous administrative problems that East Coast Electric had with Local 16, the obvious explanation is that Local 16's poor recordkeeping resulted in the misplacing of Ms. Desmarais' insurance file. The employees of East Coast Electric never organized, never joined Local 16, never engaged in collective bargaining, and never negotiated the subject plan pursuant to any collective bargaining or union membership. At all material times, Respondent was aware of all of these facts, as he fraudulently required the employees of East Coast Electric to falsely indicate that they were or were applying to become members of Local 16. As marketed to persons who were not members or participants of Local 16, the subject plan was not an "employee benefit plan," as that term is described below. The subject plan was never an insured plan, as described below. If it had qualified as an "employee benefit plan," the subject plan would have been a "multiple employer welfare arrangement," as described below. United States Workers of America Local 16 National Health Fund filed for protection under Chapter 7 of the Bankruptcy Code the United States Bankruptcy Court, District of New Jersey (Newark Division), Case No. 01-42881, on November 27, 2001. The case is still pending.
Recommendation It is RECOMMENDED that the Department of Financial Services enter a final order revoking Respondent's license. DONE AND ENTERED this 30th day of December, 2003, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 December, 2003. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 David J. Busch Philip M. Payne Department of Financial Services and Chief Financial Officer Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Edward Michael Farley Post Office Box 1696 Palm City, Florida 34991
The Issue Whether the Petitioner is required to reimburse the Respondent for prescription drugs acquired by the Petitioner through the Prescription Drug Program of the State of Florida Employees Group Health Self Insurance Plan?
Findings Of Fact The Petitioner was an employee of the State of Florida during the latter part of 1985 and during 1986. His employment with the State began January 27, 1984. Prior to December 1, 1985, the Petitioner participated in the State of Florida Employees Group Health Self Insurance Plan (hereinafter referred to as the "State Plan"). On October 31, 1985, the Petitioner signed a Change of Information form electing to terminate his participation in the State Plan and to begin participation in a Health Maintenance Organization (hereinafter referred to as an "HMO"). The HMO the Petitioner selected was the Capital Health Plan. The title of the form the Petitioner signed on October 31, 1985, contained the following: STATE OF FLORIDA EMPLOYEES GROUP HEALTH SELF INSURANCE PLAN CHANGE OF INFORMATION FOR USE ONLY BY A CURRENT EMPLOYEE OF THIS PLAN [Emphasis added]. Above the Petitioner's signature was the following "employee authorization": I hereby request the above changes in my coverage and/or insurance information in the State of Florida Employees Group Health Self Insurance Plan....[Emphasis added] Prior to terminating his coverage under the State Plan, the Petitioner was given a brochure titled "A Comparison of Health Benefit Plans Offered to Employees of the State of Florida" (hereinafter referred to as the "Comparison Brochure"). The brochure was for employees working in North Florida. The Comparison Brochure indicates there are two general types of health insurance plans available to state employees: HMO Benefit Plans and the State Plan. The Comparison Brochure also indicates there are four HMO Benefit Plans available. Capital Health Plan, the plan the Petitioner elected on October 31, 1985, is one of the clearly designated HMO Benefit Plans listed in the Comparison Brochure. The Comparison Brochure provides the following with regard to prescription drugs for Capital Health Plan participants: "$3.00 co-payment at CHP pharmacy." The Comparison Brochure provides the following with regard to prescription drugs for State Plan participants: "PPC provider not available at this time" if a preferred provider is used and "20 percent co-payment (7)" when a non-preferred provider is used. The reference to "(7)" is a footnote which provides: "Prescription Drug Plan will be implemented by 1-1-86, paying 100 percent after nominal dispensing fee." The Comparison Brochure contains the following other pertinent information: Along with the conventional group health self insurance plan administered by Blue Cross/Blue Shield, the State of Florida offers its employees the opportunity to enroll in a different health care arrangement. This arrangement, called a Health Maintenance Organization (HMO), is available to eligible employees who live within a specific geographic area surrounding the HMO. The Comparison Brochure contains other information that indicates that the State Plan and the Capital Health Plan HMO are completely different types or methods of obtaining health insurance coverage available to state employees. Based upon the information contained in the Comparison Brochure, which the Petitioner indicated he read, the Petitioner should have known that he was entitled to health insurance benefits under the Capital Health Plan HMO as of December 1, 1985, and that he was not