The Issue Whether the Department of Management Services properly denied medical insurance reimbursement to Petitioner, a covered dependent of a state employee insured by the State Employees' Preferred Provider Organization health plan, for Genotropin recombinant growth hormone prescribed for the treatment of long- term growth failure associated with idiopathic short stature.
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: The state group insurance program is a package of insurance plans offered to, among others, state employees and their dependents. § 110.123(2)(k), Fla. Stat.1/ Petitioner Arturo Puerto is insured as a dependent of a state employee, and is a participant in the state's group self- insured plan, known as the State Employees' Preferred Provider Organization health plan ("PPO plan" or "state plan"). The state plan includes a state employees' prescription drug program. § 110.12315, Fla. Stat. Pursuant to Section 110.123(3)(c), Florida Statutes, the Department is responsible for contract management and day- to-day management of the state employee health insurance program. Section 110.123(5)(c), Florida Statutes, authorizes the Department to contract with an insurance carrier or professional administrator to administer the state plan. The current contract provider of the state plan's pharmacy program is CareMark Inc. ("CareMark"). However, the Department makes all final decisions concerning the existence of coverage or covered benefits under the state plan. The Department's authority in this regard may not be delegated to a contract provider. § 110.123(5), Fla. Stat. Petitioner was born on February 12, 1992. On or about February 3, 2009, Petitioner's physician prescribed Genotropin, a recombinant growth hormone ("GH")2/ approved by the United States Food and Drug Administration ("FDA") as therapy for short stature, including idiopathic short stature ("ISS"). ISS is short stature that does not have a diagnostic explanation, in an otherwise healthy child. ISS is also called "non-GH-deficient short stature." The Group Health Insurance Plan Booklet and Benefits Document, effective January 1, 2007, as modified on January 1, 2009, includes the terms and conditions of participation in the PPO plan and the benefits provided by the PPO plan. The booklet and benefits document contains a section describing the prescription drug program. Participants in the PPO plan are automatically enrolled in the prescription drug program, which features a network of retail pharmacies and a mail order program. The participant makes a co-payment for covered prescriptions. The booklet and benefits document sets forth a list of drugs that are covered, and a list of drugs that are not covered under the prescription drug program. Under the heading "Important Information about the Prescription Drug Program," the document states the following concerning specialty medications:3/ 5. Certain medications, including most biotech drugs, are only available through Caremark Specialty Pharmacy Services. Generally, these drugs are for chronic or genetic disorders including, but not limited to, multiple sclerosis, growth deficiency and rheumatoid arthritis and may require special delivery options, (i.e. temperature control). Caremark Specialty Pharmacy provides 24/7 access and can be contacted at 1-800-237-2767. * * * 12. As part of the Caremark Specialty Services, Caremark will administer the Advanced Guideline Management program for the State Employees' PPO Plan. Advanced Guideline Management is intended to optimize outcomes and promote the safe, clinically appropriate and cost-effective use of specialty medications supported by evidence based medical guidelines. Failure to meet the criteria for Advanced Guideline Management during the respective use review will result in denial of medication coverage for the Plan participant and discontinuation of medication coverage for the Plan participant in the case of concurrent use review. The Advanced Guideline Management Program is a process by which authorization for a specialty medication is obtained based on the application of currently acceptable medical guidelines and consensus statements for appropriate use of the medication in a specific disease state. Therapies reviewed under the Specialty Guideline Management Program include, but are not limited to, the following: multiple sclerosis, oncology, allergic asthma, human growth hormone, hepatitis C, psoriasis, rheumatoid arthritis, and respiratory syncytial virus. Additional therapies may be added from time to time.... CareMark's current guideline covering Genotropin and similar GH medications is set forth in a 2008 CareMark document titled, "Specialty Pharmacy Program for Growth Hormone and Endocrine-Metabolic Disorders." The document contains flow charts describing the criteria employed by CareMark to determine coverage for specific conditions. Among the criteria set forth in the flow chart for prescribing GH to children with ISS is the following question: "Does pre-treatment growth velocity and height meet the AACE (American Association of Clinical Endocrinologists) criteria for short stature?" (See Appendix N). If the answer to the question is "no," then the criteria direct that coverage for the prescription of GH should be denied. Appendix N sets forth the following "AACE criteria for short stature": < -2.25 standard deviations below the mean for age and sex based on patient's growth rate, adult height prediction of less than 5'3" for boys and less than 4'11" for girls. Appendix N is based on the AACE's "Medical Guidelines for Clinical Practice for Growth Hormone Use in Adults and Children-- 2003 Update" and a December 2003 AACE Position Statement on growth hormone usage in short children.4/ The CareMark document is not explicit as to whether the quoted elements of the AACE criteria for short stature are to be considered in the disjunctive. However, the AACE Position Statement expressly states that GH use is indicated for ISS only for children whose height is "< - 2.25 standard deviations below the mean and have an adult height prediction of less than 5'3" for boys and less than 4'11" for girls." (Emphasis added.) The height standard deviation criterion used by CareMark to determine the appropriateness of Genotropin therapy as a treatment for ISS was shown to be consistent with FDA criteria and the specifications established by Pfizer, the manufacturer of Genotropin. The medical records submitted on behalf of Petitioner show that at the time Genotropin therapy was prescribed in February 2009, Petitioner's height was 162.5 cm (5'4"). This was 1.66 standard deviations below the mean for his age and sex. Untreated, his predicted final height was 164 cm (5'4 1/2"). At the time Genotropin therapy was prescribed, Petitioner did not meet the height standard deviation requirement. His height standard deviation was 1.66 standard deviations below the mean. The deviation required by the CareMark criteria was greater than 2.25 standard deviations below the mean. At the time Genotropin therapy was prescribed, Petitioner did not meet the adult height prediction requirement. Petitioner was already 5'4" tall and was projected to reach a height of 5'4 1/2" without treatment. The CareMark criteria required a projected adult height without treatment of 5'3" or below. The PPO plan denied payment for the Genotropin therapy because Petitioner did not meet criteria established by CareMark through its Specialty Pharmacy Program guidelines. The booklet and benefits document makes no provision for exceptions to strict conformity to the CareMark criteria. At the hearing, Petitioner's representative acknowledged that Petitioner does not meet the criteria for Genotropin therapy, but requested that the Department order such coverage as an exception to the criteria.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Management Services, Division of State Group Insurance enter a final order denying coverage for Petitioner's prescription for Genotropin therapy. DONE AND ENTERED this 10th day of March, 2010, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of March, 2010.
The Issue This is a proceeding under Section 408.7056, Florida Statutes, in which the basic issue is whether the Petitioner's denial of a request that it cover certain speech therapy treatments for an insured was appropriate or inappropriate. The Respondent contends that the subject speech therapy was covered under the subject plan, and should be provided to the insured.
