The Issue Whether the Petitioner is required to reimburse the Respondent for prescription drugs acquired by the Petitioner through the Prescription Drug Program of the State of Florida Employees Group Health Self Insurance Plan?
Findings Of Fact The Petitioner was an employee of the State of Florida during the latter part of 1985 and during 1986. His employment with the State began January 27, 1984. Prior to December 1, 1985, the Petitioner participated in the State of Florida Employees Group Health Self Insurance Plan (hereinafter referred to as the "State Plan"). On October 31, 1985, the Petitioner signed a Change of Information form electing to terminate his participation in the State Plan and to begin participation in a Health Maintenance Organization (hereinafter referred to as an "HMO"). The HMO the Petitioner selected was the Capital Health Plan. The title of the form the Petitioner signed on October 31, 1985, contained the following: STATE OF FLORIDA EMPLOYEES GROUP HEALTH SELF INSURANCE PLAN CHANGE OF INFORMATION FOR USE ONLY BY A CURRENT EMPLOYEE OF THIS PLAN [Emphasis added]. Above the Petitioner's signature was the following "employee authorization": I hereby request the above changes in my coverage and/or insurance information in the State of Florida Employees Group Health Self Insurance Plan....[Emphasis added] Prior to terminating his coverage under the State Plan, the Petitioner was given a brochure titled "A Comparison of Health Benefit Plans Offered to Employees of the State of Florida" (hereinafter referred to as the "Comparison Brochure"). The brochure was for employees working in North Florida. The Comparison Brochure indicates there are two general types of health insurance plans available to state employees: HMO Benefit Plans and the State Plan. The Comparison Brochure also indicates there are four HMO Benefit Plans available. Capital Health Plan, the plan the Petitioner elected on October 31, 1985, is one of the clearly designated HMO Benefit Plans listed in the Comparison Brochure. The Comparison Brochure provides the following with regard to prescription drugs for Capital Health Plan participants: "$3.00 co-payment at CHP pharmacy." The Comparison Brochure provides the following with regard to prescription drugs for State Plan participants: "PPC provider not available at this time" if a preferred provider is used and "20 percent co-payment (7)" when a non-preferred provider is used. The reference to "(7)" is a footnote which provides: "Prescription Drug Plan will be implemented by 1-1-86, paying 100 percent after nominal dispensing fee." The Comparison Brochure contains the following other pertinent information: Along with the conventional group health self insurance plan administered by Blue Cross/Blue Shield, the State of Florida offers its employees the opportunity to enroll in a different health care arrangement. This arrangement, called a Health Maintenance Organization (HMO), is available to eligible employees who live within a specific geographic area surrounding the HMO. The Comparison Brochure contains other information that indicates that the State Plan and the Capital Health Plan HMO are completely different types or methods of obtaining health insurance coverage available to state employees. Based upon the information contained in the Comparison Brochure, which the Petitioner indicated he read, the Petitioner should have known that he was entitled to health insurance benefits under the Capital Health Plan HMO as of December 1, 1985, and that he was not entitled to any health insurance benefits under the State Plan. Sometime after December 20, 1985, the Petitioner received a letter from the Department of Administration which provided in pertinent part: Dear Participant: We are pleased to announce the new Prescription Drug Program. Effective January 1, 1986, coverage for prescription drugs under the State Employees Group Health Self Insurance Plan is provided through a prescription drug program serviced by Paid Prescriptions and National Rx Services, Inc. This program is specifically designed to save you money when you use a Preferred Provider Organization (PPO) Pharmacy and Mail Service for your prescription drugs. [Emphasis added]. Included with the letter of December 20, 1985, was a "PLASTIC CARD to use at PPO and participating pharmacies" and a "brochure which gives you instruction on using the Program and a detachable patient profile for Mail Service." The prescription drug card the Petitioner received had "State of Florida Employees Group Health Self insurance Plan" printed on it. It did not contain any reference to Capital Health Plan or any other HMO. The brochure included with the letter of December 20, 1985, which the Petitioner received had "State of Florida Employees Group Health Self insurance Plan" printed at the top of the front cover of the brochure and elsewhere in the brochure. It did not contain any reference to Capital Health Plan or any other HMO. The brochure included with the letter of December 20, 1985, provided the following pertinent information: Coverage for prescription drugs under the State Employees' Group Health Self Insurance Plan is provided through the Prescription Drug Program.... A toll-free telephone number was provided on the prescription drug card and the brochure which the Petitioner was instructed could be used if he had any questions. The prescription drug card sent to the Petitioner was sent to all state employees participating in the "State Employees Group Health Self Insurance Plan." It was not for use by state employees participating in the Capital Health Plan or other HMO's. The card was erroneously sent to the Petitioner by the Respondent. Because the Petitioner had terminated his coverage under the State Plan and elected to participate in an HMO effective December 1, 1985, he was not entitled to use the prescription drug card which he received from the Respondent. In order for the Respondent to have the prescription drug cards ready to be mailed to participants in the State Plan before January 1, 1986, the Respondent used information concerning participants prior to December 1, 1985. Evidently no effort was made by the Respondent to insure that participants who left the State Plan during the end of 1985 did not receive a prescription drug card. The Respondent did send a memorandum dated December 20, 1985, to Personnel Officers and Insurance Coordinators requesting that they attempt to retrieve prescription drug cards from employees who terminated their participation in the State Plan after November 1, 1985. No one retrieved the Petitioner's card. After receiving his card, the Petitioner spoke to the business manager of the County Public Health Unit where the Petitioner worked for the Department of Health and Rehabilitative Services. The Petitioner asked the business manager whether he could use the card and was told that he did not know but would find out. The business manager later told the Petitioner that he had talked to the district personnel office and been told that the Petitioner could use the card. On February 26, 1986, and February 27, 1986, the Petitioner used the prescription drug card to purchase prescription drugs in south Florida. The Petitioner talked with a physician at Capital Health Plan by telephone before purchasing the medications and was authorized to receive treatment by other than a Capital Health Plan physician. The State was billed $5.82 for the medications purchased with the card on February 21, 1986 and February 26, 1986. On March 1, 1986, the Petitioner again used the card to purchase medications. The card was used in Tallahassee, Florida. The State was billed $63.95 ($55.43 and $8.52) for the medications purchased with the card on March 1, 1986. The Petitioner did not use the card on any other