entitled to any health insurance benefits under the State Plan. Sometime after December 20, 1985, the Petitioner received a letter from the Department of Administration which provided in pertinent part: Dear Participant: We are pleased to announce the new Prescription Drug Program. Effective January 1, 1986, coverage for prescription drugs under the State Employees Group Health Self Insurance Plan is provided through a prescription drug program serviced by Paid Prescriptions and National Rx Services, Inc. This program is specifically designed to save you money when you use a Preferred Provider Organization (PPO) Pharmacy and Mail Service for your prescription drugs. [Emphasis added]. Included with the letter of December 20, 1985, was a "PLASTIC CARD to use at PPO and participating pharmacies" and a "brochure which gives you instruction on using the Program and a detachable patient profile for Mail Service." The prescription drug card the Petitioner received had "State of Florida Employees Group Health Self insurance Plan" printed on it. It did not contain any reference to Capital Health Plan or any other HMO. The brochure included with the letter of December 20, 1985, which the Petitioner received had "State of Florida Employees Group Health Self insurance Plan" printed at the top of the front cover of the brochure and elsewhere in the brochure. It did not contain any reference to Capital Health Plan or any other HMO. The brochure included with the letter of December 20, 1985, provided the following pertinent information: Coverage for prescription drugs under the State Employees' Group Health Self Insurance Plan is provided through the Prescription Drug Program.... A toll-free telephone number was provided on the prescription drug card and the brochure which the Petitioner was instructed could be used if he had any questions. The prescription drug card sent to the Petitioner was sent to all state employees participating in the "State Employees Group Health Self Insurance Plan." It was not for use by state employees participating in the Capital Health Plan or other HMO's. The card was erroneously sent to the Petitioner by the Respondent. Because the Petitioner had terminated his coverage under the State Plan and elected to participate in an HMO effective December 1, 1985, he was not entitled to use the prescription drug card which he received from the Respondent. In order for the Respondent to have the prescription drug cards ready to be mailed to participants in the State Plan before January 1, 1986, the Respondent used information concerning participants prior to December 1, 1985. Evidently no effort was made by the Respondent to insure that participants who left the State Plan during the end of 1985 did not receive a prescription drug card. The Respondent did send a memorandum dated December 20, 1985, to Personnel Officers and Insurance Coordinators requesting that they attempt to retrieve prescription drug cards from employees who terminated their participation in the State Plan after November 1, 1985. No one retrieved the Petitioner's card. After receiving his card, the Petitioner spoke to the business manager of the County Public Health Unit where the Petitioner worked for the Department of Health and Rehabilitative Services. The Petitioner asked the business manager whether he could use the card and was told that he did not know but would find out. The business manager later told the Petitioner that he had talked to the district personnel office and been told that the Petitioner could use the card. On February 26, 1986, and February 27, 1986, the Petitioner used the prescription drug card to purchase prescription drugs in south Florida. The Petitioner talked with a physician at Capital Health Plan by telephone before purchasing the medications and was authorized to receive treatment by other than a Capital Health Plan physician. The State was billed $5.82 for the medications purchased with the card on February 21, 1986 and February 26, 1986. On March 1, 1986, the Petitioner again used the card to purchase medications. The card was used in Tallahassee, Florida. The State was billed $63.95 ($55.43 and $8.52) for the medications purchased with the card on March 1, 1986. The Petitioner did not use the card on any other occasion. The Petitioner testified that he did not use the card because he discovered that it was less costly to acquire the medications he needed from Capital Health Plan. Based upon the evidence presented at the hearing, however, the cost to the Petitioner was the same whether he used the plastic card or Capital Health Plan's pharmacy: $3.00. On or about March 27, 1986 and April 10, 1986, the Petitioner was informed that he had used the card to obtain medications for which use of the card was not authorized. The Petitioner was requested to return the card and to repay the amount incurred for the medications. The Petitioner did not respond to these requests. On August 26, 1986, the Petitioner was sent a letter requesting that he repay the cost of the medications he had acquired with the card. Although the Petitioner was requested to remit $77.02, the evidence only proved that $69.77 of medication was paid for by the State. On August 28, 1986, the Petitioner returned the prescription drug card he had been given to Andrew