Findings Of Fact Petitioner is an employee of the State of Florida, and was at all times pertinent, a member of the State Group Health Insurance Program administered by Blue Cross and Blue Shield of Florida, Inc. In March of 1984, Petitioner was hospitalized due to severe indigestion and abdominal pain. Petitioner was discharged from the hospital and informed by his physician that if his condition worsened, surgery would be necessary. Petitioner's condition worsened and on May 28, 1984, his physician, R. Klein Bowen, M.D., admitted him to the hospital with a pre-operative diagnosis of chronic acalculus cholecystitis which is chronic inflammation of the gallbladder. On May 29, 1984, said physician operated upon petitioner and his operative report listed the following under the title "Operation": Cholescystectomy. Attempted operative cholangiogram. Incidental appendectomy. The description of the operative procedure stated in the operative report (Respondent's Exhibit 1) establishes that the appendectomy which was performed was accomplished through the same incision which was made for performing the cholescystectomy (gallbladder removal). The operative report stated that the appendix was not acutely inflamed. Subsequent to the operative procedures the Petitioner filed a claim with the State Group Health Insurance Plan administrator, seeking payment for the following charges: May 28, 1984, $90.00 for consultation and case history preparation prior to surgery; May 29, 1984, $1,350.00 Cholescystectomy; May 29, 1984, $375.00 Appendectomy. All of said services were performed by R. Klein Bowen, M.D. The State Group Health Self-Insurance Plan paid the charge for the cholescystectomy and denied the claims for consultation and case history preparation prior to the surgery and for the appendectomy. The State Self- Insurance Plan justified its denial of Petitioner's claim for the above benefits based upon limitations it alleged were contained in the State of Florida Employees' Group Health Self-Insurance Plan Benefit Document (Respondent's Exhibit 2). Section VIII entitled "Limitations" in paragraph I. specifies that payment may be made for in-patient medical care physician visits in addition to payment for surgery only when the condition which required medical care is not related to the surgery and does not constitute a part of the pre-operative or post-operative care. Additionally, Section VIII, F. specifies that no additional payment shall be made for a surgical procedure which is an incidental procedure performed through the same incision. Petitioner did not dispute the provisions which Respondent alleged were limitations justifying denial of payment, although he asserted that the provisions contained within the Group Health Self-Insurance Plan Benefit Document were not cost effective and would result in additional expenses and lost time from work and were worthy of reconsideration. However, Petitioner did not present any competent evidence to support his claim or refute the limitations relied upon by Respondent.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a Final Order denying the Petition. DONE and ENTERED this 14th day of May, 1985, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of May, 1985. COPIES FURNISHED: Gerald B. Richardson 2909-198 South Semoran Boulevard Orlando, Florida 32822 Richard L. Kopel, Esquire Deputy General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Gilda Lambert, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301
The Issue Whether Petitioner is entitled to receive a refund of insurance premiums paid to Respondent.
Findings Of Fact The Division administers health plans, including COBRA, for the benefit of employees of the State of Florida. Petitioner was an employee of the State of Florida from 1991 until February 11, 2000, which was his last day on the payroll of the Office of the Attorney General. On May 27, 1998, Petitioner was placed on the Temporary Disability Retired List by the U. S. Air Force. He was presented an identification card reflecting his rank as colonel. His identification card reflects that he was eligible for medical insurance. As a retired military person Petitioner was eligible for treatment at a military medical facility or through TRICARE. TRICARE is a comprehensive health insurance program for military personnel. TRICARE may be a primary provider or a secondary provider of health benefits. During his active employment with the state, however, the TRICARE coverage was secondary. This means that the state paid any claims to the extent of its policy limits and the remaining amount of any claim would be processed and paid in accordance with TRICARE coverage. Petitioner was aware that placement on the Temporary Disability Retired List was, as the name implied, a temporary situation. It was his expectation that subsequent to being placed on the list, the U. S. Air Force would determine either that he was disabled to the extent that he would receive disability retirement, and thus continue to be eligible for TRICARE, or that he would be denied disability retirement and would have to arrange for other medical insurance, or do without. During Petitioner's employment with the Florida Department of Legal Affairs, he was covered by the State Group Health Self Insurance Plan. On February 11, 2000, when Petitioner terminated his employment with the Florida Department of Legal Affairs, he was seeking to have the State of Florida declare him disabled. Pursuant to law, Petitioner's entitlement to the benefits of the State Group Health Self Insurance Plan continued until March 31, 2001. Without taking action to secure health insurance, Petitioner would have only TRICARE as an insurer. However, if the state determined him to have become disabled while employed by the state, he would be covered by the State Group Health Self Insurance Plan, retroactively. On May 11, 2000, the Florida Division of Retirement denied Petitioner's application for in-line-of-duty disability retirement benefits. The effect of this determination was to terminate