Findings Of Fact The Petitioner, Neighborhood Health Plan, is a health maintenance organization which has been granted a certificate by the Respondent. In the fall of 1995, the Petitioner issued a policy of health insurance to a small business corporation owned by Mr. F. S. The policy covered Mr. F. S. and his dependents, including his wife and children. The family's membership in the Petitioner's plan began on or about October 1, 1995. The subject health insurance policy has been in effect without interruption since its inception. At all material times, F. S., Jr., the minor son of Mr. and Mrs. F. S., has been a covered dependent under the subject health insurance policy. In the normal course of events, when the Petitioner issues a new health insurance policy, it also delivers to the insurance business a Group Service Agreement and a Member Handbook. Mr. and Mrs. F. S. received a copy of the Member Handbook on or near the date on which the policy was issued. Mr. and Mrs. F. S. did not receive a copy of the Group Service Agreement until sometime in early 1998 after they had filed a grievance regarding coverage denial. Shortly after the inception of the health insurance policy, Mrs. F. S. took her children for an introductory meeting with the pediatrician who was their new primary care physician under the terms of the health insurance policy. That pediatrician referred F. S., Jr., to Dr. Carlos Gadia, a pediatric neurologist. Following a neurological evaluation of F. S., Jr., Dr. Gadia concluded that F. S., Jr., had the following medical problems: expressive language disorder, dyspraxia, and dysgraphia. Expressive language disorder is an impairment of the ability to communicate one's experiences, ideas, or feelings to others. Dyspraxia is an impairment of the ability to coordinate movement, or to perform coordinated acts. Dysgraphia is the impairment of the ability to perform the movements required for writing, such as holding and moving a pencil across paper. Dr. Gadia recommended an electroencephalogram and other specific follow-up testing. Dr. Gadia also concluded that F. S., Jr., ". . . should be started on physical and occupational therapy. He should also benefit from more intensive speech therapy. " Beginning on or about November 1, 1995, the Petitioner pre-authorized speech therapy and occupational therapy for F. S., Jr. The Petitioner required the treatment providers to submit treatment plans and progress reports every two months to justify the authorization of further treatment sessions. Using this procedure, the Petitioner continued to authorize speech therapy and occupational therapy for F. S., Jr., without interruption through the end of 1997. In the fall of 1997, the Petitioner's medical department concluded that it had been administering the benefits for speech therapy and some other forms of therapy more generously than was provided for in the Group Service Agreement. The Petitioner then began the process of reviewing the records of each patient who was receiving therapy, in order to determine whether the therapy being provided to each patient was covered by the provisions of the Group Service Agreement. During the course of such review, the Petitioner concluded that F. S., Jr., should not have received speech therapy benefits because his disability appeared to be "developmental" or congenital, rather than "acquired." In late 1997, F. S., Jr.'s, primary care physician requested authorization from the Petitioner for additional speech therapy services for F. S., Jr., to be provided in 1998. By letter dated January 8, 1998, the Petitioner advised the primary care physician that the request was denied. A copy of the letter was sent to Mr. and Mrs. F. S. The letter of January 8, 1998, stated, in pertinent part: You have requested the above referenced member to receive Speech Therapy. This request has been reviewed by a physician through the Medical Management Program and has been denied. The service requested does not meet medical criteria for coverage. Therefore this service cannot be authorized for payment. Mr. and Mrs. F. S. promptly initiated the grievance procedure provided for by the Petitioner. During the course of the grievance process, a representative of the Petitioner explained that the coverage for speech therapy had been denied because, in the opinion of the Petitioner's medical department, F. S., Jr.'s, need for speech therapy was occasioned by a learning disability or a developmental disability, and not by an "acquired disability." Representatives of the Petitioner also explained that they would provide coverage for the speech therapy, if it could be established that F. S., Jr., had an "acquired disability." Mrs. F. S. contacted Dr. Gadia, the neurologist, and asked whether he could determine whether her son's condition resulted from a congenital cause or from an acquired cause. Dr. Gadia was unable to make the requested determination due to insufficient information. By letter dated March 27, 1998, the Petitioner resolved the grievance by denying coverage for the requested speech therapy. The letter stated, in pertinent part: On March 23, 1998 the Grievance Committee of Neighborhood Health Partnership met to review your grievance. After thorough review and discussion, the Grievance Committee decided to uphold its original decision and voted to deny payment for services rendered to your son, F. S., for Speech Therapy. The decision to uphold the denial was based on the Group Service Agreement, Article VII, Exclusions and Limitations, which indicate that treatment of learning disabilities, mental retardation and other developmental disorders, including, but not limited to, learning disorders, motor skills disorders, communication disorders and autistic disorders, are not covered. There is anecdotal evidence which suggests the possibility that F. S., Jr.'s, speech disabilities are inherited. There is anecdotal evidence which suggests the possibility that F. S., Jr.'s, speech disabilities are the results of injury during the course of his being delivered by the use of forceps following a difficult period of labor. None of the anecdotal evidence is sufficient to establish one cause or to rule out the other. Similarly, none of the medical records contain sufficient information for a physician to express an expert opinion as to whether F. S., Jr.'s, speech disabilities are the result of one cause or the other. There is a high probability that one cause or the other could be ruled out by an MRI examination. Like most group health insurance policies, the contract in this case was expressed in two documents, a Group Service Agreement and a Member Handbook. The Group Service Agreement, which is typically furnished to the employer, but not to the individual insureds, is the basic insurance agreement. It sets forth the terms and conditions of the insurance agreement and specifically includes statements describing what is covered, describing any limitations on coverage, and describing what is excluded from coverage. The Member Handbook, which is typically the only document furnished to the individual insureds, is a summary of the benefits available under the insurance agreement. In this case the Member Handbook, in effect from October 1996 to the present, specifically stated on the inside front cover: "The following information constitutes a summary of the benefits available under the Group Service Agreement. You must refer to the Group Service Agreement for a detailed explanation of available benefits." The Group Service Agreement in effect from October 1996 to the present contains the following coverage provision: Outpatient Therapies. Physical, respiratory, speech, or occupational therapies for purposes of rehabilitation of an acquired disability, when, in the opinion of the Plan Physician, such therapy will result in optimal improvement in the patient's condition within two (2) months. In no event will the maximum benefit exceed 60 visits per Calendar Year for all services combined. The Member Handbook in effect from October 1996 to the present contains the following coverage provision: Therapy Services Physical, respiratory, speech and occupational therapy. Such coverage will only be provided for rehabilitation of a disability if in the opinion of your PCP, such therapy will result in optimal improvement in your condition within two (2) months. Limited to sixty (60) visits per Calendar Year for all services combined. The Group Service Agreement in effect from October 1996 to the present contains the following exclusions: 11. Treatment of learning disabilities, mental retardation, and other developmental disorders including, but not limited to, learning disorders, motor skills disorders, communication disorders, and autistic disorders; * * * 19. Physical, respiratory, occupational, or speech therapy in excess of 60 visits per Calendar Year; The Member Handbook in effect from October 1996 to the present contains the following exclusions: Physical, respiratory, occupational, or speech therapy in excess of 60 visits per Calendar Year for all services combined. * * * Treatment of learning disabilities, mental retardation and developmental disorders, including but not limited to, learning disorders, motor skills disorders, communication disorders, and autistic disorders.
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 Respondent committed the acts alleged in the Administrative Complaint in violation of Chapter 626, Florida Statutes.