Lewis, an employee of the Respondent. The Petitioner has not reimbursed the State for the cost of the medication he received. The $69.77 of medications paid for by the Respondent which the Petitioner acquired with the prescription drug card provided to him by the Respondent represents a payment on behalf of the Petitioner which he was not entitled to. The card was for use by state employees participating in the State Plan. As of December 1, 1985, the Petitioner was not a participant in this plan. When considered together, the information provided to the Petitioner should have put the Petitioner on notice as to the type of medical insurance coverage he was generally entitled to receive. In particular, the Petitioner should have known that he was eligible for coverage under the Capital Health Plan, an HMO, and that he was not entitled to coverage under the State Plan as of December 1, 1985. The Petitioner also should have known that the prescription drug card he received was for use of participants by the State Plan only and not participants of the Capital Health Plan. The Petitioner's reliance on the statements of the business manager of the County Public Health Unit where he worked was not reasonable in light of the other information which he had been provided about his coverage and the purpose of the prescription drug card he was sent. The Petitioner is not able to repay the $69.77 owed to the State in a lump sum. The Petitioner can only pay the $69.77 to the Respondent in monthly installments of $10.00 or less.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that the Petitioner pay $69.77 to the Respondent for prescription drugs received by the Petitioner. DONE AND RECOMMENDED this 26th day of February, 1987, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-4111 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they were accepted. Those proposed findings of fact which have been rejected and the reasons for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ." The Petitioner's Proposed Findings of Fact: Proposed Finding RO Number of Acceptance of Fact Number or Reason for Rejection 1 Although the Petitioner did not inten- ionally use the prescription card despite being informed that he was not entitled to it, he should have known that he was not entitled to use it. 2 RO 31. 3 RO 21. 4 Not supported by the weight of the evidence. In light of the information provided to the Petitioner concerning the differences between the State Plan and an HMO, the Petitioner did not use due care to determine if the card was a part of the benefits he was entitled to receive as a participant in an HMO. 5 RO 25. 6 Not supported by the weight of the evidence. Ms. Walker testified that the coverage available to state employees is not confusing. The Respondent's Proposed Findings of Fact: 1. RO 1. 2. RO 2. 3. RO 3-4 and 13-14. 4. RO 15, 18, 21 and 24. 5. RO 21 and 26. 6. RO 27. 7. RO 10. 8. RO 29. 9. RO 30. 10. RO 31. 11. COPIES FURNISHED: RO 36. Gilda Lambert, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens General Counsel Department of Administration 530 Carlton Building Tallahassee, Florida 32399-1500 S. Philip Ford Post Office Box 20232 Tallahassee, Florida 32316
Findings Of Fact Petitioner was employed with the Collier County Health Department, Department of Health and Rehabilitative Services, on March 9, 1973. Petitioner's date of birth is November 26, 1916. On October 1, 1980, Petitioner's medical insurance coverage was entered into the payroll system under the Spouse Program, State of Florida plan. The proper amount of premiums under the Spouse Program were paid to Blue Cross Blue Shield from October 1, 1980, up to and including June, 1983. On November 26, 1981, Petitioner reached the age of 65. Under the State plan, coverage at age 65 is automatically reduced and changed to Medicare Supplement Coverage. In order to have remained fully covered, Petitioner would have had to apply for the Medicare insurance prior to reaching age 65, which he did not do. Due to both spouses being covered, there was no change in policy premium deductions even after Petitioner reached age 65 and his State coverage was reduced. The Blue Cross Blue Shield (State program) paid several claims of Petitioner subsequent to his 65th birthday and through December, 1982. On March 8, 1983, Petitioner was admitted to the hospital and on March 11, 1983, heart bypass surgery was performed. Respondent normally notifies the employee and employing agency of the coverage change prior to the employee's 65th birthday, as required by Rule 22K- 1.16, F.A.C. In this case, Respondent did not do so due to a failure in its computer program. Petitioner could have determined that he was required to apply for Medicare coverage had he read in detail a copy of the plan's benefit booklet furnished to all State employees in 1978.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent direct its insurer to pay Petitioner's claims arising from his March, 1983, hospitalization. DONE and ENTERED this 2nd day of September, 1983, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1983. COPIES FURNISHED: Mr. John H. Adams 2596 Linwood Avenue Naples, Florida 33962 Daniel C. Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Nevin G. Smith, Secretary Department of Administration Carlton Building Tallahassee, Florida 32301