the possibility of coverage under the State Group Health Self Insurance Plan with the reduced premiums available to a person on disability retirement. The Florida Department of Legal Affairs failed to immediately notify the Division that Petitioner had terminated his employment. As a result, the Division did not send Petitioner a Notice of Continuation Coverage Eligibility until immediately after to May 11, 2000. The notice informed Petitioner of his right to have family continuation coverage in return for a premium of $517.96. It further informed him that he had until July 11, 2000, to elect coverage which would be retroactive to April 1, 2000. A second Notice of Continuation Coverage Eligibility, dated May 22, 2000, was sent to Petitioner. This notice similarly informed Petitioner of his right to have family continuation coverage in return for a premium of $517.96 but informed him that he had until July 22, 2000, to elect coverage which would be retroactive to April 1, 2000. The second page of the Notice of Continuation Coverage Eligibility informed Petitioner, inter alia, that coverage would be available for 18 months for voluntary or involuntary termination, 29 months for certain disabled qualified beneficiaries, and 36 months for all other qualifying events. The second page also informed Petitioner that coverage might end on the occurrence of several events. The event asserted to be pertinent to this case is the date the insured becomes covered by another group health plan which does not contain any limitation or exclusion with respect to a pre- existing condition. Petitioner filed a "Continuation of Coverage Enrollment" form dated July 21, 2000. This form noted that the date of the event that precipitated eligibility for coverage was February 11, 2000. Petitioner wrote on the form in his own hand, "I am permanently and totally disabled; I and my dependents am covered under TRICARE at present." At the bottom of the "Continuation of Coverage Enrollment" form, the Division authorized coverage dating back to April 1, 2000. Petitioner sent the Division a check in the amount of $517.96 to cover the initial premium. The date on the check was July 21, 2000. Sometime prior to August 24, 2000, he sent the Division another premium payment in the amount of $517.96. At the time Petitioner filed the "Continuation of Coverage Enrollment" form and submitted the premiums, he was covered by the regular military medical system, because he was considered to be retired by the U.S. Air Force. However, since the question of his disability with the U.S. Air Force had not been decided, he was aware of the possibility that his military health coverage could end at any time. By maintaining a COBRA policy, he was insuring that he would not find himself in a posture where he had neither COBRA nor TRICARE. On August 16, 2000, the U.S. Air Force determined that Petitioner was disabled and was entitled to the medical care provided by law for retired service persons, which includes TRICARE, presumably, for life. It was at this point Petitioner demanded the return of the premium he paid. Petitioner's theory for the refund is that he was, under the law, ineligible for COBRA coverage during the two months that he paid a premium with respect to it. On September 29, 2000, in a letter signed by Ria Brown, Benefits Administrator, the Division reiterated its refusal to refund the premiums and noted that Petitioner was covered under COBRA for the period April 1, 2000, through May 31, 2000. The letter informed Petitioner that, "Based on the information in your letter, you are eligible and entitled for TRICARE Standard coverage, but you did not indicate that you are actually enrolled." Ms. Brown also advised the following: Coverage at time of COBRA event: Section 4980(f)(2)(B)(iv) provides that a qualified beneficiary's right to COBRA continuation coverage may be terminated when the qualified beneficiary "first becomes," after the date of the COBRA election, covered under another group health plan (subject to certain additional conditions) or entitled to Medicare benefits. The final regulations provide that an employer may cut off the right to COBRA continuation coverage based upon other group health plan coverage or entitlement to Medicare benefits only if the qualified beneficiary first becomes covered under the other group health plan coverage or entitled to the Medicare benefits after the date of the COBRA election. Petitioner asserted in a reply, also dated September 29, 2000, that contrary to Ms. Brown's assertion, he was actually enrolled in TRICARE Standard during the operative period. In a letter dated October 3, 2000, Merrill Moody, the Division Director, informed Petitioner that his claim for refund was being denied because he had a contractual relationship with the Division and that he got the product for which he paid-- health insurance coverage for April and May, 2000. Mr. Moody also pointed out that the Division was required under law to allow active employees and their covered dependents, to participate in COBRA, notwithstanding their participation in other programs.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Division of State Group Insurance enter a final order denying Petitioner's request for a refund of $1035.92. DONE AND ENTERED this 19th day of March, 2001, in Tallahassee, Leon County, Florida. HARRY L. HOOPER 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 19th day of March, 2001. COPIES FURNISHED: Julia Forrester, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Morris Shelkofsky 3721 Crawfordville Road, No. 17 Tallahassee, Florida 32310-7074 Cynthia Henderson, 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 The issues concern the question of Petitioner's responsibility to pay additional insurance premiums related to Family I coverage in the State Employees' Group Health Insurance program for the period February 1981 through April 1982, based upon alleged underpayments of required premiums. See Section 110.123, Florida Statutes and Rule 22K-1.20, Florida Administrative Code.