Findings Of Fact At all times pertinent to the dates and occurrences referred to or alleged in these proceedings, Respondent was licensed and eligible for licensure as a nonresident life and health insurance agent in this state. During the period from January 22, 1987 to April 1, 1988, Respondent was licensed as a nonresident life and health insurance agent with United American Insurance Company. On March 19, 1987, Respondent completed and filled out an application for medicare supplement insurance with United American on behalf of Aldon D. Cosson, who could not read and write. Mr. Cosson resided in DeFuniak Springs, Florida, where Respondent completed the application. Said application, referred to in paragraph 3 above, contained, as question 11, the following: "Within the past year, have you had, or been treated for, internal cancer?" At the time that Respondent was completing the application, Mr. Cosson and Ms. Rose Heiter, who was present and witnessed the events, responded' to the question regarding internal cancer by telling Respondent that Mr. Cosson had inoperable lung cancer. At the time of the taking of said application, Respondent completed and filled in a "no" response to question 11. The response to question 11, completed and filled in by Respondent, was in direct conflict with the responses given by Mr. Cosson and Ms. Heiter. On April 1, 1987, United American Insurance Company issued its policy, numbered 4997216, to Aldon D. Cosson, based upon the information provided to it in said application. United American Insurance Company would not have issued the above- mentioned policy, nor any other medicare supplement product, if the answer to question 11 regarding internal cancer had been answered "yes". Said application contained, as question 4, a request for a listing of Mr. Cosson's existing medicare supplement insurance policies. Said application indicated that Mr. Cosson has existing medicare supplement insurance in the form of a policy, numbered 1026302, with Associated Doctors Health and Life Insurance Company. At the time of said application to United American Insurance Company, Mr. Cosson's existing coverage with Associated Doctors Health and Life Insurance Company was paying his medicare supplement claims. The policy for which Mr. Cosson applied was to replace the existing medicare supplement coverage which Mr. Cosson had with Associated Doctors Health and Life Insurance Company. The policy from Associated Doctors was cancelled; however, United American did not pay any benefits, electing to return all premiums tendered by Mr. Cosson. This left Mr. Cosson without insurance coverage, and his estate suffered the expenses of his last illness. Cancellation of a medicare supplement insurance policy, which is not subject to the exclusions for preexisting conditions of adverse health, is not in the best interest of a potential applicant who has those preexisting conditions of adverse health.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the license of Respondent be revoked, as required by Section 626.611, Florida Statutes. DONE AND ORDERED this 14 day of March, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14 day of March, 1990. COPIES FURNISHED: Mr. Tom Gallagher State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Don Dowdell, Esq. General Counsel Department of Insurance The Capitol, Plaza Level Tallahassee, FL 32399-0300 Clyde W. Galloway, Jr., Esq. Division of Legal Affairs 200 East Gaines Street 412 Larson Building Tallahassee, FL 32399-0300 Mr. John Matt Early, pro se 8841 Lott Road Route 2, Box 95-B Wilmer, AL 36587
The Issue Whether the Petitioner, Robbie Reynolds, is eligible for family medical insurance coverage for medical expenses incurred by the Petitioner's son?
Findings Of Fact The Parties. At all times relevant to this proceeding, the Petitioner, Robbie W. Reynolds, was an employee of Department of Corrections, an agency of the State of Florida. The Respondent, the Department of Management Services, Division of State Employees' Insurance (hereinafter referred to as the "Division"), is an agency of the State of Florida. The Division is responsible for managing the State's employee health insurance system. Participation in the State of Florida Health Insurance Plan. The State of Florida makes health insurance available to its employees (hereinafter referred to as the "State Health Plan"). Employees may choose health insurance through the State of Florida Employees' Group Health Self Insurance Plan or through various health maintenance organizations (hereinafter referred to as "HMOs"). The Division has promulgated Chapter 60P, Florida Administrative Code, regulating the State Health Plan. Employees pay part of the premiums for their health insurance and the State contributes a part of the cost of premiums. The amount of premiums paid by an employee and the State depends on the type of coverage selected. Employees may elect coverage only for themselves ("individual" coverage), or coverage for themselves and certain qualified dependents ("family" coverage). Female employees who elect individual coverage are eligible for the payment of maternity or pregnancy benefits. Included in these benefits are certain benefits for the newborn child referred to as "well-baby care." In order for medical expenses attributable solely to a newborn baby that is ill at or after birth to be covered by the State Health Plan, an employee must elect family coverage for the employee and the child. The family coverage must be effective as of the date the medical expenses are incurred for the child. Open Enrollment Periods. Once an employee selects the type of health insurance he or she desires, that employee generally may change the election only during certain designated periods of time, referred to as "open enrollment periods." During an open enrollment period, an employee may change from HMO coverage to the State of Florida Employees' Group Health Self Insurance Plan, or vice versa, may change from individual coverage to family coverage, or vice versa, and may add or delete dependents to the employee's family coverage. Changes to an employees' State Health Plan coverage made during an open enrollment period are effective for the calendar year immediately following the open enrollment period. Other Changes in Health Insurance Coverage. An exception to the requirement of the State Health Plan that changes in coverage only be made during an open enrollment period is provided for certain specified events, referred to as "qualifying events." The acquisition of an "eligible dependent" during a year may constitute a qualifying event. For example, if an employee marries, the employee may elect family coverage for himself or herself and the employee's spouse. A change from individual coverage to family coverage may also be made if an employee or an employee's spouse gives birth to a child. The change to family coverage as a result of marriage or the birth of a child must be made within thirty-one days after the eligible dependent is acquired. An employee may also elect family coverage as a result of the employee or the employee's spouse becoming pregnant. If the employee or employee's spouse elects family coverage in time for the family coverage to be effective at the time of the child's birth, the child may then be added as a dependent to the family coverage by notifying the Division of the child's birth within thirty-one days after the child is born. In order to change to family coverage when an employee or employee's spouse becomes pregnant, the employee, must apply for the change to family coverage in time for the employee to make a month's premium payment on the first day of at least the month during which the child is born or an earlier month. For example, if an employee elects to change from individual coverage to family coverage for a yet to be born child in July effective for September, the first full month's premium is paid on September 1, and the child is born on September 2, the employee has family coverage for all of September and the child will be covered if the Division is notified of the child's birth within thirty-one days after the date of birth. In order for an employee to make a change in coverage as the result of a qualifying event, the employee must file a Change of Information form with the employee's personnel office. The personnel office forwards the form to the Division. Ms. Reynolds' Health Insurance. Ms. Reynolds, as an employee of the State of Florida, was eligible for state health insurance. She elected to participate in the HMO that was available in the Gainesville area where she is employed. AvMed is the name of the HMO for the Gainesville area and Ms. Reynolds' insurer. Although married, Ms. Reynolds initially elected individual coverage. Ms. Reynolds did not elect family coverage for her husband because he received health insurance benefits from his employer. During 1992, Ms. Reynolds became pregnant. The baby's projected due date was April 15, 1993. The Open Enrollment Period for 1993. The open enrollment period for the next calendar year (1993) after Ms. Reynolds became pregnant took place in October of 1992. During the October 1992 open enrollment period the Department of Corrections, through its personnel office, conducted meetings with employees to discuss health care benefits and coverage available to its employees. Two benefits consultants, trained by the Division, conducted the meetings, providing information to, and answering questions from, employees concerning the open enrollment period. Ms. Reynolds, who was approximately three months pregnant at the