Findings Of Fact Respondent administers the State of Florida Employees' Group Health Self Insurance Plan as a self insurance plan pursuant to Section 110.123(5), Florida Statutes. Prior to October 1 1981, Petitioner was an employee of the Department of Natural Resources. For some period of time, Petitioner purchased coverage under that health insurance plan. When she married an employee of the federal postal service, she dropped her health insurance with the State of Florida, since she preferred health insurance coverage under her husband's Policy with the federal government. Petitioner's employment with the Department of Natural Resources was reclassified so that she became a member of the Senior Management Service during September or October 1981. One of the benefits available to Senior Management Service employees is coverage under the State of Florida Employees' Group Health Self Insurance Plan free of charge to the employee. In the case of a Senior Management Service employee who accepts coverage under that Plan, the employing agency pays the full premium cost for the employee. On September 18, 1981, Ginger Bailey, an employee in the personnel office of the Department of Natural Resources, typed in the required information on insurance application forms for the various insurance policies available to Petitioner when her Senior Management status became effective on October 1, 1981. Bailey took the application forms to Petitioner, who was too busy at the time to discuss with Bailey the different insurance policies available and the forms themselves. Bailey left the forms with Petitioner. On October 8, 1981, Petitioner went to the personnel office so that Bailey could review with her the insurance benefits available to Senior Management status employees. Bailey explained each available insurance policy to the Petitioner individually and, for each, offered Petitioner an application form already completed by her. Petitioner accepted the offer of State-paid life insurance and disability insurance by signing the application form for such insurance in the acceptance block. When Bailey explained to Petitioner the health insurance, Petitioner commented that she would not need the insurance because her husband's policy was so good. Accordingly, Bailey directed Petitioner's attention to the portion of the application marked in bold letters, "Refusal." Petitioner signed the refusal portion of the application and dated her signature. Bailey struck through the September 18, 1981, date she had previously filled in for Petitioner in the acceptance section of the application. At no time did Bailey or any other agent or employee of the Department of Natural Resources or of the Department of Administration represent or state to Petitioner that she was covered by or was a member of the State of Florida Employees' Group Health Self Insurance Plan. In June 1982, Petitioner obtained a copy of the State of Florida Employees' Group Health Self Insurance Booklet containing an explanation of benefits effective July 1, 1982. On a sheet of paper, Petitioner typed the name of the Plan, the name and address of the administrator of the Plan, the group number, and the policy number. She taped this slip of paper to the front of the Booklet. During the month of June 1982, Petitioner's husband's 20-year-old daughter was admitted to a hospital. Petitioner showed hospital employees the health insurance explanation Booklet with the information she had placed on the front of it, since she could not "find" her insurance card, and the hospital accepted Petitioner's representations as proof of insurance. Coverage for Petitioner's stepdaughter was no longer available on Petitioner's husband's insurance policy, since she was over 19 years of age. Petitioner submitted a claim form to Blue Cross and Blue Shield of Florida, Inc., the administrator of the State of Florida Employees' Group Health Self Insurance Plan. The claim submitted by Petitioner to the Plan was rejected for lack of coverage. No evidence was presented as to whether a Senior Management Service employee's family members receive free coverage under the State's health insurance plan, and no evidence was presented as to whether Petitioner had any legal or financial responsibility for her adult stepdaughter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's request that she be deemed covered by the State of Florida Employees' Group Health Self Insurance Plan from and after October 1, 1981, without prejudice to the Petitioner's right to apply, if she desires, for prospective coverage under the Plan in accordance with the Plan's requirements, rules and regulations. DONE and RECOMMENDED this 25th day of April, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of April, 1983. COPIES FURNISHED: Ms. Mary L. Davis Post Office Box 753 Havana, Florida 32333 Kevin X. Crowley, Esquire Department of Natural Resources Douglas Building, Suite 1003 3900 Commonwealth Boulevard Tallahassee, Florida 32303 Daniel C. Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Nevin G. Smith, Secretary Department of Administration 530 Carlton Building Tallahassee, Florida 32301
The Issue The issue in this case is whether Respondent properly rejected Petitioner's insurance Policy Form No. SL-94.