occasion. The Petitioner testified that he did not use the card because he discovered that it was less costly to acquire the medications he needed from Capital Health Plan. Based upon the evidence presented at the hearing, however, the cost to the Petitioner was the same whether he used the plastic card or Capital Health Plan's pharmacy: $3.00. On or about March 27, 1986 and April 10, 1986, the Petitioner was informed that he had used the card to obtain medications for which use of the card was not authorized. The Petitioner was requested to return the card and to repay the amount incurred for the medications. The Petitioner did not respond to these requests. On August 26, 1986, the Petitioner was sent a letter requesting that he repay the cost of the medications he had acquired with the card. Although the Petitioner was requested to remit $77.02, the evidence only proved that $69.77 of medication was paid for by the State. On August 28, 1986, the Petitioner returned the prescription drug card he had been given to Andrew Lewis, an employee of the Respondent. The Petitioner has not reimbursed the State for the cost of the medication he received. The $69.77 of medications paid for by the Respondent which the Petitioner acquired with the prescription drug card provided to him by the Respondent represents a payment on behalf of the Petitioner which he was not entitled to. The card was for use by state employees participating in the State Plan. As of December 1, 1985, the Petitioner was not a participant in this plan. When considered together, the information provided to the Petitioner should have put the Petitioner on notice as to the type of medical insurance coverage he was generally entitled to receive. In particular, the Petitioner should have known that he was eligible for coverage under the Capital Health Plan, an HMO, and that he was not entitled to coverage under the State Plan as of December 1, 1985. The Petitioner also should have known that the prescription drug card he received was for use of participants by the State Plan only and not participants of the Capital Health Plan. The Petitioner's reliance on the statements of the business manager of the County Public Health Unit where he worked was not reasonable in light of the other information which he had been provided about his coverage and the purpose of the prescription drug card he was sent. The Petitioner is not able to repay the $69.77 owed to the State in a lump sum. The Petitioner can only pay the $69.77 to the Respondent in monthly installments of $10.00 or less.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that the Petitioner pay $69.77 to the Respondent for prescription drugs received by the Petitioner. DONE AND RECOMMENDED this 26th day of February, 1987, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-4111 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they were accepted. Those proposed findings of fact which have been rejected and the reasons for their rejection have also been noted. Paragraph numbers in the Recommended Order are referred to as "RO ." The Petitioner's Proposed Findings of Fact: Proposed Finding RO Number of Acceptance of Fact Number or Reason for Rejection 1 Although the Petitioner did not inten- ionally use the prescription card despite being informed that he was not entitled to it, he should have known that he was not entitled to use it. 2 RO 31. 3 RO 21. 4 Not supported by the weight of the evidence. In light of the information provided to the Petitioner concerning the differences between the State Plan and an HMO, the Petitioner did not use due care to determine if the card was a part of the benefits he was entitled to receive as a participant in an HMO. 5 RO 25. 6 Not supported by the weight of the evidence. Ms. Walker testified that the coverage available to state employees is not confusing. The Respondent's Proposed Findings of Fact: 1. RO 1. 2. RO 2. 3. RO 3-4 and 13-14. 4. RO 15, 18, 21 and 24. 5. RO 21 and 26. 6. RO 27. 7. RO 10. 8. RO 29. 9. RO 30. 10. RO 31. 11. COPIES FURNISHED: RO 36. Gilda Lambert, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens General Counsel Department of Administration 530 Carlton Building Tallahassee, Florida 32399-1500 S. Philip Ford Post Office Box 20232 Tallahassee, Florida 32316
The Issue The issue in this case is whether Petitioner is entitled to health insurance coverage for installation of temporary and permanent dental crowns under Florida’s State Employees’ Group Health Self Insurance Plan.
Findings Of Fact Petitioner claims to suffer from temporomandibular joint dysfunction ("TMJ"). Petitioner is a member of the State Employees’ Group Health Self Insurance Plan (the "Plan"). Respondent is responsible for administering the Plan. Blue Cross and Blue Shield ("Blue Cross") services the Plan for Respondent. The Plan covers medical expenses incurred for the treatment of TMJ. The Plan paid for treatment of Petitioner’s TMJ symptoms on March 25, 1996, and on December 2, 1997. That treatment did not include crowns. Dr. Michael Vallilo is one of Petitioner’s dentists. On May 28, 1998, Dr. Vallilo placed temporary crowns on 14 of Respondent’s teeth and bonded two of her teeth. On May 29, 1998, Dr. Vallilo wrote Blue Cross and requested payment for the temporary crowns. Dr. Vallilo also requested prior approval for permanent crowns at an approximate cost of $14,000 for both sets. Dr. Vallilo requested payment and prior approval based on his opinion that the crowns are reasonably necessary for the treatment of TMJ. The temporary and permanent crowns were necessary for the treatment of occlusion dysfunction. Occlusion dysfunction relates to the fit of the teeth when brought together. Occlusion dysfunction has no correlation to TMJ. Petitioner’s symptoms and medical records are not consistent with TMJ. The diagnosis in Petitioner’s medical records describes oral dyskinesia. Oral dyskinesia involves muscle spasm, limited muscle function, the body’s reaction to the way teeth fit together, and an inability to keep the jaws closed. The diagnosis did not state a cause for the symptoms. Even if oral dyskinesia were caused by TMJ, crowns are not covered by the Plan. Medical reimbursement under the Plan does not cover crowns, bridges, inlays, on-lays, fillings, equilibration of the teeth, or any other procedure that alters the tooth itself and can be performed only by a licensed dentist. The Plan covers only specified treatment for TMJ. Covered treatment includes X-rays, clinical exams, splint therapy, physical therapy, surgical procedures of the joint itself, and other procedures not performed on the teeth. The Plan covers repositioning devices necessary in the treatment of TMJ. Crowns are not repositioning devices. Petitioner had separate dental insurance at the time the crowns were installed in her mouth. Her dental insurance may, or may not, have covered the temporary and permanent crowns. Even if the Plan did not exclude crowns as dental treatment, the placement of crowns for TMJ or occlusion disorder is not covered. Such services are not consistent with applicable standards of good medical practice.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order denying Petitioner's claim. DONE AND ENTERED this 6th day of December 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 6th day of December, 1999. COPIES FURNISHED: Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Carole A. Clark 6325 Highland Gardens Court Lakeland, Florida 33813 Joan Van Arsdall, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
The Issue The issue is whether the Petitioner, Amjad Shamim, is eligible for continuation coverage of health insurance and reimbursement, under the State of Florida Employees Group Insurance Plan, for medical care expenses he incurred after he left state employment.