time of the benefit consultation meetings, attended one of the sessions. Ms. Reynolds attended the session for the purpose of determining what steps she should take to insure that her yet-to-be-born infant was covered by health insurance. Ms. Reynolds spoke for some time with Gail Page and Jordaina Chambers, benefits consultants of the Department of Corrections. Ms. Reynolds informed the benefits consultants that she was pregnant and that she wanted to insure that her yet-to-be-born infant was covered by her health insurance. Ms. Reynolds was incorrectly told that she could not elect family coverage for just her and her yet-to-be-born infant. This incorrect advice, however, did not have any effect on the effective date Ms. Reynolds ultimately decided to begin her family coverage. Ms. Reynolds also informed the benefits consultants that the baby was due April 15, 1993. The benefits consultants informed Ms. Reynolds that her pregnancy constituted a qualifying event and that she could, therefore, switch to family coverage in order to cover her baby. She was also informed that she would have to notify the Division of her child's birth with thirty-one days after birth to add the child to the policy. After being told that she would have to switch her coverage from individual coverage to family coverage, adding her husband as a dependent, Ms. Reynolds asked the benefits consultants when she should switch to family coverage. Consistent with the policies of the Division, and the training the benefits consultants had received from the Division, the benefits consultants advised Ms. Reynolds that she should elect family coverage effective two or three months prior to her due date. The Division makes this recommendation so that employees can save the increased premiums for family coverage a reasonable period of time before the child is born. In light of the fact that Ms. Reynolds' conversation with the benefits consultants took place during the 1992 open enrollment period and the fact that January 1, 1993 was three and one-half months prior to Ms. Reynolds' due date, Ms. Reynolds was advised by the benefits consultants that it would be reasonable to switch from individual coverage to family coverage through the open enrollment period. Based upon this advice, Ms. Reynolds' family coverage would be effective January 1, 1993. The benefits consultants did not advise Ms. Reynolds of any possible consequences of not electing to switch from individual coverage to family coverage with an effective date prior to January 1, 1993. The benefits consultants also did not tell Ms. Reynolds that she could not choose to switch from her individual coverage to family coverage with an effective date prior to January 1, 1993. On or about October 15, 1992, Ms. Reynolds executed and filed with the Division an Annual Benefit Election Form. Respondent's exhibit 1. Pursuant to this form Ms. Reynolds elected to change her health insurance coverage from individual to family effective January 1, 1993. Ms. Reynolds elected to add her husband as a covered dependent. Based upon the election made by Ms. Reynolds, her family coverage became effective on January 1, 1993. If her child was born before that date, any expenses attributable solely to medical services received by the child would not covered by Ms. Reynolds' medical coverage. If the child was born on or after that date and Ms. Reynolds notified the Division of the child's birth within thirty-one days after the child's birth, any expenses attributable solely to medical services received by the child would be covered by Ms. Reynolds' medical coverage. The evidence failed to prove that the advice given by the benefits consultants in October 1992 was not reasonable based upon the information available to them and to Ms. Reynolds. The evidence also failed to prove that either the benefits consultants or Ms. Reynolds unreasonably failed to realize that the child would be born more than three and one-half months premature. Ms. Reynolds, while reasonably relying on the advice of the benefits consultants, knew or should have known that the ultimate decision as to when to begin family coverage was hers to make. Ms. Reynolds also should have been somewhat wary of the advice she was given, in light of the fact that Ms. Reynolds admitted that she was told by the benefits consultants that they "did not know that much about what she was asking." Despite this warning, Ms. Reynolds testified during the final hearing that she followed their advice because she felt there was "no reason to believe they would be wrong." The Premature Birth of the Reynolds' Child. On December 29, 1992, Ms. Reynolds underwent surgery, due to unforeseen medical complications, to deliver her child. The child died on January 1, 1993. In order to add the child as a dependent to her medical insurance when the child was born, Ms. Reynolds had to have family coverage in effect as of December 1, 1992 or earlier. Unfortunately for Ms. Reynolds, on December 29, 1992 when her child was born, Ms. Reynolds only had individual coverage. The rules governing medical benefits of state employees do not allow employees with individual coverage to add dependents. Therefore, even though Ms. Reynolds attempted to get the Division, through the personnel office of the Department of Corrections, to add her child by notifying the personnel office of the birth of the child immediately after December 29, 1993, the child could not be added to her individual coverage. The child received medical services and incurred medical expenses between December 29, 1992 and January 1, 1993. Those expenses were not covered by the well-baby care provided by Ms. Reynolds' individual coverage. Because Ms. Reynolds did not have family coverage at the time the child was born and the child could not be added to her individual coverage, the medical expenses incurred for the child were not covered by Ms. Reynolds' health insurance. Although the child should be added as a dependent to Ms. Reynolds family coverage which took effect as of January 1, 1993, the evidence failed to prove that any medical expenses incurred for the care of the child on January 1, 1993, were not attributable to a preexisting condition. Therefore, expenses incurred for the care of the child on January 1, 1993, are not eligible for reimbursement. Should the Division be Estopped from Denying Coverage? The Division relies on benefits consultants to assist the Division in administering the State Health Plan. Benefits consultants are trained by the Division, they are state employees and they hold themselves out as representing the State in general and the Division in particular. The Division's rules provide for the active involvement of the various personnel offices in administering the State Health Plan. See, Rule 60P- 2.003(1), Florida Administrative Code. The Annual Benefit Election Forms issued by the Division during the open enrollment specifically provide that the forms are to be turned in to employees' personnel offices. The Division allows personnel offices of the various state agencies to hold themselves out to employees as agents of the Division. In this case, Ms. Reynolds was given advice by benefits consultants, on behalf of the Division and consistent with Division policy, which played a role in Ms. Reynolds making a decision which resulted in medical expenses incurred upon the premature birth of her child not being covered by her medical insurance. While Ms. Reynolds was given some incorrect advice, she was not given incorrect advice concerning the effective date of her family coverage. The advice given to Ms. Reynolds concerning when to start her family coverage was reasonable at the time given and, as she admitted during the hearing, there was no reason in October of 1992 to doubt the wisdom of the advice she received. Ultimately, it was Ms. Reynolds decision. While she may not have understood that advice, she made the decision to make choices and act on the advice even after being warned that the benefits consultants were not knowledgeable about what she was asking.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Employees' Insurance enter a Final Order dismissing Robbie W. Reynolds' petition in this matter. DONE AND ENTERED this 19th day of November, 1993, in Tallahassee, Florida. LARRY J. SARTIN 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 19th day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3731 The Division has 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 have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Ms. Reynolds did not file a proposed recommended order. The Division's Proposed Findings of Fact Accepted in 2-3 and 19. Accepted in 4-5, 9 and hereby accepted. Hereby accepted. Accepted in 6 and 9. Accepted in 11-17. Accepted in 7-8. Accepted in 1 and 18-19. Accepted in 23-26. Accepted in 20, 28 and 30-32. But See 27-20. See 29-30. But see 27. Accepted in 34 and 38. See 40. Hereby accepted. Accepted in 40-41 COPIES FURNISHED: Robbie W. Reynolds 2635 South West 35th Place, #1304 Gainesville, Florida 32608 Augustus D. Aikens, Jr. Chief of Bureau of Benefits and Legal Services Division of State Employees' Insurance Department of Management Services 2002 Old St. Augustine Road, B-12 Tallahassee, Florida 32301-4876 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Sylvan Strickland, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
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.
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 in this proceeding is whether Petitioner is entitled to prospective enrollment in the State Group Insurance Program.