Findings Of Fact Petitioner submitted Policy Form No. SL-94 (hereinafter referred to as "the Policy") to Respondent for approval as a stop loss policy pursuant to Section 627.410, Florida Statutes, on or about August 15, 1995. The Policy, standing alone, meets all applicable requirements for approval as a stop loss policy under Section 627.410, Florida Statutes. The Policy obligates Petitioner to pay benefits to an employer, or the trust established by or for the employer, which employer is responsible for the payment of benefits to its employees or their dependents under a self-funded employee welfare benefit plan (hereinafter referred to as "the Plan") qualified under the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Policy purports to provide insurance only to the employer. On its face, the Policy does not assume any of the employer's obligations under the Plan to provide insurance directly to the employer's employees. Under the Policy, Petitioner is obligated to reimburse the employer only after the employer pays a limited amount of benefits under the Plan to any person who is covered under the Plan, i.e. employees or their dependents. The amount of Plan benefits that an employer must pay before Petitioner is obligated to begin reimbursement is determined by specific and aggregate attachment points or deductibles as defined in the Policy's Schedule of Insurance. The specific attachment point is the Plan benefit amount which is wholly retained by the employer for all claims incurred by each covered person during each contract year. The Plan benefit amount does not include deductibles, coinsurance amounts or any other expense or claims which are not reimbursable under the terms of the Plan nor does it include expenses which are reimbursable from any other source. The aggregate attachment point or deductible is the Plan benefit amount which is wholly retained by the employer for all covered persons during a contract year. The Policy's Schedule of Insurance does not specify what the specific and aggregate attachment points will be. However, record evidence indicates that Petitioner intends to market the policy with a specific attachment point as low as $500. Therefore, if the Plan has a deductible of $250 and the Policy has a specific attachment point of $500, the employee would pay the first $250 of eligible expenses, the employer would pay the next $500 of eligible expenses, and Petitioner would reimburse the employer for 100 percent of any excess eligible expenses, for each covered person during a contract year. The Policy's eligible expenses are the covered charges or expenses which are incurred by a covered person while covered under the Plan in the course of treatment for an injury or illness and paid under the Plan subject to the terms, conditions and limitations of the Plan document. In other words, the eligible expenses under the Policy will mirror the eligible expenses of the Plan. Record evidence indicates that Petitioner intends to market the Policy to employers with less than fifty (50) employees. The Policy does not contain provisions related to the following protections: guaranteed availability for any small group employer regardless of whether its employees are sick or have preexisting conditions; guaranteed renewability unless the policyholder fails to pay the premium or commits fraud; limitations on exclusions for pre- existing conditions; portability which allows employees to move from one employer to another regard- less of preexisting conditions; community rated premiums; and, periods of open enrollment. ERISA self-funded benefit plans are not regulated by the state regardless of their terms and conditions. They are not required to include the above referenced protections. If the Plan excludes specific health risks or preexisting conditions such as AIDS, emphysema, heart disease, or cancer, neither the employer nor the Petitioner would be obligated to pay benefits for those risks. Additionally, the Plan is subject to whatever deductible limits the small employer wishes to set. Respondent disapproved the Policy by letter dated August 21, 1995. Respondent correctly rejected the Policy as being inappropriate for the small group health insurance market. The Policy is inappropriate because Petitioner intends to market it to self-insured small group employers with attachment points so low ($500) that it becomes a de facto health insurance policy instead of a stop loss policy. Respondent would not approve a stop loss policy for a small group employer's Plan with specific attachment points at $5,000 or less. Respondent would approve a stop loss policy for a small group employer's Plan with specific attachment points as low as $9,000 or $10,000, regardless of the terms and conditions of that Plan. In that instance, the employer assumes significant risk of loss as a self-funded insurer and the stop loss policy operates to limit that loss. However, an ERISA benefit plan combined with a stop loss policy having specific attachment points as low as $500, such as the one at issue here, substantially limits the self-insured employer's risk of loss to a nominal amount and substitutes Petitioner as a small group health insurer with none of the protections required by Section 627.6699, Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore recommended that Respondent enter a Final Order disapproving Petitioner's Policy Form No. SL-94, for use in Florida's small group health insurance market. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of March, 1996. SUZANNE F. HOOD, Hearing Officer 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 15th day of March, 1996. APPENDIX The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Petitioner's Proposed Findings of Fact Accepted in Findings of Fact 3. Accepted in substance as restated in Findings of Fact 4. Accepted in substance as restated in Findings of Fact 4. Accepted in substance as restated in Findings of Fact 4. Accepted in Findings of Fact 5-7. Accepted as restated in Findings of Fact 4. Not a finding of fact. More like a conclusion of law. Reject the first sentence as contrary to more persuasive evidence. Second sentence accepted as restated in Conclusions of Law 19-21 and 26-27. Rejected. It is a question of fact whether the Policy is a stop loss policy or a health insurance policy regardless of its denomination. Specifically reject Petitioner's finding that the Policy does not violate public policy as expressed in Section 627.6699, Florida Statutes. See Conclusions of Law 24-27. Accepted in Conclusion of Law 23. Accepted in part as restated in Findings of Fact 15-16. See also Conclusions of Law 22, 24-27. Not a finding of fact. More like a conclusion of law and legal argument which is not persuasive as applied to the facts of this case. Not a finding of fact. More like a conclusion of law. Not a finding of fact. More like a conclusion of law. First sentence rejected as contrary to more persuasive evidence. Next five sentences are not findings of fact. Specifically reject any implication that the Policy is a stop loss policy. See Findings of Fact 15-16 and Conclusions of Law 24-27. First two sentences are not findings of fact. Reject any implication that there is no public policy "relating to the issuance of a stop loss policy in the State of Florida to a Florida employer employing 50 or fewer employees." Accept that the state does not regulate employer self-funded medical benefit programs. See Finding of Fact 12. Accept the last sentence as restated in Finding of Fact 15 and Conclusion of Law 24. Rejected. Petitioner's Exhibit 3 shows the legislature was aware that "the bill could increase the likelihood that an employer would choose to self- insure and due to ERISA would be able to avoid state regulation of the insurance product provided to employees." However, the referenced exhibit is rejected as evidence of legislative intent to exclude "related insurance products" from "the statute's regulatory or public policy purview." Rejected for the reasons set forth in the ruling above. Rejected. See Conclusions of Law 24. Substance accepted as restated in Findings of Facts 12 and Conclusions of Law 24. Substance accepted as restated in Findings of Facts 16. First sentence not a finding of fact. Second sentence rejected as contrary to more persuasive evidence; See Findings of Fact 15-16 and Conclusions of Law 24-27. Accept in part as restated in Findings of Fact 15-16 and Conclusions of Law 24-27. A recitation of the testimony is not a finding of fact; substance accepted as restated in Finding of Fact 16. Accept that the state has no specific statutes or rules regulating attachment points in stop loss insurance policies. See Conclusions of Law 19. However, Section 627.6699(2), Florida Statutes, is applicable here because the Policy is a de facto health insurance policy. See Findings of Fact 15-16 and Conclusions of Law 24-27. First sentence rejected as contrary to more persuasive evidence. See Findings of Fact 15-16 and Conclusions of Law 19. First sentence rejected; More like a conclusion of law or legal argument the substance of which is not persuasive. Second sentence irrelevant. Irrelevant. Accepted but subordinate to Findings of Fact 15-16. NAIC's stop loss model act supports the proposition that the Policy is not a stop loss insurance policy but rather a health insurance policy. Accepted in part as restated in Conclusions of Law 19. Accepted but subordinate to Findings of Fact 15-16. Accepted but subordinate to Findings of Fact 15-16. Irrelevant. Rejected as contrary to more persuasive evidence. Respondent's Proposed Findings of Fact Accepted in Findings of Fact 1. Accepted in Findings of Fact 15. Not a finding of fact. Not a finding of fact. More like a conclusion