Findings Of Fact According to the Florida law which has application in this dispute, when a husband and wife were employed by separate agencies of the State of Florida, cost of the Family I coverage under the State Group Health Insurance Plan was defrayed by those state agencies. This is as contrasted with the circumstance in which one spouse would be responsible for contributing to the cost of the Family I coverage under the State Group Health Insurance Plan, should the second spouse cease to be employed by the second state agency. The State of Florida, Department of Administration, has she responsibility for administering the State Group Health Insurance Plan, to include collection of necessary premium payments. Both Petitioner and his wife had been reported in the records of the Department of Administration as employed by the Department of Corrections and Department of Health and Rehabilitative Services respectively, as employees entitled to participate in the spouse program for payment of health care, i.e., the program in which no contribution is made by the employees toward payment of health insurance premiums. On October 28, 1982, the Petitioner informed the Department of Administration on a form provided by the Bureau of Insurance of the Department of Administration that his wife, Caroline Wilson, had terminated her employment with Health and Rehabilitative Services effective March 23, 1982. This form was executed in cooperation with the Petitioner's employing agency. The second part of the form related to information to be provided by the wife and her employing agency on the question of her employment was not completed by the spouse nor signed off by her employing agency. A copy of this item or form may be found as Respondent's Exhibit No. 3, admitted into evidence. As a result of information he provided, Petitioner was informed of an underpayment of premiums for the period May 1982 through November 1982, related to his wife's lack of eligibility for contribution from her employing agency and the responsibility of the Petitioner to substitute as payor of those premiums. This referred to the point of departure identified by the Petitioner allowing for a grace month of April 1982, thereby making the period of underpayment May 1982 through November 1982. The amount of nonpayment was $280.06, which was eventually reimbursed by the Petitioner. Subsequently, in January 1984, Respondent, Bureau of Insurance, in an attempt to ascertain why Health and Rehabilitative Services had not contributed the full amount of its share to the insurance related to Caroline P. Wilson in times before March 23, 1982, discovered that the wife, Caroline P. Wilson, had terminated her employment some time before March 23, 1982. As was revealed in the final hearing, the last day of employment with Health and Rehabilitative Services was January 3, 1981. After that date, Mrs. Wilson did not return to her job at the Florida State Hospital in Chattahoochee, Florida, and was eventually considered to have abandoned that job. (It was the first impression of the Department of Administration that she had last been employed in December 1980 and as a consequence this case pertains to the claim of the Department of Administration that there is an underpayment related to the family coverage which starts on February 1, 1981 and runs until April 1, 1982, allowing for a credit of overpayment in the amount of $48.46 for the month of September 1983, leaving a total claimed of $382.64. It is this amount that Petitioner took issue with and requested a timely formal Section 120.57(1), Florida Statutes' hearing to resolve.) Based upon the evidence adduced at the hearing, the date from which the responsibility of the husband to contribute the premiums share no longer being provided by Health and Rehabilitative Services would be January 1981, as opposed to December 1980. Allowing for the grace month of February 1981, the payments would be due for March 1, 1981, through April 1, 1982, allowing credit again for the $48.46 for the month of September 1983, leaving a total due and owing in the way of underpayment of $353.90.