Findings Of Fact In or around May 2010, the Florida Department of Economic Opportunity hired Petitioner as an "Other Personal Services Employment" ("OPS") worker——a category of state employee that that is not entitled to benefits, and, as a consequence, does not participate in the State Group Insurance Program. Petitioner's entitlement to benefits changed, however, on November 22, 2011, when she was promoted to deputy clerk, which is a career service position. At or around that time, Petitioner was informed that she had 60 days from the effective date of her promotion to enroll in any benefit plan for which she was eligible. Benefits, including insurance plans, are administered by a private contractor, NorthgateArinso, through an online system called "People First." Following her promotion, Petitioner, with the assistance of her supervisor, investigated the benefit plans available to her by accessing the "My Benefits" pages at www.myflorida.com. Subsequently, on December 13, 2011, Petitioner logged on to the People First system with the intent to make her benefit elections and complete her enrollment.1/ Upon entering the website, Petitioner properly clicked on the tab labeled "Health & Insurance," which took her to the "Health & Insurance Home Page." At that point, Petitioner was presented with eight icons from which to choose: General Benefits Information Go to the MyBenefits website for your insurance options. Your Benefits Review your benefits and Flexible Spending Accounts. Insurance Companies See contact information. Your Dependents' Information View and update dependents' information. Benefits Choices Enroll or change your benefits. Benefit Premium History Review your insurance. Required Documentation Review status of your documentation. Benefits Materials View and request insurance forms and booklets. Of the foregoing options, Petitioner correctly selected "Benefits Choices," at which point she was navigated to a page that offered her the ability to register any eligible dependents. Not wishing to add any dependents, Petitioner selected the "Go to Next Step" button, which, in turn, took her to a page that listed "Current Plans." (As Petitioner had not previously made any elections, no health, vision, or dental plans were listed below the tab labeled "Current Plans"). Immediately adjacent to "Current Plans" were eleven other tabs: Health; Flex Spend Acct; Basic Life; Optional Life; Dental; Vision; Accident; Cancer; Disability; Intensive Care; and Hospitalization. From these options, Petitioner first selected "Health," which brought up a list of available health insurance plans. At that point, Petitioner chose the box next to the Coventry Health Care individual health insurance plan. Significantly, however, this action did not finalize Petitioner's selection (as explained shortly, no choices are processed until an employee clicks, on a subsequent web page, the "complete enrollment" button). After choosing——but not finalizing——her health insurance coverage, Petitioner clicked on the "Dental" tab. Although the undersigned credits Petitioner's testimony that she selected the box next to one of the available options, there is an absence of evidence concerning the identity of the plan in which she sought to enroll.2/ Next, Petitioner chose the "Vision" tab, which, similar to the "Health" and "Dental" screens, produced a list of available plans. Of the various choices, Petitioner clicked on the box next to the Coventry Health Care individual vision plan. Significantly, and as alluded to above, benefit elections are not finalized in the People First system until two actions are taken: first, the rectangle labeled "Summary/Last Step" must be selected, which leads to a screen titled "Process Benefit Elections"; and, once taken to the "Benefits Elections Page," the employee must click the shaded rectangle titled "Complete Enrollment." Upon the completion of these steps, a confirmation page appears that lists the employee's name and People First identification number; the page also reads, in pertinent part, "Please save or print for your records . . . This is your confirmation of benefits through the State Group Insurance Program." Notably, the record is devoid of evidence that such a confirmation page was ever generated. While Petitioner's testimony that she "checked the boxes" next to her desired benefits plans has been credited, the undersigned is not persuaded by the greater weight of the evidence that Petitioner completed the process' final two steps on December 13, 2011,3/ or on any other occasion prior to the expiration of the 60-day deadline.4/ On or about January 26, 2012, Petitioner became concerned that she had not received any materials concerning the insurance plans in which she thought she had enrolled. On that date, Petitioner telephoned the People First hotline and, at some point during the conversation that ensued, was informed that there was no record of any benefit elections having been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order denying Petitioner's request to enroll in the State Group Insurance Program. DONE AND ENTERED this 4th day of October, 2012, in Tallahassee, Leon County, Florida. S EDWARD T. BAUER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 2012.
The Issue Whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, the penalty that should be imposed.
Findings Of Fact At all times material hereto, Respondent was licensed by Petitioner as an insurance agent in the State of Florida licensed to sell health insurance. At all times material hereto, Respondent was not formally affiliated with Cleveland Insurance Agency. However, Cleveland Insurance Agency often referred clients to Respondent for health and Medicare supplement policies because Cleveland Insurance Agency did not handle those type policies. Prior to November 1987, Respondent, working in conjunction with Cleveland Insurance Company, sold to Irene Goldberg a health insurance policy issued through Provider's Fidelity Insurance Company (Provider's Fidelity). On November 29, 1987, Ms. Goldberg paid $1,504.56 as the annual renewal premium for this health insurance policy which extended her coverage through December 4, 1988. In March of 1988, Ms. Goldberg contacted Cleveland Insurance Agency and requested that someone review her health insurance coverage. Cleveland Insurance Agency referred Ms. Goldberg's request to Respondent. Respondent was familiar with the terms and conditions of the health insurance coverage Ms. Goldberg had in place and he knew that she had paid the premium for this policy through December 1988. Upon visiting with Irene Goldberg on or about March 10, 1988, Respondent presented Ms. Goldberg with a business card that intentionally misrepresented his status with Cleveland Insurance Company. Because Ms. Goldberg had placed most of her insurance needs through Cleveland Insurance Agency during the past few years, Respondent intentionally misled Ms. Goldberg into thinking that he was formally affiliated with Cleveland Insurance Agency. During that visit, Respondent recommended to Ms. Goldberg that she purchase a policy of insurance issued by First National Life Insurance Company (First National) to replace her Provider's Fidelity policy. Ms. Goldberg specifically discussed with Respondent a preexisting medical condition which required periodic medical treatment and the need for the treatment required by this condition to be covered by the new policy. Respondent assured Ms. Goldberg that the preexisting condition would be covered by the new policy. Respondent also told Ms. Goldberg that he would cancel the Provider's Fidelity policy and that he would secure on her behalf a pro rated refund of the premium she had paid to Provider's Fidelity. Based on Respondent's representations, Ms. Goldberg agreed to purchase the First National policy. On March 30, 1988, Ms. Goldberg gave to Respondent a check made payable to First National Life Insurance Company in the amount of $1,892.00, the amount Respondent had quoted as the full annual premium. A few days later, Respondent contacted Ms. Goldberg and advised her that there would be an additional premium in the amount of $1,360.00, which Ms. Goldberg paid on April 4, 1988. This additional premium was, according to Respondent, for skilled nursing care coverage which First National had added as a mandatory feature of the policy Ms. Goldberg had purchased. The skilled nursing care coverage was, in fact, a separate policy which was not a mandatory feature of the policy Ms. Goldberg thought she was purchasing from First National. Respondent misled Ms. Goldberg as to the terms of the policies he had sold her and as to the number of policies he had sold her. Respondent represented that the premiums he had collected on behalf of First National were in payment of a single health insurance policy. Respondent had sold Ms. Goldberg four separate policies, and he collected a commission for each of the policies. When Ms. Goldberg received her insurance documents from First National, she learned for the first time that Respondent had sold her four separate policies of insurance, including a cancer policy that she and Respondent had never discussed. In addition to the health and cancer policies, Respondent sold Ms. Goldberg a home convalescent care policy and a separate skilled nursing care policy. Respondent had sold Ms. Goldberg policies of insurance that Ms. Goldberg had not requested and that she did not know she was buying. Upon reading the health policy, Ms. Goldberg discovered that her new First National Life policy excluded her preexisting condition. Ms. Goldberg contacted Respondent who told her that he had not cancelled the Provider's Fidelity policy as he had agreed to do and that he had not tried to get the pro rated refund of the Provider's Fidelity premium. Respondent told her that any claim she might have for the preexisting condition should be filed under the Provider's Fidelity policy. Ms. Goldberg then complained to First National