of law. Accepted in Findings of Fact 1. Accepted as restated in Findings of Fact 2. Accepted as restated in Findings of Fact 11, 15-16. Accepted as restated in Findings of Fact 10, 15-16, and Conclusions of Law 22, 24-27. Accepted as restated in Findings of Fact 4. Accepted as restated in Findings of Fact 4-8 and 10. Accepted in Findings of Fact 10 and Conclusions of Law 22. Accept that the Policy provides for a specific attachment point of not less than $500; See Findings of Fact 8, 15 and 16. There is no evidence that the Policy's specific attachment point can be no more than $1,000. Accepted as restated in Findings of Fact 5-8. Accepted as restated in Findings of Fact 8. Accepted as restated in Conclusions of Law 22. Accepted as restated in Findings of Fact 9, 11-13 and Conclusions of Law 22, 24-27. Accepted as restated in Findings of Fact 9-13. Accepted as restated in Findings of Fact 11. Accepted in part in Findings of Fact 14. Reject that Petitioner could totally avoid the coverage responsibilities otherwise imposed by Section 627.6699, Florida Statutes, merely by setting the Policy's attachment points at the same level as the deductible in the Plan. If the Plan's deductible was $500 and the Policy's specific attachment point was $500, the employee would pay the first $500 of expenses, the employer would be responsible for the next $500 of expenses, and Petitioner would reimburse the employer for 100 percent of any excess eligible expenses for that employee during the contract year. However, Petitioner can totally avoid paying for state mandated protections because the Policy will mirror any prohibited exclusions or provisions in the Plan. Substance accepted in part; See Findings of Fact 15-16. There is no evidence that the Policy's specific attachment point can be as high as $2,000. Accepted as restated in Findings of Fact 16; See Conclusions of Law 24-27. COPIES FURNISHED: Michael H. Davidson, Esquire Department of Insurance Division of Legal Services 200 E. Gaines Street Tallahassee, Florida 32399-0333 Frank J. Santry, Esquire Granger, Santry, et al. Post Office Box 14129 Tallahassee, Florida 32308 Bill Nelson, State Treasurer Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, Esquire Department of Insurance and Treasurer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue The issue is whether the Petitioner, Amjad Shamim, is eligible for continuation coverage of health insurance and reimbursement, under the State of Florida Employees Group Insurance Plan, for medical care expenses he incurred after he left state employment.
Findings Of Fact Mr. Shamim became a full-time employee of the Department of Health and Rehabilitative Services (HRS) in September, 1986, and worked at the Palm Beach County Health Department. Effective August 1, 1987, Mr. Shamim was insured with family coverage under the State of Florida, Employee Group Health Insurance Program. His enrollment continued until his insurance termination effective date of January 1, 1989. On November 15, 1988, Mr. Shamim met with Martina L. Walker, Personnel Technician I for HRS at the Palm Beach County Health Department, in connection with his decision to leave the Department's employ on November 18, 1988. At that meeting he executed the documents required by HRS to discontinue his health insurance coverage. As part of that November 15, 1988, conference, Martina Walker informed Mr. Shamim of his rights to continued health insurance coverage after his termination of employment. Mr. Shamim advised Ms. Walker that he no longer needed the State coverage because his new employer offered a health insurance plan to its employees. Ms. Walker, nonetheless, cautioned Mr. Shamim that any pre-existing conditions are usually not covered by new employer policies. Ms. Walker's notification of Mr. Shamim's right to continued health insurance coverage for up to 18 months was not in writing. Mrs. Walker never told Mr. Shamim orally the specifics of continuation coverage, i.e., that he had 60 days to elect continuation coverage from the coverage effective date of January 1, 1989, that his application and premium were required to be postmarked by March 1, 1989; or that he could continue his family coverage for 18 months at monthly premium of $273.01 per month. In addition to disclosures when an employee leaves, all employees of the Palm Beach County Health Department are advised of their opportunity to elect continuation coverage under the State Plan at the time of their employment, by means of a notice furnished by HRS. Mr. Shamim received a general notice of benefits, including the availability of post employment continuation coverage, at the time of his employment. The termination form completed by Ms. Walker was processed routinely, and caused the Division of State Employee Insurance to mail Mr. Shamim written notification by first class mail of the availability of