Findings Of Fact Mr. Shamim became a full-time employee of the Department of Health and Rehabilitative Services (HRS) in September, 1986, and worked at the Palm Beach County Health Department. Effective August 1, 1987, Mr. Shamim was insured with family coverage under the State of Florida, Employee Group Health Insurance Program. His enrollment continued until his insurance termination effective date of January 1, 1989. On November 15, 1988, Mr. Shamim met with Martina L. Walker, Personnel Technician I for HRS at the Palm Beach County Health Department, in connection with his decision to leave the Department's employ on November 18, 1988. At that meeting he executed the documents required by HRS to discontinue his health insurance coverage. As part of that November 15, 1988, conference, Martina Walker informed Mr. Shamim of his rights to continued health insurance coverage after his termination of employment. Mr. Shamim advised Ms. Walker that he no longer needed the State coverage because his new employer offered a health insurance plan to its employees. Ms. Walker, nonetheless, cautioned Mr. Shamim that any pre-existing conditions are usually not covered by new employer policies. Ms. Walker's notification of Mr. Shamim's right to continued health insurance coverage for up to 18 months was not in writing. Mrs. Walker never told Mr. Shamim orally the specifics of continuation coverage, i.e., that he had 60 days to elect continuation coverage from the coverage effective date of January 1, 1989, that his application and premium were required to be postmarked by March 1, 1989; or that he could continue his family coverage for 18 months at monthly premium of $273.01 per month. In addition to disclosures when an employee leaves, all employees of the Palm Beach County Health Department are advised of their opportunity to elect continuation coverage under the State Plan at the time of their employment, by means of a notice furnished by HRS. Mr. Shamim received a general notice of benefits, including the availability of post employment continuation coverage, at the time of his employment. The termination form completed by Ms. Walker was processed routinely, and caused the Division of State Employee Insurance to mail Mr. Shamim written notification by first class mail of the availability of continuation coverage in a letter dated December 1, 1988. Due to the appearance of the handwritten address on the notice mailed to Mr. Shamim, it is more likely than not that this notice failed to arrive at Mr. Shamim's home address. The portion of the address for the apartment number could be read as D201 or 2201, which would account for misdirection of the notice in the mail. Mr. Shamim's claim that he did not receive the notification is accepted. Had the notice been properly addressed and had he received it, Mr. Shamim would have had the opportunity to decide whether to exercise his legal right to continue his health insurance. On January 27, 1989, Mr. Shamim had surgery to his hand. He had been treated for that condition while he was employed with the Palm Beach County Health Department. Because it was deemed to be a pre-existing condition, the expense he incurred of almost $4,000 was not covered under the health insurance policy of his new employer. There is no evidence of the length of time the pre- existing condition exclusion in the policy offered by Mr. Shamim's new employer lasts. Mr. Shamim first notified HRS of his desire for post termination health insurance coverage on September 19, 1989. A second request was made on November 7, 1989. Finding no success with HRS, Mr. Shamim contacted the Respondent on December 29, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered accepting the request of Mr. Shamim for continuation coverage, accepting his premiums and processing his claim. DONE and ENTERED this 11th day of November, 1990, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of November, 1990.
The Issue Whether Petitioner is entitled to coverage under the State of Florida Group Health Self Insurance Plan for dental treatment, as set forth in the Petition. This proceeding arose after denial of a supplemental claim by Petitioner for dental expenses under the State of Florida Group Health Self Insurance Plan. At the hearing, Petitioner presented the testimony of one witness and testified in his own behalf. Petitioner submitted five exhibits in evidence. Respondent presented no witnesses and submitted two exhibits in evidence. Respondent's Proposed Findings of Fact and Conclusions of Law have been fully considered and those portions thereof not adopted herein are considered to be either unnecessary, irrelevant, or unsupported in law or fact, and are specifically rejected.
Findings Of Fact Petitioner Judge Harry Lee Coe, III, of Tampa, Florida, was insured by the Florida Group Health Self Insurance Plan during 1981 and continues to be so insured. (Stipulation) During the month of June 1981, Petitioner had an accident in his home which caused a fracture to his left upper incisor and lower incisor, teeth numbers 9 and 25, respectively. He was treated by Dr. F. A. Priede, D.D.S., in June 1981, for the damage to his teeth. The treatment consisted of crowning the two chipped teeth. The accident also damaged the lateral incisor, tooth number 10, necessitating a root canal procedure by another dentist. Petitioner filed a claim with the Administrator of the State of Florida Employee Group Health Self Insurance Plan, Blue Cross and Blue Shield of Florida, Inc., and received payment in the amount of $321.88. (Testimony of Priede, Coe, Petitioner's Exhibits 1, 3-4) In February 1982, Petitioner fractured tooth number 9 to the extent that it required extraction. Dr. Priede replaced the tooth with a temporary bridge. A permanent bridge was placed in June 1982 replacing tooth number 9 and swinging to tooth number 10 which had been crowned. Although the cause of the fractured tooth number 9 was not established, Dr. Priede testified that it is common for such a weak small tooth to fracture later as a result of the initial damage and treatment to the tooth. (Testimony of Priede, Petitioner's Exhibits 1, 3) The cost of the supplementary dental treatment was in the amount of $400 and a claim was submitted to Blue Cross and Blue Shield of Florida, Inc. for that amount. The claim was denied on the basis that the dental services did not result from accidental injury. Petitioner's counsel requested reconsideration of the denial and enclosed a letter from Dr. Priede to him, dated May 10, 1983, explaining the course of dental treatment. By letter, dated June 3, 1983, he was advised by Blue Cross and Blue Shield of Florida, Inc. that the claim was not timely under the State of Florida Employees Group Health Self Insurance Plan because dental services must be provided within 120 days of the accident unless explanation from the dentist is submitted within that period stating the extenuating circumstances requiring the treatment to be performed over a longer period of time. Petitioner then requested an administrative hearing under Chapter 120, Florida Statutes. (Testimony of Priede, Petitioner's Exhibits 1-5) The contractual provisions of the State of Florida Employees Group Health Self Insurance Plan are set forth in summarized form in a booklet issued by the Department of Administration. Paragraph 23B of the booklet, effective May 1, 1978, provided as follows: 23. LIMITATIONS The following limitations shall apply under the plan. * * * B. Any dental work, dental treatment or dental examinations necessary for the repair or alleviation of damage to an Insured caused by an Accident shall be rendered within one hundred and twenty (120) days of the accident unless a written explanation from the dentist or Physician is submitted stating the extenuating circumstances which would require treatment to be performed over a longer period of time. Such extension must be approved by the Administrator. However, in no instance shall any services be covered unless such services are rendered within one hundred and twenty (120) days of the termination of the Insured's coverage. However, this provision was subsequently changed, as set forth in the booklet, effective July 1, 1982, to require that the dentist's written explanation regarding extended treatment must also he submitted within the 120-day period. (Respondent's Exhibits 1-2)
Recommendation That a final order be entered denying Petitioner's claim. DONE AND ORDERED this 16th day of November, 1983, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of November, 1983. COPIES FURNISHED: Honorable Nevin G. Smith Secretary, Department of Administration Carlton Building Tallahassee, Florida 32301 Alex B. Vecchio, Esquire 620 Twiggs Street Tampa, Florida 32602 Daniel Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301
The Issue The issue at the hearing was whether Petitioner is entitled to a premium refund of her health insurance premium.