The Issue Whether Petitioner timely notified Respondent, Division of State Group Insurance of a "qualifying status change" (QSC) event, so as to allow Petitioner to cancel her participation in the State Group Health Insurance Program during the Plan Year- 2006. Petitioner seeks a refund of amounts deducted/paid because her insurance was continued.
Findings Of Fact Petitioner has been a covered participant in the Program, authorized by Section 110.123, Florida Statutes, at all times material. As provided in Section 110.123(3)(c), Florida Statutes, Respondent DMS, through its administrative entity, DSGI, is responsible for contract management and day-to-day administration of the Program. DMS has contracted with Convergys, Inc., to provide human resources management services including assisting in the administration of the Program. Convergys performs these tasks in part through an on-line system known as "People First." However, as provided in Section 110.123(5), Florida Statutes, final decisions concerning the existence of coverage or covered benefits under the Program are not delegated, or deemed to have been delegated, by DMS. Section 110.161, Florida Statutes, requires DSGI, as the responsible administrative entity, to administer the Program consistent with Section 125 of the Internal Revenue Code, so that participants will obtain the pre-tax advantages provided by Section 125. One of the federal requirements to maintain the pre-tax status is that the plan's sponsor (e.g., the State of Florida) administer the plans and apply each plan's rules in a manner that does not discriminate and that treats all participants equally. In this case, Petitioner was enrolled in the Health Program Plan Year 2006, i.e. from January 1, 2006, through December 31, 2006. Allowing a Plan member to retroactively cancel her participation during a Plan Year without having properly reported a QSC could put the entire pre-tax program in jeopardy. A QSC is a change in status as listed in the Plan which would allow an employee to cancel or otherwise change participation in the Plan during the Plan Year if requested by the employee within 31 days of the change in status. Converting from full-time to part-time state employment is a QSC event. On April 21, 2006, Petitioner converted from full-time employee status to part-time employee status. Therefore, the QSC event in this case occurred on April 21, 2006, when Petitioner went from being a full-time to a part-time employee. However, in order to effect a change in health insurance coverage, Petitioner was required to request a change in health insurance coverage no later than May 22, 2006. To request a change in health insurance coverage, Petitioner would have needed to contact Convergys in a timely manner, i.e. within 31 days of April 21, 2006. For People First, Convergys maintains a tracking system known as "Siebel," which tracks written correspondence to or from state employees and notes telephone calls between state employees and Convergys associates. Standard business procedure for Convergys is that the telephone logs are not verbatim notations of the conversations, but are a summary of those conversations, including a description of the reason for the call and the action taken by any Convergys associate that took the call. The Convergys policy is that all calls are to be notated. All service associates are trained to note all calls. Convergys employees are trained to make the call notes during the telephone conversation or soon thereafter. A notation is to be made by the Convergys employee in the Siebel system, and a case is opened when the service representative cannot assist the caller or when further action is required. The case notes are also to be recorded in the system. None of the People First, DGS/DGSI, or Convergys records reflect any contact by Petitioner within the 31 days following April 21, 2006, although they reflect several later contacts concerning her complaint that her coverage was not timely cancelled. Petitioner testified that she used her sister's cell phone to telephone People First "after two or three weeks" and that she discussed cancellation of her participation in the state insurance program and flirted with the Black male who answered the phone, but who seemed not to have much experience in the cancellation process. Petitioner was not able to provide the name or position of the person with whom she allegedly spoke or the date or time of her telephone call. The fact that Petitioner testified that she knew that she "had to around the middle or so" of the month to request her change of coverage, illustrates Petitioner's rather loose interpretation of when this alleged call occurred. Petitioner presented no witness or documentation to corroborate her testimony that she had received oral assurances during that phone call to the effect that the change she requested had been completed through People First. Petitioner's representation that the telephone company could not get the phone records of this telephone call due to the passage of time is not credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services enter a final order ratifying its October 13, 2006, denial of Petitioner's requested retroactive cancellation of enrollment in the State Group Health Insurance Plan. DONE AND ENTERED this 19th day of July, 2007, in Tallahassee, Leon County, Florida. S 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 19th day of July, 2007. COPIES FURNISHED: Ericka L. Ledbetter 739 South Shelfer Stree Quincy, Florida 32351 Sonja P. Matthews, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 John J. Matthews, Director Department of Management Services Division of State Group Insurance 4050 Esplanade Way Tallahassee, Florida 32399-0949