continuation coverage in a letter dated December 1, 1988. Due to the appearance of the handwritten address on the notice mailed to Mr. Shamim, it is more likely than not that this notice failed to arrive at Mr. Shamim's home address. The portion of the address for the apartment number could be read as D201 or 2201, which would account for misdirection of the notice in the mail. Mr. Shamim's claim that he did not receive the notification is accepted. Had the notice been properly addressed and had he received it, Mr. Shamim would have had the opportunity to decide whether to exercise his legal right to continue his health insurance. On January 27, 1989, Mr. Shamim had surgery to his hand. He had been treated for that condition while he was employed with the Palm Beach County Health Department. Because it was deemed to be a pre-existing condition, the expense he incurred of almost $4,000 was not covered under the health insurance policy of his new employer. There is no evidence of the length of time the pre- existing condition exclusion in the policy offered by Mr. Shamim's new employer lasts. Mr. Shamim first notified HRS of his desire for post termination health insurance coverage on September 19, 1989. A second request was made on November 7, 1989. Finding no success with HRS, Mr. Shamim contacted the Respondent on December 29, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered accepting the request of Mr. Shamim for continuation coverage, accepting his premiums and processing his claim. DONE and ENTERED this 11th day of November, 1990, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. 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 11th day of November, 1990.
The Issue The ultimate issue in this case is whether Respondent's proposed Florida Administrative Code Rule 69O-149.022(3), which would incorporate by reference Form OIR-B2-2112, constitutes an invalid exercise of delegated legislative authority. Before that issue may be reached, however, it is necessary to determine whether Petitioners have standing to challenge the proposed rule.
Findings Of Fact The Financial Services Commission ("Commission") is a four-member collegial body consisting of the governor and cabinet. The Office of Insurance Regulation ("Office") is a structural unit of the Commission. Giving rise to this case, the Office initiated rulemaking and made recommendations to the Commission concerning an amendment to rule 69O-149.022, which would incorporate by reference Form OIR-B2-2112, titled "Consumer Notice [Regarding] The Impact of Federal Health Care Reform on Health Plan Costs" ("Form 2112"). Whenever the Commission or the Office engages in rulemaking, the members of the Commission serve as the agency head. The Commission thus has the ultimate responsibility for approving and adopting the proposed rule. CHAIN is a nonprofit corporation which operates solely within the state of Florida. CHAIN is subject to the oversight of a voluntary board of directors. As a health-care advocacy organization, CHAIN is exempt from taxation under section 501(c)(3) of the Internal Revenue Code and derives its income primarily from grants and contributions. CHAIN provides services to low- and moderate-income individuals who lack health insurance coverage or perceive their coverage to be unaffordable or inadequate. CHAIN provides health insurance purchased through Florida's small-group health insurance market to each of its five full-time employees. Greg Mellowe is a full-time employee of CHAIN who receives health insurance coverage through such employment. During the 2013 regular session, the Florida Legislature passed a bill, which the governor approved, enacting section 627.410(9), Florida Statutes. This section requires that insurers provide to policyholders of individual and small-group nongrandfathered plans a notice that describes the estimated impact of the federal Patient Protection and Affordable Care Act ("PPACA")——popularly and more commonly known as Obamacare——on monthly premiums.1/ An insurer that issues a nongrandfathered plan must give this notice one time——when the policy is issued or renewed on or after January 1, 2014——on a form established by rule of the Commission. (A "nongrandfathered" plan is a health insurance plan that must comply with all of Obamacare's requirements. For ease of reference, such plans will be referred to as "compliant plans.") Having been directed to act, the Office commenced rulemaking to establish the form of the notice to be sent to persons insured under compliant, individual and small-group plans, eventually proposing to adopt Form 2112. The Commission approved this form at a hearing on August 6, 2013. Form 2112 fills a single, one-sided page2/ and looks like this: CHAIN will receive the Obamacare notice when it renews its small-group health insurance plan, or purchases a new plan, on or after January 1, 2014.