Findings Of Fact The Petitioner, Mildred Daw, is a retired State employee. She is enrolled in the State of Florida, State Employees Group Health Self Insurance Plan (the Plan). Prior to retiring, Petitioner amended her coverage in the Plan, changing from single coverage to family coverage. Petitioner modified her coverage so that her husband would be covered under the Plan. Petitioner's husband was under age 65 and qualified for Medicare Parts A and B. Petitioner was not qualified for Medicare coverage. The premium for family coverage was $178.44 per month. Petitioner began paying this amount shortly before she retired in December 1984. By letter dated, July 8, 1985, the Division of State Employees' Insurance notified retirees that: If you are under age 65 and eligible for Medicare Part A and B because of disability, you may now be eligible for Medicare Coordination coverage at the reduced rate. Please notify our office if you are eligible and send a copy of your Medicare card. Your premium will be reduced the month following our receipt of your notice and the copy of your Medicare card. The letter was sent to retirees and made no mention of surviving spouses or that a current spouse, who fit within the Medicare category, could qualify the insured for Medicare Coordination coverage. The Medicare Coordination coverage is the only program that the State offers in which it is the spouse of the insured/retiree who can qualify the insured for new benefits or different coverage. In this case, the different coverage or new benefit was solely a reduction in premium. Otherwise, the benefits under the family coverage and the Medicare Coordination coverage were the same. An ordinary person reading the letter would not have been placed on notice and would not have assumed that anyone other than the retiree was covered by the letter. If Petitioner had immediately elected the Medicare Coordination coverage, her premium would have been reduced by $42.76 a month, beginning with the August 1985, payment. The July 8, 1985, letter was mailed by first class mail to all retired State employees in the Plan. The business practice of the Division is to mail any such letters to the address of the retiree listed with the Division of Retirement and given to the Division of State Employees' Insurance or to the most current address the Division of Employees Insurance has for that particular retiree. In this case, the address which the Division of Retirement would have had on Petitioner in 1985 was her old address in Jacksonville. However, by July 1985, Petitioner had mailed the Division of State Employees' Insurance a change of address card with her new Pensacola address. She did not mail the Division of Retirement a change of address. There is no evidence as to which address the Respondent mailed the July 8, 1985, letter. Without such evidence Respondent is not entitled to a presumption of proper notice when a letter is mailed to a party with the correct address. Petitioner does not remember receiving the July 8, 1985, letter. She would have elected the Medicare Coordination coverage had she been aware of its availability. Petitioner became aware of her eligibility for reduced premiums in October 1987, when she received an informational bulletin from the Division of State Employees' Insurance. The bulletin stated the premium rates for various types of insurance coverage, including the reduced premiums for family coverage with members of the family who are qualified for Medicare benefits. Petitioner telephoned the Division and was instructed by Division personnel to send in a copy of her husband's Medicare card in order to establish her eligibility for the reduced premium. Petitioner sent a copy of her husband's Medicare card to the Division in October 1987. On November 6, 1987, Petitioner requested a refund of excess insurance premiums paid from July 1985, through November 1987. On December 28, 1987, Petitioner was informed by the Respondent that the earliest date a change in coverage could become effective was October 1987, because Petitioner had not applied for a change of coverage prior to that time. Petitioner was awarded an excess premium refund for the premium paid for November coverage. The Rules governing the Plan are found in Chapter 22I-1, Florida Administrative Code. This Chapter generally requires that an employee or retiree perform an affirmative act, by completing an informational form and sending it to the Department, before any change in coverage can be effectuated. The reason for such a requirement is that the Department has no way of knowing the number of eligible employees or retirees, without being supplied that information from the insureds, so that the Plan's administrator can better manage the Plan's funds to provide an adequate amount for the payment of claims. However, competing with this Rule is the Respondent's policy that a retiree who is otherwise eligible for certain benefits, but did not receive any notice of such eligibility is entitled to retroactive benefits. This policy is based on the Division's duty to administer the State's health plan, including notifying retirees of the availability of new types of coverage or benefits. The evidence showed that this policy takes precedence over the Rule when the Division has failed to notify an eligible retiree. In this case the Division failed to notify Petitioner of her eligibility for Medicare Coordination coverage due to her spouse's qualifications. Petitioner is therefore entitled to retroactive benefits beginning July 1985. Since the benefit of the Medicare Coordination coverage is a reduced premium, Petitioner is entitled to a refund of the excess premium of $42.76 a month from July 1985, through October 1987. The refund for that time period totals $1,154.52.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Administration enter a Final Order refunding to Petitioner excess premiums paid to the Department in the amount of $1,154.52. DONE and ENTERED this 18th day of July, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1989. APPENDIX TO RECOMMENDED ORDER CASE NO. 89-301 The facts contained in paragraphs a, b, c, d, e, f, g, h, i, j and k of Petitioner's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs l, m, and n of Petitioner's Proposed Findings of Facts are subordinate. The facts contained in paragraph p of Petitioner's Proposed Findings of Facts were not shown by the evidence. The facts contained in paragraph o of Petitioner's Proposed Findings of Fact are rejected. The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 8, 9, 10, 11 and 12 of Respondent's Proposed Findings of Fact are adopted in substance, in so far as material. The facts contained in paragraphs 13 and 14 of Respondent's Proposed Findings of Fact are subordinate. The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact were not shown by the evidence except for the fact relating to the letter being mailed first class mail. COPIES FURNISHED: Karren Lessard 15 West La Rua Street Pensacola, Florida 32521 Larry D. Scott Senior Attorney Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Andrew McMullian III Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Augustus D. Aikens, Jr. General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue The issue for consideration in this hearing was whether Petitioner was entitled to insurance coverage reimbursement for items claimed as a result of his son's hospitalization at a specialty hospital in April, 1989.