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Respondent, Department of Administration, enter a Final Order that Petitioner, Marvin Brownlee, is owed a total of $158.56 under the State of Florida Employees' Group Health Insurance Program consisting of $126.08 of expenditures previously conceded to be eligible coverage but not yet paid, plus $32.48 of expenditures for bed underpads or chucks determined after final hearing to be covered. RECOMMENDED this 10th day of February, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 10th day of February, 1986. APPENDIX TO RECOMMENDED ORDER, CASE NO. 84-0806 Rulings On Petitioner's Proposed Findings Of Fact. Rejected as unnecessary and irrelevant. No items before the effective date of the State's self-insurance program, May 1, 1978, were found to be covered. Covered by Findings 2 through 6. Rulings On Respondent's Proposed Findings Of Fact. 1-2. Covered by Finding 1. Covered by Finding 7. 4-6. To the extent necessary and relevant, covered by Findings 8 through 11. Rejected as not supported by the totality of the evidence; covered by Findings 2 through 6. Covered by Finding 6. Covered by Findings 3 through 6. Covered by Findings 2 and 5. Second sentence specifically rejected as not supported by the totality of the evidence. As found, the specific use of the underpads is to catch and absorb Brownlee's excrement. But they are part of an overall method for control of Brownlee's bowels and, as such, aid in his physical well-being. See Conclusion 3. Rejected. First, it is unnecessary to recite the agency's preliminary decision. Second, there was no evidence of the qualifications of the persons determining that the underpads are not "medically necessary." Third, the determination is not supported by the totality of the evidence. See Findings 2 and 5. (The part on prescription drugs is covered by Findings 3 through 6 and 10.) COPIES FURNISHED: Marvin Brownlee Route 3, Box 581 Havana, Florida 32333 Augustus D. Aikens, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Gilda Lambert Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301
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 the charges contained in the Administrative Complaint, which is the subject of Case Number 01-2295, reflect statements of agency policy which should have been adopted as rules pursuant to Chapter 120, Florida Statutes.
Findings Of Fact The Parties United is a foreign insurer, domiciled in the State of Wisconsin holding a certificate of authority from the Department to transact the business of insurance in this state. It is a wholly-owned subsidiary of American Medical Securities Group, Inc. The Department, through its agency head, the Treasurer and Insurance Commissioner, has regulatory jurisdiction over United in connection with certain matters set forth in the Complaint. The regulatory scheme for out-of-state health insurance companies Health insurance companies operating pursuant to in-state regulatory schemes are subject to oversight regulation of the corporate entity including financial solvency and market conduct. Rates are required to be filed and approved prior to being used in the state. The review process involves a review of the rates to determine if they are reasonable in relation to the benefits provided. In regard to this, the Department has rules which it has adopted pursuant to Chapter 120, Florida Statutes, which it uses to determine the standards and formulae for making that determination. Certain out-of-state health insurers, such as United, are not subject to such stringent regulation. No review of premium rates is conducted by the Department in the case of these insurers, but it would be incorrect to state that they are not subject to regulation by the Department at all. Approximately 40 percent of the health insurance market in Florida is written through out-of-state group arrangements that do not provide policyholders consumer protections afforded to policyholders holding in-state policies regulated by the Department. United is required by Florida law to provide certain types of coverage. United must also ensure that certificates of coverage provided to residents of Florida contain the following language: The benefits of the policy providing your coverage are governed primarily by the law of a state other than Florida. Indent Background At all times pertinent, American Medical Security, Inc. (AMS), was a Florida-licensed administrator authorized to market and administer United's out-of-state group health insurance plans in Florida. AMS, like United, is a wholly-owned subsidiary of American Medical Securities Group, Inc. In May 1993, United, through AMS, filed for approval with the Department pursuant to Section 627.5515(2), Florida Statutes (1993), as an out-of-state group health insurer who would provide policies to be offered through an Alabama entity called the Prescription For Good Health Trust, which was formed primarily for the purpose of providing group insurance. The Department approved this filing. On March 2, 1995, the Department participated by conference call in a Regulatory Task Force of the National Association of Insurance Commissioners. The mission of the task force was to attempt to address a number of problems facing the insurance market. One of the problems discussed