which, after an investigation, refunded to Ms. Goldberg the premiums she had paid for the three policies. Respondent had received a commission on the policies of insurance he had sold to Ms. Goldberg. As of the time of the hearing, Respondent had not reimbursed First National for the commission he had received based on the premiums that were subsequently refunded to Ms. Goldberg. In February 1988, Respondent met with Helen Krafft to discuss her health insurance needs. During the course of the meeting, Respondent presented to Ms. Krafft a business card which intentionally misrepresented his affiliation with Cleveland Insurance Agency. This business card misled Ms. Krafft into believing that Respondent was formally affiliated with Cleveland Insurance Agency. On February 18, 1988, Respondent sold to Ms. Krafft a health insurance policy through First National and a health insurance policy issued through American Sun Life, at which time he collected a premiums in the total amount of $519.80 for six months of coverage from each of the two policies. In July 1988, Respondent visited with Ms. Krafft at her place of work and told her that she should pay her renewal premiums for the health insurance policies on or before August 1, 1988, to avoid a premium increases. Respondent knew, or should have known, that there were no premium increases scheduled for those policies and that there were no discounts for early payment of the premiums The renewal premiums Respondent quoted Ms. Krafft for the two policies totaled $485.40. At Respondent's instructions Ms. Krafft delivered to Respondent her signed check dated July 18, 1988, in the amount of $485.40 with the payee's name left blank. Respondent accepted these trust funds from Ms. Krafft in a fiduciary capacity. Instead of using these funds to pay the premiums as he had agreed to do, Respondent filled his name in on Ms. Krafft's check and cashed it. Ms. Krafft learned that Respondent had not used the funds she had given him to renew her two policies when she started getting late payment notices from the two insurance companies with accompanying threats of cancellation if the premiums were not paid. In late September 1988, Respondent paid to Ms. Krafft the sum of $485.40 in cash. In June of 1988, Steven R. and Marilyn Hill applied, through Respondent, for a health policy with First National. The Hills paid the initial premium of $304.37 by check made payable to First National on June 26, 1988. Because of underwriting considerations, First National informed Respondent that the Hills would have to pay a higher premium to obtain the insurance they wanted. The Hills were not willing to pay the higher premium and requested a refund of the amount they had paid. First National made the refund check payable to Steven Hill and mailed the check to Respondent. There was no competent, substantial evidence as to what happened to the check other than First National Life stopped payment on the check and it never cleared banking channels. A second refund check was later delivered to Steven Hill. First National contended at the hearing that Respondent had accrued a debit balance in the amount of $2,692.45 as a result of his dealings as an agent of the company. Respondent contended that he is entitled to certain offsets against the amount First National claims it is owed based on commissions he contends that he had earned but had not been paid. First National had not, prior to the hearing, submitted to Respondent any type of accounting of sums due, nor had it explicitly demanded any specific sum from Respondent. Instead, First National had made a blanket demand that Respondent return all materials belonging to First National and advised that future commission checks would be held in escrow. From the evidence presented it could not be determined that Respondent was indebted to First National.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Insurance and Treasurer enter a final order which finds that Respondent committed the multiple violations of the Florida Insurance Code as set forth in the Conclusions of Law portion of this Recommended Order and which further revokes all licenses issued by the Department of Insurance and Treasurer to Respondent, John Richard Klee. DONE AND ENTERED this 30th day of November, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division Of Administrative Hearings this 30th day of November, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-3269 The following rulings are made on the proposed findings of fact submitted by Petitioner: The proposed findings of fact in paragraph 1 are adopted in material part by paragraph 1 of the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by paragraph 1 of the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by paragraph 12 of the Recommended Order. The proposed findings of fact in paragraph 3 are rejected in part as being a conclusion of law. The proposed findings of fact in paragraph 4 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in material part by paragraph 3 of the Recommended Order. The proposed findings of fact in paragraph 6 are adopted in material part by paragraph 4 of the Recommended Order. The proposed findings of fact in paragraph 7 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 8 are adopted in material part by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph 9 are adopted in material part by paragraphs 5 and 6 of the Recommended Order. 10 are adopted in material part 11 are adopted in material part 12 are adopted in material part 13 are adopted in material part 14 are adopted in material part 15 are adopted in material part 16 are adopted in material part 17 are adopted in material part 18 are adopted in material part 19 are adopted in material part 20 are adopted in material part 21 are adopted in material part 22 are adopted in material part 23 are adopted in material part 24 are adopted in material part 25 are rejected as being The proposed findings of fact in paragraph by paragraphs 5 and 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 5 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph by paragraphs 5 and 7 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 10 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 11 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 12 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 2 and 10 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph by paragraph 13 of the Recommended Order. The proposed findings of fact in paragraph unsubstantiated by the evidence. The proposed findings of fact in paragraph 26 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 27 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 28 are rejected as being unsubstantiated by the evidence. The proposed findings of fact in paragraph 29 are adopted in material part by paragraph 14 of the Recommended Order. The proposed findings of fact in paragraph 30 are adopted in material part by paragraph 14 of the Recommended Order. COPIES FURNISHED: Roy H. Schmidt, Esquire Office of the Treasurer Department of Insurance 412 Larson Building Tallahassee Florida 32399-0300 Greg Ross, Esquire 400 Southeast Eighth Street Fort Lauderdale, Florida 33316 Don Dowdell General Counsel The Capitol Plaza Level Tallahassee, Florida 32399-0300 Hon. Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue The issue in this case is whether Respondent, Charles Steven Lieberman, committed the offenses alleged in an Administrative Complaint issued by Petitioner, the Department of Financial Services, on January 26, 2004, and, if so, what penalty should be imposed.
Findings Of Fact The Parties. Petitioner, the Department of Financial Services (hereinafter referred to as the "Department"), is the agency of the State of Florida charged with the responsibility for, among other things, the investigation and prosecution of complaints against individuals licensed to conduct insurance business in Florida. Ch. 626, Fla. Stat. (2004).1 Respondent, Charles Steven Lieberman, is currently, and was at all times pertinent to this matter, licensed in Florida as a resident Life & Variable Annuity (2-14); Life, Health & Variable Annuity (2-15); Life (2-16); Life & Health (2-18); and Health (2-40) Agent. (Stipulated Facts). The Department has jurisdiction over Mr. Lieberman's licenses and appointments pursuant to Chapter 626, Florida Statutes. (Stipulated Facts) Mr. Lieberman's license identification number is A155409. (Stipulated Facts). Mr. Lieberman graduated from Columbia University. From 1974 through 1992, Mr. Lieberman worked as a trader initially on the floor of the Chicago Board of Options Exchange, and later, the Chicago Mercantile Exchange. Mr. Lieberman has held his insurance licenses for ten years. This is the first administrative complaint issued against him. Mr. Lieberman's Business. Mr. Lieberman, at all times pertinent, served as president of Charles Lieberman, Inc. (Stipulated Facts). Mr. Lieberman, at all times pertinent, was the designated primary agent, as defined in Section 626.592, Florida Statutes, of Charles Lieberman, Inc. (Stipulated Facts). Charles Lieberman, Inc., at all times pertinent, owned and did business as "National Medical Services" and "The Insurance Center." (Stipulated Facts). Mr. Lieberman's "Medical Benefits Plan"/"Medical Savings Plan." Mr. Lieberman offers customers who are seeking medical insurance a plan which he calls a "Medical Benefits Plan" or "Medical Savings Plan" (hereinafter referred to as the "Lieberman Medical Benefits Plan"). The Lieberman Medical Benefits Plan consists of the following components (hereinafter referred collectively as the "Plan Products"): A hospital and surgery expense payment policy (hereinafter referred to as the "Hospital Insurance Plan"); A Catastrophe Major Medical Insurance Plan (hereinafter referred to as the "Major Medical Insurance Plan"); and A discount card titled "The Chamber Card" (hereinafter referred to as the "Chamber Card"), with a "Limited Product Warranty." None of the Plan