Findings Of Fact At all times pertinent to the issues herein, Petitioner, Claud E. Leiby, was employed by the State of Florida and was a member of the State Group Health Self Insurance Plan. The State of Florida, Department of Administration, Division of State Employees' Insurance, is the state agency responsible for administering the Group Health Self Insurance Plan in Florida. On April 5, 1989, Petitioner's son, Floyd (Chris), attempted to take his own life. Chris is hearing impaired. He is a 22 year old who was, at the time, six months away from earning his Bachelor of Science degree in Computer Engineering Technology at Tampa Technical Institute. Prior to this suicide attempt in April, 1989, Chris had been seen by a psychologist who referred him to a psychiatrist. Chris had previously been seen by a psychiatrist for a drug abuse problem several years before. Approximately two years ago, Chris was admitted to Palms Hospital in Sarasota, an institution covered by the insurance plan in issue. At that time, the hospital represented it would provide an interpreter for the deaf and those other specialized personnel necessary for appropriate treatment of a hearing impaired individual. However, after several days of treatment which were singularly non-beneficial because of the fact that no interpreter was provided and Chris could not lip read, the treatment was terminated and Chris was discharged. The Leibys felt, based on that experience, that appropriate service could or would not be provided at a facility covered by the plan, and as a result, when Chris attempted to take his life on April 5, 1989, did not even attempt to hospitalize him in either of the covered facilities in Sarasota County, Sarasota Palms Hospital or Sarasota Memorial Hospital. Instead, they had him admitted to Horizon Hospital in Sarasota, a psychiatric specialty hospital which is the only hospital in the area providing a program for the psychiatric treatment of the hearing impaired even though they had been advised such treatment would not be covered. Their conclusion as to the lack of availability of other qualified treatment may not have been accurate, however. Dr. Curran, director of mental health services at Memorial indicated that facility could and would provide adequate treatment for the hearing impaired. This is inconsistent with the Petitioner's prior experience. The Leibys felt that due to the suicidal attempt, the situation constituted an immediate crisis. However, after several days of Chris' hospitalization at Horizon, they were advised that their coverage under the state plan would not cover the incurred expenses at that facility. The Plan administrator indicated the Petitioners were not covered because of the terms of the plan which exclude services and supplies provided by a specialty institution. Further, the Division took the position that since Chris attempted to take his own life, and since the plan excludes coverage for services and supplies resulting from an intentional self-inflicted injury, it was "unlikely" reimbursement would be made even if Chris had been admitted to one of the eligible hospitals. Petitioner claims that the Division's interpretation of the rule and the plan provisions constitutes a form of discrimination against the handicapped which is prohibited by federal and state law. After Chris was discharged from Horizon Hospital, he had another episode while at work and was taken to a medical facility in St. Petersburg. After four days, he was released and taken to see Dr. Douglas R. Elliott, a psychiatrist, who was unable to treat him successfully without the services of an interpreter. Dr. Elliott indicated that Ms. Leiby, who acted as an interpreter on the first session, could not continue to act in that capacity, considering the issues that needed to be addressed. In the doctor's opinion, the treatment Chris received at Horizon was both necessary and beneficial. The Plan brochure provided to state employees contains numerous provisions pertinent to this hearing. On Page 3, the definition of a hospital specifically includes a "specialty institution" and at page 9, the section on Limitations (on coverage) indicates, "Payment for inpatient services rendered by a hospital and/or specialty institution while confined for alcoholism or drug addiction, and/or rendered by a hospital while confined for alcohol or drug addiction or mental or nervous conditions, shall be made for not more than thirty-one (31) days of confinement during a calendar year. Specialty institutions are, in the Summary of Benefits section found on Page 6, identified as being permitted for alcohol/drug impaired employees only. In the Exclusions portion, found on pages 11 and 12, services and supplies provided by a specialty institution or residential facility (with the exception of the alcohol/drug treatment for employees) are excluded as are services and supplies provided by a skilled nursing facility for the treatment of an insured for alcoholism, drug addiction, (other than for employees), or mental or nervous conditions. The Plan Benefit Document itself, which was not previously provided to Petitioner, at page 24, defines a "specialty institution" as a "licensed facility providing an inpatient rehabilitation program for the treatment of persons suffering from alcohol or drug abuse or mental or nervous conditions." At Section VII L, dealing with Exclusions, "...services and supplies provided by a specialty institution, except as provided under Section II G, (treatment relating to alcoholism or drug addiction for the employee only), are excluded from coverage." The Division has defined these terms as meaning, in substance, that a specialty institution is specifically excluded except when a covered employee asks approval for entry into such an institution for alcohol or drug addiction. Otherwise, they have been excluded since implementation of the plan in 1972, because of cost. If these institutions were to be included, the additional costs would, according to Mr. Seaton, mean premium rates to the participants would have to be increased. The benefit document, as it exists, was constructed with the assistance of Blue Cross/Blue Shield and other consultants. It was the intent of the Department to provide services that a majority of the employees and their families need. To change the benefit document requires legislative approval. The plan is not intended to deny coverage to the handicapped. An "appropriate" service was available to Chris at the time of his admission to Horizon Hospital in April, 1989 under the state plan. Further, in Mr. Seaton's opinion, since the injury was self-inflicted, even if Chris had been admitted to an eligible hospital, coverage would not have been available. This latter position is unsupportable as an improper interpretation of the relevant provision. To insure cost reimbursement, Petitioner would have had to have a physician admit Chris to an acute care hospital such as Palms or Memorial, and in that case, according to Seaton, the state would have allowed up to 31 days of inpatient service. Seaton indicates that Section 504 of The Rehabilitation Act of 1973, was not considered in determining benefits to be covered. In his opinion, the "majority of employee needs" were covered and handicapped employees are covered to the same degree as non-handicapped employees. Family coverage for an employee does not include provisions to cover special needs of family members. Since treatment for handicapped is covered as a matter of course, no need was seen to make specific provision for handicapped individuals. The limitations, exclusions, or benefits provided are the same for all members and are provided to the handicapped to the same extent as to the non-handicapped. When asked if the patient had been initially admitted to a general hospital and thereafter referred to a specialty hospital as a matter of appropriate medical treatment by a covered provider, would that specialty admission be covered, Mr. Seaton replied, "absolutely not."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Petition for reimbursement for Chris' hospitalization at Horizon Hospital be denied. RECOMMENDED this 24th day of October, 1989, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 24th day of October, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4186 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes on all of the Proposed Findings of Fact submitted by the parties to this case. None submitted by Petitioner: For the Respondent: 1.-5. Accepted and incorporated herein. 6.-7. Accepted and incorporated herein. Accepted. Accepted. Petitioner submitted the hospital bill subsequent to the hearing and after both parties had rested. Respondent moved to strike this evidence but the motion was denied. The amount of the hospital bill is now known, but in light of the Findings and Conclusions is not relevant. Accepted and incorporated herein. Accepted and incorporated herein. Accepted except for last sentence. Petitioner's opinion is based on prior experience. Accepted. This is opinion only. Not a Finding of Fact but a restatement of testimony. The substance of the testimony is accepted, however. Accepted and incorporated herein. 16.-18. Accepted and incorporated herein. 19. Accepted as to lack of discrimination. COPIES FURNISHED: Claude E. Leiby 321 East Lake Drive Sarasota, Florida 34232 Augustus D. Aikens, Jr., Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 A. J. McMullian, III Interim Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue Whether the licensure and eligibility for licensure as an insurance agent in Florida held by Respondent Michael David Garrett should be disciplined based on the allegations of the Administrative Complaint filed against him and, if so, the extent of such discipline.