was rate protection for consumers when faced with "tier rating" or "tier blocking." The two terms are synonymous and mean, as to group health insurance, reclassifying insureds subsequent to having been initially placed in a class. This practice will be discussed in more detail below. In 1996, United made a filing for the Prescription For Good Health Trust which proposed tier rating. Sometime during 1996, after the Department objected to the filing, United withdrew it. The Department had never seen such a filing previously. United is the only health insurer to assert before the Department that reclassification by movement between classes would be permissible under the Florida Insurance Code. Section 627.6515(1), Florida Statutes, provides that a group health insurance policy issued or delivered outside this state under which a resident of Florida is provided coverage, shall comply with the provisions of Part VII, of Chapter 627, Florida Statutes, in the same manner as health policies issued within the state. Part VII of Chapter 627, Florida Statutes, provides for a comprehensive regulatory scheme for group health insurance. Section 627.6515(2), Florida Statutes, however, sets forth a number of exemptions. Section 627.6515(2), Florida Statutes, provides an exemption for an insurer like United, which provides health insurance through an association formed for a purpose other than that of offering insurance, which provides the language referred to in paragraph 5, supra, on the face of the certificate, and which offers the bundle of coverages provided in Subsection (c). This exemption applied to the Prescription For Good Health Trust. The Department concedes that it has no authority to set premium rates for out-of-state insurers like United. In November 1996, United through AMS, filed with the Department, pursuant to Section 627.6515(2), Florida Statutes, a request for approval of an out-of-state group health insurance policy termed the "MedOne Choice" plan. This plan was to be offered through an Ohio association called the Taxpayers' Network, Inc. (TNI). The association was formed primarily for purposes other than providing insurance. In January, 1997, the filing was accepted by the Department as meeting the requirements of Section 627.6515(2), Florida Statutes. Chapter 96-223, Laws of Florida, created Section 627.6425, Florida Statutes, effective May 25, 1996. When created, the section only addressed the renewability of individual coverage. Chapter 97-179, Laws of Florida, substantially amended Section 627.6425, Florida Statutes, effective May 30, 1997. Subsequent to the amendment, the section addressed certificates of coverage offered to individuals in the state as part of a group policy. This statute, along with Sections 627.6571 and 627.6487, Florida Statutes, implemented the federal Health Insurance Portability and Accountability Act (HIPAA). The basic theory of the HIPAA legislation is that an insurance company cannot simply cancel a health insurance policy without providing other options. On or about September 25, 1998, United, through AMS, notified all Prescription For Good Health Trust certificate holders that the policy forms through which their coverage had been provided were being discontinued, effective as of each certificate holder's 1999 renewal date. Upon discontinuance of the Prescription For Good Health Trust Plans, the only United health insurance plans available in Florida were the MedOne Choice plans offered through TNI. Membership in TNI was available to anyone upon submitting an application form and paying the membership fee. Membership in TNI was a prerequisite to continuance of a persons' health insurance coverage under United's MedOne Choice plan. United guaranteed each certificate holder, upon joining TNI, that upon request, they would be issued coverage under the Classic Benefit Plan (one of the TNI MedOne Choice plans) without regard to their health status. However, there was no guarantee that premiums would not rise. Certificate holders were also advised that if they desired coverage under a MedOne Choice plan other than the guaranteed issue Classic Benefit plan, they could apply for any of the other TNI plans. Only if the applicant met the underwriting guidelines for the plan for which they applied, would they be issued coverage under another MedOne Choice plan. Between October 1998 and early January 1999, United responded to questions and concerns raised by the Department about the decision to discontinue the Prescription For Good Health Trust plan, and whether the plan of discontinuance was in compliance with Section 627.6425, Florida Statutes. Specifically, discussions were had concerning the movement of insureds from the class in which they were originally assigned to another class at the time of renewal. United entered an agreement with the Department on January 14, 1999, whereby United would offer to certificate holders an additional guaranteed issue TNI plan and would cap the rate for the guaranteed issue plans at no more than twice the premium then currently being paid for the discontinued Prescription For Good Health Trust plan. In accordance with this agreement, United notified certificate holders of the additional guaranteed issue option available to them. Later in 1999, United discontinued the trust plan in accordance with their agreement with the Department. During the process of discontinuance, no certificate holder requested conversion coverage under Section 627.6675, Florida Statutes. Section 627.6675, Florida