Products included insurance coverage for physician office visits, a fact which Mr. Lieberman was fully aware of. The Hospital Insurance Plan. The Hospital Insurance Plan provides coverage for hospital and surgical expenses. It does not provide coverage for physician office visits. The Hospital Insurance Plan is a medical insurance plan offered by United American Insurance Company (hereinafter referred to as "United American"). Mr. Lieberman is an agent for United American. Petitioner's Exhibit 64 is a copy of the hospital and surgery expense policy that constitutes the Hospital Insurance Plan sold by Mr. Lieberman. (Stipulated Facts). Petitioner's Exhibit 65 is a copy of the Schedule of Benefits for the Hospital Insurance Plan. (Stipulated Facts). The Major Medical Insurance Plan. The Major Medical Insurance Plan provides coverage for major medical expenses in excess of $25,000.00. It does not provide coverage for physician office visits. The Major Medical Insurance Plan is also a medical insurance plan. It is offered by United States Life Insurance Company (hereinafter referred to as "U.S. Life"). In order to purchase a Major Medical Insurance Plan, customers are required to join one of many organizations which purchase Major Medical Insurance Plans through Seabury & Smith2, an organization which administers the sale of health insurance for U.S. Life. Customers, once they join such an organization, are then required to purchase the Major Medical Insurance Plan through the organization they joined. Mr. Lieberman is not an agent for U.S. Life or affiliated with Seabury & Smith. He does not, therefore, sell Major Medical Insurance Plans. Nor does he receive any compensation if any of his customers purchase a Major Medical Insurance Plan. Mr. Lieberman does, however, recommend the purchase of a Major Medical Insurance Plan as part of the Lieberman Medical Benefits Plan. In order to facilitate the purchase, Mr. Lieberman has his customers join the "American Contract Bridge League."3 His customers then purchase a Major Medical Insurance Plan directly based upon their League membership. Petitioner's Exhibit 63 is a copy of the Major Medical Insurance Plan which by Mr. Lieberman recommended that his customers purchase. (Stipulated Facts). The Chamber Card. In an effort to provide some relief for cost of physician office visits, which was not covered by the Hospital Insurance Plan or the Major Medical Insurance Plan, Mr. Lieberman sold his customers the Chamber Card. The Chamber Card, which is not insurance (Stipulated Facts), is a card which entitles the holder thereof to a discount4 for various medical services, including physician office visits. In an effort to enhance the discounts from the Chamber Card available to Mr. Lieberman's customers, Mr. Lieberman also provided what he termed a "Limited Product Warranty" which he offered through Charles Lieberman, Inc., d/b/a National Medical Services. This Limited Product Warranty is also not insurance. Pursuant to Mr. Lieberman's Limited Product Warranty, Mr. Lieberman purportedly agreed to provide reimbursement of the cost of any physician office visit in excess of $15.00, an amount which he referred to as a "copay," which was not paid for by the Chamber Card. The additional discounts were dependant, however, on Mr. Lieberman's ability to negotiate a reduction in the fees incurred by his customers directly from the physician.5 In describing the Chamber Card and the Limited Product Warranty sold by Mr. Lieberman, he used the acronyms "PPO" and "PHCS," and terms like "copay" and "claims" normally associated with the insurance industry. Customer W.E. (Count I of the Administrative Complaint). Prior to September 12, 2002, W.E. spoke with Mr. Lieberman by telephone. She explained to him that she was interested in purchasing health insurance, and before she could explain what she meant in any detail, he informed her that he could provide any health insurance she wanted as long as she did not have high blood pressure, which she did not. On September 12, 2002, W.E. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. She explained to Mr. Lieberman that she wanted a health insurance plan similar to what she had had before she recently moved to Florida and that she wanted a plan with minimum co-payments. She also indicated that she wanted a basic insurance plan until she was able to find employment where her health insurance would be provided for her. W.E. did not specifically tell Mr. Lieberman that she wanted insurance that covered physician office visits.6 Rather, she reasonably assumed that by telling Mr. Lieberman that she wanted to purchase "health insurance" that, as an insurance agent, he would understand that she wanted coverage for physician office visits. Mr. Lieberman, rather than providing the insurance coverage which he knew or should have known W.E. was seeking, coverage which included physician office visits, suggested that she purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to W.E., based upon the manner in which he explained his plan at hearing, it is understandable that W.E. did not understand what she was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On September 12, 2002, Mr. Lieberman sold or arranged for the sale of the Plan Products, as more fully described in Findings of Fact 9 through 25, to W.E.: W.E. signed an application for membership in the American Contract Bridge League (Stipulated Facts); W.E. wrote a check for her membership in the American Contract Bridge League (Stipulated Facts); W.E. signed an application and wrote checks for the Chamber Card and a United American Hospital Insurance Plan (Stipulated Facts); and W.E. signed an application for a Major Medical Insurance Plan from U.S. Life and wrote a check to Seabury & Smith. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling W.E. a product which she was not interested in purchasing and that he was not providing her with a significant part of the insurance coverage she was interested in purchasing, coverage of physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to W.E. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the cost of physician office visits. W.E. did not understand what she was purchasing. She even believed incorrectly that she had not been provided any insurance at all by Mr. Lieberman. While this incorrect assumption was based in part upon comments she perceived were made by a Department investigator, her comments show that she was unknowledgeable about insurance and, therefore, placed her full reliance on upon Mr. Lieberman. Even though W.E. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed an Acknowledgement & Disclaimer and an Acknowledgement & Disclosures (both of which are quoted, infra, in Finding of Fact 35); and signed a document titled "Medical Benefits Plan” which contained an acknowledgement (quoted, infra. In Finding of Fact 36), W.E., unlike Mr. Lieberman, did not understand that she was purchasing a product which she had not requested and did not want. The Acknowledgement & Disclaimer and Acknowledgement & Disclosures signed by W.E. provided the following: ACKNOWLEDGEMENT AND DISCLAIMER I understand that the US Life Catastrophic Insurance Policy is being purchased through the mail from Seabury & Smith (Group Insurance Plans), who are the brokers for that plan. Although I am purchasing other insurance from Charles Lieberman, I realize that Mr. Lieberman is in no way representing Seabury & Smith or US Life and that he is only making me aware that this plan is available. I acknowledge that it is my sole responsibility to review this plan and its features to determine suitability once the policy is received. Insured Date ACKNOWLEDGEMENT AND DISCLOSURES I hereby acknowledge that I am purchasing insurance that covers approximately 75% of the first $10,000 in the hospital then covers 100% hospitalization above $25,000. Although my PHCS PPO Access/Medical Savings Card (which is not insurance) will, in most cases, reduce this potential liability; through negotiated savings, it is not guaranteed to eliminate it in it [sic] entirety. INSURED DATE The foregoing Acknowledgement & Disclaimer and the Acknowledgement & Disclosures are misleading at best, and deceiving at worst. While the Acknowledgement & Disclosures includes the language "which is not insurance," that language is included after the terms "PHCS PPO Access/Medical Savings Card," terms which are not clearly identified or explained and are, along with other terminology used in the Disclosures (i.e., "PPO" and "copay") reasonably associated with health-care insurance. More importantly, the Acknowledgement & Disclaimer and the Acknowledgement & Disclosures do not explain that physician office visits are not being provided through health care insurance. Finally, W.E. was not given an opportunity by Mr. Lieberman to read the Acknowledgement & Disclaimer, the Acknowledgement & Disclosures, or any other documents shown to her by Mr. Lieberman. He simply placed most of the documents which she had to sign in front of her with only the part she was required to sign visible and told her to sign them, which she did. The following acknowledgment was also contained in a document titled "Medical Benefits Plan" which W.E. signed: By signing below, I agree that all information provided above is complete, accurate, and truthful. I recognize that because of the high cost of health insurance, National Medical Savings, plan administrator, has attempted to put together a "medical savings/benefit plan" which allows clients to purchase reasonably priced hospitalization insurance from well known a- rated insurance companies and combine it with a product which is not insurance to better suit the clients' needs. I understand that anything associated with the PPO repricing or copay rebates is part of the "medical savings plan" and is in no way to be considered as insurance, but rather as an affordable alternative to satisfy the need to reduce medical costs. Like the Acknowledgments quoted in Finding of Fact 35, this acknowledgement, which appears after a paragraph titled "Pre- Authorized Payment Plan" on the form, is misleading. It is not clear that it is referring to the Chamber Card, it contains terms normally associated with insurance coverage in spite of the disclaimer, and Mr. Lieberman gave W.E. no reasonable opportunity to read the disclaimer before having her sign it. After enrolling W.E. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which W.E. had signed on September 12, 2002, to her. This was her first realistic opportunity to read the documents. After receiving the documents concerning the Lieberman Medical Benefits Plan, W.E. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by W.E. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the disclaimer, the lack of opportunity that W.E. had to read the documents, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to W.E., Mr. Lieberman: Did not inform her that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold her products, none of which provided insurance coverage for the cost of physician office visits. Customer A.H. (Count II of the Administrative Complaint). Prior to April 11, 2003, Mr. Lieberman contacted and spoke to A.H. by telephone. A.H. told Mr. Lieberman that she was interested in purchasing health insurance, including insurance covering physician office visits, with co-pay, and hospitalization expenses, with a deductible. On April 11, 2003, A.H. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. She again explained to Mr. Lieberman that she was interested in a policy that covered physician office visits, with a co-pay, and hospitalization expenses, with a deductible. Mr. Lieberman, rather than providing insurance coverage which he knew or should have known A.H. was seeking, coverage which included physician office visits, suggested that she purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to A.H., based upon the manner in which he explained his plan at hearing, it is understandable that A.H. did not understand what she was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On April 11, 2003, Mr. Lieberman sold or arranged for the sale of the same Plan Products to A.H. that he had sold to W.E., described in Finding of Fact 30, supra. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling A.H. a product which she was not interested in purchasing and that he was not providing her with a significant part of the insurance coverage she was interested in purchasing, coverage of physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to A.H. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the cost of physician office visits. Like W.E., A.H. signed the Acknowledgment and Disclaimer and the Acknowledgement and Disclosures quoted, supra, in Finding of Fact 35, and the disclaimer quoted, supra, in Finding of Fact 36. The Acknowledgements and the disclaimer were deficient for the same reasons described in Findings of Fact 35 and 36. Like W.E., even though A.H. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed the Acknowledgement & Disclaimer and an Acknowledgement & Disclosures; and signed the disclaimer contained in a form titled "Medical Benefits Plan," A.H., unlike Mr. Lieberman, did not understand that she was purchasing a product which she had not requested and did not want. Having explained to Mr. Lieberman that she wanted a policy that covered physician office visits and not having been told that was not what she was purchasing, she simply relied upon Mr. Lieberman. After enrolling A.H. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which A.H. had signed on April 11, 2003, to her. Some time after receiving the documents concerning the Lieberman Medical Benefits Plan, A.H. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by A.H. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the Disclaimer, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to A.H., Mr. Lieberman: Did not inform her that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold her products, none of which provided insurance coverage for the cost of physician office visits. Customer R.G. (Count III of the Administrative Complaint). R.G. did not testify at the final hearing. The factual allegations of Count III of the Administrative Complaint were not proved. Customer J.E. (Count IV of the Administrative Complaint). Prior to January 17, 2003, J.E. spoke with Mr. Lieberman by telephone. J.E. explained to Mr. Lieberman that he was interested in purchasing health insurance to replace the Blue Cross/Blue Shield health-care insurance he currently had. On January 17, 2003, J.E. met with Mr. Lieberman (Stipulated Facts) at his home to discuss purchasing health-care insurance. He explained to Mr. Lieberman that he was interested in a policy to replace his current policy with Blue Cross/Blue Shield. J.E. specifically requested a policy that covered physician office visits. Mr. Lieberman, rather than providing insurance coverage which he knew or should have known J.E. was seeking, coverage which included physician office visits, suggested that he purchase the Lieberman Medical Benefits Plan. While Mr. Lieberman attempted to give some limited explanation of his plan to J.E., based upon the manner in which he explained his plan at hearing, it is understandable that J.E. did not understand what he was purchasing, or, more specifically, that the plan, while including some health care coverage, did not include coverage for physician office visits. On January 17, 2003, Mr. Lieberman sold or arranged for the sale to J.E. of the same Plan Products he sold to W.E. described in Finding of Fact 30, supra. (Stipulated Facts). Mr. Lieberman knew or should have known that he was selling J.E. a product which he was not interested in purchasing and that he was not providing him with a significant part of the insurance coverage he was interested in purchasing, coverage for physician office visits. While Mr. Lieberman gave some limited explanation of what the Chamber Card was, he did not fully explain to J.E. that it was not an insurance program, plan, or policy; that it would not pay for physician office visits; or that it only provided some unspecified discount on the costs of physician office visits. Like W.E. and A.H., J.E. also signed the Acknowledgment and Disclaimer and the Acknowledgement and Disclosures quoted, supra, in Finding of Fact 35, and the disclaimer quoted, supra, in Finding of Fact 36. The Acknowledgements and the disclaimer were deficient for the same reasons described in Findings of Fact 35 and 36. Like W.E. and A.H., even though J.E.. issued separate checks made payable to "A.C.B.L." (the American Contract Bridge League), Seabury & Smith (for the Major Medical Insurance Plan), United American (for the Hospital Insurance Plan), and National Medical Services (for the Chamber Card); signed the Acknowledgement & Disclaimer and an Acknowledgement & Disclosures; and signed the disclaimer contained in a form titled "Medical Benefits Plan," J.E., unlike Mr. Lieberman, did not understand that he was purchasing a product which he had not requested and did not want. Having explained to Mr. Lieberman that he wanted a policy that covered physician office visits and not having been told that was not what he was purchasing, he simply relied upon Mr. Lieberman. After enrolling J.E. in the Lieberman Medical Benefits Plan, Mr. Lieberman mailed all the documents which J.E. had signed on January 17, 2003, to him. Some time after receiving the documents concerning the Lieberman Medical Benefits Plan, J.E. cancelled all of the Plan Products. Although there was some language in the Acknowledgement and Disclosures and the form titled "Medical Benefits Plan" signed by J.E. indicating that some part of the Lieberman Medical Benefits Plan was not insurance, due to the ambiguity of the language of the Acknowledgement and the disclaimer, the lack of opportunity to read the documents before he signed them, the other language normally associated with insurance used in the documents, and the lack of coherent explanation provided by Mr. Lieberman, it is found that, as to J.E., Mr. Lieberman: Did not inform him that the Chamber Card was not an insurance program, plan, or policy; "Portrayed" the Chamber Card as an insurance program, plan, or policy; and Sold him products, none of which provided insurance coverage for the cost of physician office visits. The Administrative Complaint. On January 26, 2004, the Department issued a four- count Administrative Complaint against Mr. Lieberman. (Stipulated Facts).7 The Administrative Complaint contains four counts, one each for Mr. Lieberman's association with W.E. (Count I), A.H. (Count II), R.G. (Count III), and J.E. (Count IV). The Administrative Complaint alleges that Mr. Lieberman's conduct with all four individuals violated Section 626.611(6), (7), and (8), Florida Statutes, and Section 626.621(2), Florida Statutes. The Administrative Complaint also alleges that, as to A.H., Mr. Lieberman violated Section 626.621(6), Florida Statutes. In support of the alleged statutory violations, the Department alleged, in part, that with regard to all four individuals: Mr. Lieberman "did not inform [his customers] that The Chamber Card was not an insurance program, plan or policy"; Mr. Liberman "portrayed The Chamber Card as an insurance program, plan or policy"; and That "[n]one of the products you, CHARLES STEVEN LIEBERMAN, sold to [W.E., A.H., R.G., and J.E.] provide insurance coverage for the cost of doctors' visits."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department finding that Charles Steven Lieberman violated Sections 626.611(7) and (8), Florida Statutes, as alleged in Counts I, II, and IV of the Administrative Code; dismissing Count III of the Administrative Code; and suspending his licenses for a period of 12 months from the date of the final order. DONE AND ENTERED this 31st day of August, 2004, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 31st day of August, 2004.