Findings Of Fact Petitioner is the state agency that is responsible for the regulation of insurance agent conduct and licensure. Respondent is currently eligible for licensure as an insurance agent and is licensed in this state as a life, variable annuity and health agent, life and health agent, and health agent. The Association for Independent Managers (AIM) is an entity that was founded in 1979 for the purpose of providing educational and other services or benefits to a membership base that is comprised primarily of small businesses. In February 2002, Jack Winebrenner, AIM’s chief executive officer, desired to secure health insurance benefits for AIM’s members. On or about February 7, 2002, Winebrenner delivered applications for health insurance and a cashier’s check in the amount of $23,920.77 to Respondent. The pertinent applications were intended to secure health insurance with an entity known as Mutual Service Life Insurance Company and/or an entity known as United States Life Insurance Company. Winebrenner agreed to gather the applications on behalf of AIM and to forward them to Respondent and Respondent’s company, known as Eastwich Re, Inc. Respondent had represented that he was a licensed insurance agent. The identifying number of the $23,920.77 cashier’s check referred to hereinabove that was delivered to Respondent is 381524555. Respondent’s company, Eastwich Re, Inc., had a business checking account at Flagship National Bank (Flagship) in Sarasota, Florida. On February 12, 2002, the $23,920.77 check that Winebrenner had delivered to Respondent was deposited into Eastwich Re’s Flagship account. Respondent was a signatory on Eastwich Re’s Flagship account. Respondent did not secure health insurance from United States Life Insurance Company or Mutual Service Life Insurance Company or any other company for any of the AIM applicants. Respondent did not forward any premium moneys in the year 2002 to United States Life Insurance Company or Mutual Service Life Insurance Company for the purpose of securing health insurance for any of the AIM applicants. Respondent returned only $10,000.00 from the amount that Winebrenner gave to him in the $23,920.77 cashier’s check. Winebrenner testified that he requested several times of Respondent that the full amount ($23,920.77) of the cashier’s check be returned, once it was clear that no health insurance had been secured for any AIM applicants. AIM engaged private counsel to seek return of the entire $23,920.77 amount, but the efforts of private counsel were not successful. No reason was offered for Respondent only returning $10,000.00. On September 19, 1991, Respondent’s licenses and appointments as an insurance agent were surrendered as part of a Consent Order into which he entered with the Department of Insurance. In 1996, Respondent’s application for licensure as an insurance agent was denied. Respondent’s application for licensure was denied based on information “indicating that Respondent transacted insurance in 1992, in violation of the September 19, 1991 Consent Order which resulted in the surrender of all licenses and appointments held by Respondent . . . [and] had the same force and effect as a revocation.” Respondent was again granted a license as an insurance agent in 1997. Respondent was a licensed insurance agent in Florida at the relevant times that are material to the Administrative Complaint that is the basis for the instant action.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Michael David Garrett guilty of violating the provisions of Section and Subsections 626.561(1); 626.611(7), (9), (10), and (13); 626.621(6); 626.9521; and 626.9541(1)(o)1., Florida Statutes. As penalty for these violations, it is recommended that Petitioner (1) revoke Respondent's insurance licenses and eligibility for licensure; (2) that Respondent be required to pay an administrative fine of $20,000.00; and (3) that Respondent be required to pay restitution to AIM for the benefit of the defrauded insurance applicants in the amount of $13,920.77. DONE AND ENTERED this 28th day of June, 2005, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 28th day of June, 2005.
The Issue Whether Petitioner's laser in situ keratomileusis (LASIK) surgery is a covered service for which he is entitled payment/reimbursement under the State of Florida's Self-Insured Group Health Insurance Program.
Findings Of Fact At all times pertinent to these proceedings, Petitioner was a state employee covered under the State of Florida Self- Insured Group Insurance Plan. The provisions of the "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document" applies to the issues herein. The State of Florida's third party administrator, Blue Cross and Blue Shield of Florida denied prior authorization for Petitioner's LASIK surgery. The Division of State Group Insurance, which administers the State Plan, upheld Blue Cross and Blue Shield's denial of prior authorization by proposed agency action letter dated July 11, 2000. Petitioner timely requested a formal hearing. Petitioner proceeded with LASIK surgery without prior authorization. Petitioner here requests that charges for his LASIK surgery be reimbursed by the State Plan. LASIK surgery is a treatment in which part of the cornea of each eye is removed and reshaped to correct myopia (nearsightedness) or hyperopia (farsightedness). Prior to his LASIK surgery, Petitioner suffered from myopia, a refractive disorder of the eyes. Petitioner's myopia was not the result of an accident or cataract surgery. The evidence is unrefuted and substantial that Petitioner experienced difficulty in his job because of his vision. He had difficulty reading multiple computer screens and documents. His difficulty was acute when shifting his gaze back and forth from one computer screen to another or back and forth from a document to a computer screen. Petitioner's employment performance suffered as a result of his vision problems, and he got headaches. Petitioner attributed his difficulty to the inadequacy of his vision, as corrected by glasses. He tried both bifocals and "sophisticated bifocals," but he felt he lost considerable peripheral vision with any glasses. Petitioner consulted with two optometrists, Dr. Douglas Jones and Dr. Thomas Barnard. Prior to the LASIK surgery, Dr. Jones and Dr. Barnard agreed that Petitioner's vision was functionally correct to 20/20, with glasses. However, both suggested that LASIK surgery would be beneficial for Petitioner. Only this information was provided with Petitioner's authorization request to Blue Cross and Blue Shield for prior authorization. Petitioner is 50 years old and had the LASIK surgery approximately two months prior to the formal hearing. Petitioner's ability to function in his job improved after the LASIK surgery. By his testimony at formal hearing, Dr. Barnard testified that one of Petitioner's eyes was not correctable with glasses exactly to 20/20 but was, in fact, "20/20-", which meant that Petitioner may have been able to read most of the letters on the 20/20 line but may have missed one or two of them. Nonetheless, Dr. Barnard agreed that this status or diagnosis is considered functional. Dr. Barnard also testified that any person with myopia is going to have some loss of peripheral vision with the use of glasses, depending on the prescription. Further, he testified that as we age the difficulty in getting a good correction at different distances is just something that people have to put up with after the age of forty. Dr. Barnard has a preference for LASIK surgery over glasses. According to Dr. William Cobb, ophthalmologist, most people with myopia benefit from LASIK surgery when it is successful. The designation of "20/20" vision means that the judgment of acuity of vision is made at a distance of 20 feet. In ophthalmology, all visions are measured by 20/20, which gives a basis for comparison. Glasses can be made to allow for acuity of vision at any stated distance for any specific function. Most people using a computer must have trifocals or special lenses to use with the computer. If trifocal lenses are not adequate, then progressive lenses can be used for multiple focusing distances. In Dr. Cobb's opinion, Petitioner should have been able to obtain glasses to solve his visual problems at specific distances. LASIK surgery corrects vision in the same functional way as glasses, in that it is performed to focus the eyes at one specified distance. The pertinent provision of the "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document" provides: The following services and supplies are excluded from coverage under this health insurance plan unless a specific exception is noted. Exceptions may be subject to certain coverage limitations. * * * 11. Services and supplies for treating or diagnosing refractive disorders (vision errors which can be corrected with glasses) including eye glasses, contact lenses, or the examination for the prescribing or fitting of eye glasses or contact lenses, unless required because of an accident or cataract surgery that occurred while covered by this health insurance plan. This health insurance plan will cover the first pair of eye glasses or contact lenses following an accident to the eye or cataract surgery. The Division of State Group Insurance has uniformly interpreted this provision to exclude any payment for contact lenses, glasses, or LASIK surgery. The only exception to the exclusion is the stated provision for glasses or contact lenses following cataract surgery or following an accident that affected vision. State employees may purchase supplemental insurance that covers vision care and provides reimbursement for LASIK surgery.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, issue a final order determining that Petitioner is not entitled to payment for LASIK surgery and dismissing his petition. DONE AND ENTERED this 11th day of December, 2000, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 11th day of December, 2000. COPIES FURNISHED: Kenneth E. Gesser Apartment D-23 4100 Southwest 20th Avenue Gainesville, Florida 32607 Julie P. Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue Whether Respondents, by refusing to allow consumers to cancel their individual health insurance policies subsequent to the "free-look" period and thereby failing to refund premiums paid, engaged in conduct violative of Subsection 627.6043, Florida Statutes.
Findings Of Fact The parties stipulated that the Petitioner has jurisdiction over Respondents, National States and Penn Treaty, during times material. On June 24, 1993, Petitioner filed a five count administrative complaint against National States alleging that 20 consumers had purchased various types of health insurance policies and that such policy holders requested cancellation of those policies before the expiration date of their policy. The policy holders prepaid the premiums on such policies. National States refused to honor those requests for cancellation and did not refund the unearned premiums remaining on those policies. National States, by its assistant vice president, William O'Connor, advised those policy holders that they were not entitled to cancellation after the "free-look" period and therefore refused to refund any unearned premiums. Policy holders who were denied premium refunds include the following: Alexandrine Austin, Henry M. and Mary Lou Butler, Madeline Goding, William O. and Rowena Haisten, Sebastian N. and Jane E. Imme, Teresa Karl, John F. Killinger, J. Robert Merriman, Nell I. Mooney, Ralph Motta, Kathryn Patterson, Alene R. Smith, and Bernadine Weiss. On June 17, 1993, Petitioner filed a three count administrative complaint against Penn Treaty alleging that certain consumers had purchased various health insurance policies, that the policy holders requested cancellation of those policies prior to the expiration and Penn Treaty refused to honor those requests for cancellation and to refund any unearned premium remaining. Penn Treaty advised those policy holders, by letter, that they could not cancel their policies after the "free-look" period. The policy holders who were denied cancellation and/or a refund by Penn Treaty were Adelbert Gronvold, George and Marie Hutnyak and George F. and Elizabeth M. MacVicar. Health insurance policies do not contain a provision granting the policy holder the right to cancel. Ms. Kitterman, a former employee of Petitioner who has reviewed health insurance policies for over sixteen (16) years, was familiar with such policy forms. She has not seen a provision in an individual health insurance policy which specifically granted an insured the right to cancel a policy midterm. Dr. Solomon, an expert with extensive knowledge concerning health insurance policy provisions or the absence thereof, opined that health insurance policies do not contain a provision dealing with the ability or the right of the insured to cancel or not to cancel their health insurance policy. Finally, Ms. Andrews, the assistant bureau chief of life and health forms for approximately eight (8) years, has also personally reviewed health insurance policy forms. Ms. Andrews supervised the insurance analysts who reviewed such forms and corroborate the testimony of Kitterman and Solomon that such policy forms do not contain a provision addressing the insured's right to cancel. Petitioner has never required an individual health policy form to contain a provision regarding an insured's right to cancel. Although Petitioner does not require such a provision, it does insist that companies refund unearned premiums once an insured files a request to cancel pursuant to Section 627.6043, Florida Statutes. A discussion of the "free-look" period is contained in Rule 4-154.003, Florida Administrative Code, entitled "Insured's Right to Return Policy; Notice". That rule states: It is the opinion of the insurance commissioner that it will be in the public interest and of benefit to all if the person to whom the policy is issued has the opportunity to return the policy if he is not satisfied with it, provided such return is made within a reasonable length of time after receipt of the policy; therefore, each and every company issuing for delivery a disability policy in this state is requested to have printed or stamped thereon, or attached thereto a notice in a prominent place stating in substance that the person to whom the policy or contract is issued shall be permitted to return the policy or contract within ten (10) days of its delivery to said purchaser and to have the premium paid refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason. The notice may provide that if the insured or purchaser pursuant to such notice returns the policy or contract to the insurer at its home office or branch office or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy or contract had been issued. This rule shall not apply to either single premium non-renewal policies or contracts or travel accident policies or contracts. Notices in this Rule 4-154.003 and in Rule 4.154.001 may be combined. (emphasis added) Thus, if a policy is returned during the "free look" period, the company is required to return the entire premium paid. The "free-look" period allows the consumer an opportunity to review the contract for the designated period of time. It allows them to make sure that it was the type of contract they intended to purchase and to review the application that was submitted to the company to verify that the information on it is correct. "Guaranteed renewable" is defined in Rule 4-154.004, Florida Administrative Code, titled "Non-cancellable or non-cancellable and guaranteed renewable policy; Use of Terms." That rule states: The terms "non-cancellable" or "non-cancellable and guaranteed renewable" may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy until at least age 50, or in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. Except as provided above, the term "guaranteed renewable" may be used only in a policy in which the insured has the right to continue in force by the timely payment of premiums until at least age 50, or in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes. The foregoing limitation on use of the term "non-cancellable" shall also apply to any synonymous term such as "not cancellable" and the limitation on use of the term "guaranteed renewable" shall also apply to any synonymous term such as "guaranteed continuable". Nothing herein contained is intended to restrict the development of policies having other guarantees of renewability, or to prevent the accurate description of their terms of renewability or the classification of such policies as guaranteed renewable or non-cancellable for any period during which there may be actually be such, provided the terms used to describe them in policy contracts and advertising are not such as may readily be confused with the above terms. Thus, the term "guaranteed renewable" as defined by Petitioner's rule notably does not contain any prohibitions against an insured's ability to cancel. Both Dr. Solomon and National States expert, E. Paul Barnhart, agreed that the industry meaning of "guaranteed renewable" is that companies guarantee renewability of a health or accident policy but do not guarantee that the rate will remain constant. Guaranteed renewable policies may be cancelled by the company only for nonpayment of premium or for false statements made by the insured in the application. Guaranteed renewable policies can also be cancelled by the company at the terminal point which, for most of National States policy holders, is when the insured dies but, in a few cases, at age 65. Whether a policy is marketed by the company as "guaranteed renewable" is a business decision made by the insurer generally to meet competition. Thus, the insurer, in making the decision to market an insurance policy as guaranteed renewable, waives any right that might otherwise be available to the insurer to cancel or non-renew except those authorized by statute which are, as noted, nonpayment of premium and material misrepresentation. Nowhere in any of the expert's opinions or Petitioner's witnesses is the term guaranteed renewable construed to mean that an insured has also waived the right to cancel a health insurance policy. All health insurance policies are cancellable by the insurer unless the company has chosen to market the policy as non-cancellable or guaranteed renewable which, as noted, may be only cancelled for nonpayment of premium and material misrepresentation. Dr. Solomon's opinion is based on the equitable theory that an insurance company, when it writes a health policy, does not immediately earn all of the premium collected, and the insured is therefore entitled to the unearned premium if he cancels midterm. Mr. Barnhart confirmed that a premium is not totally earned the moment it is collected but that "it's earned over the period of time for which the premium has been paid . . . if someone pays an annual premium, say on July 1, 1993, that annual premium would become earned at a steady rate over the year that follows and become fully earned as of June 30, 1994." When a premium is received for health and accident policies, the company will establish an unearned premium reserve, which is a basic reserve set up as a result of the payment of premiums and represents, at any given point in time, that portion of the premium that remains unearned. Insurance companies are required by law to maintain unearned premium reserves because they have not earned the premium. Unearned premium reserve is typically a section in the balance sheet of a company that is reserved for that purpose of paying back premiums that are not earned, or holding premiums in that account, as a segregated item, until such time as they are earned. Refunds of premiums are made on the basis of either a short-rate or a pro-rata table. Short-rate refunds are for the purpose of returning a portion of the insured's premium in the event that the insured elects to cancel midterm. The insured is penalized for cancelling the policy midterm under the short-term rate table by absorbing some of the company's expenses of underwriting the policy and administrative costs. That is, if the insured cancels an annual policy within one month after which an annual premium has been paid, the insured will receive less than 11/12ths of the advance premium. Pro-rata refunds mean equal distribution which is the refund procedure used when the insurer makes the decision to cancel. Thus, if the insurer cancels an insured's policy that is so cancellable by the insurer in the annual policy example, the insurer would be liable to make a pro-rata refund of premium to the insured which will be 11/12ths of the premium paid. Thus, an insured is not penalized when it is the insurer who exercises its right to cancel any policies which are so cancellable by the insurer. Section 627.6043(2), Florida Statutes, states: In the event of a cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short- rate table last filed with the state official having supervision of insurance with the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro-rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation. (emphasis added) Ellen Andrews, the Department's former assistant bureau chief for life and health insurance forms several years prior to 1989, and in 1989 when the statute at issue was initially rewritten by the Legislature and as it is currently written, was familiar with the development of Petitioner's position as the statute went through renumberings in 1990 and 1992. It was part of Ms. Andrews' duties and responsibilities to assist Petitioner in the interpretation of that statute. It was her ultimate responsibility to be in charge of implementation of that statute. Petitioner's initial interpretation has remained unchanged since the statute was initially reworded in 1989 and moved to its various sections of part 6 of Chapter 627, Florida Statutes. The Department's opinion and decision on the meaning of what is currently Section 627.6043(2), Florida Statutes, is that if the insured cancels a policy midterm, the insured would be entitled to a return of premium pursuant to the short-rate table if one was filed with the Department. The Department further interprets the statute to mean that the insurer has a right to cancel, unless the insurer has waived that right by selling a guaranteed renewable or non-cancellable policy and if an insurer exercises that right, the insurer must make a refund to the insured on a pro-rata basis. Petitioner's position is based on the statutory provision that the insured shall receive a return of premium if the insured cancels and that if the insured didn't have a right to cancel, then the insured wouldn't have a right to receive a refund of premium. In 1989, Petitioner took the initiative to obtain statutory authority for its position by submitting a proposed draft to the Legislature revising the statute in order to provide insureds, by statute, the right to receive a return of the unearned premium upon notifying the insurer of their decision to cancel the individual health insurance policies. Mr. Barnhart verified that there would be no claims incurred once a policy ceases to be in force; that National States refund a portion of the premium when a policy is rescinded or terminated and that National States refunds unearned premiums when an insured dies midterm of the policy period whether required by statute or not. Penn Treaty refunds unearned premiums upon death and has a provision in its individual health and accidental insurance policies which provides that the insured shall receive a refund of unearned premiums upon death. From an actuarial perspective, there is no difference between either death or cancellation in midterm of a policy period by an insured. Penn Treaty sells, in Florida, long term care, home health care and medicare supplement insurance policies. National States generally sells guaranteed renewable policies in Florida. National States' position is that health and accident policies are not cancellable by the insured in Florida and that only medicare supplement policies are cancellable by the insured because there is a provision in the policy that allows an insured to cancel and because there is statutory authority for the insured to cancel that policy. Its position is that Section 627.6043, Florida Statutes, does not provide for cancellation by the insured. However, National States allows that the statutes regarding cancellation under the medicare supplement law, Section 627.6741(4), Florida Statutes, mandates refunds to insureds who request cancellation of their medicare supplement policies. National States allow cancellations by insureds and refunds unearned premiums on health insurance policies in those other states which have statutes requiring such refunds. Likewise, Penn Treaty's position is that home health care and long term care policies are not cancellable by the insured because there is no provision in the contract to allow cancellation and because they are guaranteed renewable policies. Its position also is that the insured does not have the right to cancel, either contractually or statutorily. Respondents relied on legal opinions from their counsel (in Florida) and an opinion from Petitioner dated June 12, 1991 to deny refunds. Florida law addressing an insured's right to cancel a medicare supplement policy is at Section 627.6741(4), Florida Statutes. That section provides, in pertinent part, that: If a policy is cancelled, the insurer must return promptly the unearned portion of any premium paid. If the insured cancels the policy, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro-rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of the cancellation period. (emphasis added) The above statute is the only Florida law which addresses an insured's right to cancel his medicare supplement policy. Florida law requires that medicare supplement policies be guaranteed renewable. That law is found at Section 627.6741(2)(a), Florida Statutes, which provides: For both individual and group medicare supplement policies: an insurer shall neither cancel nor non-renew a medicare supplement policy or certificate for any reason other than non payment of premium or material misrepresentation. Respondents' position is that in Florida, insureds who purchase their policies are elderly and are easily led. If allowed to cancel, Respondents contend that they would lose out on a number of protections that they would be entitled to if they were required to keep their policies.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: Petitioner enter a final order requiring Respondents to make refunds of premiums to all policy holders who request the cancellation of their health insurance policies after October 1, 1989, with 12 percent interest from the date cancellation was requested and further that Respondents' certificates of authority be placed on suspension for a period of twelve (12) months. It is further recommended that the suspension be suspended upon Respondents, payment of the unearned premiums to the above-referenced consumers. 1/ DONE AND ENTERED this 1st day of March, 1995, in Tallahassee, Florida. JAMES E. BRADWELL 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 1st day of March, 1995.