Statutes, provides that an insured may assert his or her right to a "converted policy," which provides for certain health insurance continuation rights. The Department determined that United's rate for the conversion policy, pursuant to the agreement, was within 200 percent of the standard risk rate and that the notice of the conversion privilege was contained in the certificate of coverage issued to Florida residents. Thus, the Department concluded that United was in compliance with the agreement of January 14, 1999. On May 19, 1999, a Department letter informed a consumer that the discontinuance of her coverage by United did not mean she was being discriminated against because the policy had been terminated for all members. The letter further recited that the Department did not have the ability to regulate United because it was not domiciled in Florida and her insurance was being provided to a group, referring to TNI, that was not registered in Florida. On July 27, 1999, a Department letter informed a consumer that United had an obligation to offer a replacement policy but that United had the right to underwrite the policy and charge additional premium. This statement also referred to TNI. Section 627.6425(1), Florida Statutes, provides that "except as otherwise provided in this section, an insurer that provides individual health insurance coverage to an individual shall renew or continue in force such coverage at the option of the individual." For the purpose of the aforementioned Section, the term "individual health insurance" means health insurance coverage, as described in Section 627.6561(5)(a)2, Florida Statutes, offered to an individual in the state, "including certificates of coverage offered to individuals in the state as part of a group policy issued to an association outside this state. " As noted earlier, Section 627.6425, Florida Statutes, is one of the statutes enacted in Florida which implemented HIPAA. HIPAA provides for continuation of health insurance of an insureds health policy but does not limit the premiums which an insurer can charge for coverage. Although Section 627.6425, Florida Statutes, does not have the words "guaranteed renewable" contained within the statute, the gist of the statute is that if a person has a health policy, the person has the right to continued coverage. The Department contends that the statute also means that there can be no reclassification or movement between classes at the time of renewal. On March 30, 2000, the Department notified United that it believed the discontinuance of Prescription For Good Health Trust plan, in accordance with the January 1999 agreement, may have violated Section 627.6425, Florida Statutes. A Department publication dated January 4, 2001, entitled, "The Florida Health Insurance Market, Issues and Possible Market Reform Measures," noted that there are "an increasing number of carriers attempting to establish HIPAA eligible individuals as a separate rating class with premium charges ranging from 300 to 500 percent of standard rates. While the Department has found such a rating practice to be in violation of the Florida Insurance Code, many carriers have continued to protest this interpretation. Carriers contend the surcharge practice is both actuarially sound and interpreted as a HIPAA permissible practice by other states." In the 2001 legislative session, the Department sought additional regulatory authority concerning out-of-state group insurers, such as United, along with numerous other changes to the Florida Insurance Code which are unrelated to the issues addressed in this Order. The Florida Legislature failed to approve the requested legislation. Tier rating When a group health policy is underwritten, the members of the group may be divided into classes. The classes are based on risk, which is a function of the probability of claims and the cost of claims. Classes may be denominated, for example, as preferred, manual, and substandard. Very healthy persons are put in the preferred class and pay lower premiums relative to other classes. Average persons are put in the manual class because the likelihood and cost of claims may be average. Persons who for actuarial reasons are determined to have an above-average likelihood of claims and whose claims are apt to be costly, are placed in the substandard class. It, perhaps, goes without saying that the individuals in the substandard class must pay higher premiums for the same coverage as others in the group. If the group health policy is guaranteed renewable, certificate holders may continue their coverage. However, premiums within a class can be increased. It is general industry practice to increase the premiums by class when the time for renewal occurs, if the loss experience is such that there is a requirement to increase premiums. As earlier noted, the Department asserts that only by raising premiums for an entire class may premiums be raised. The Department insists that this requirement is part of the definition of "guaranteed renewable." It became United's practice to move insureds between classes. Therefore, for instance, if a person in the group who had been a member of the preferred class experienced the need for costly medical services, then that person might be moved to the manual or substandard class. This would inevitably result in that person paying an increased premium. On the other hand, a person in the substandard class, who was subsequently determined to be a good risk, might be moved to the preferred or manual class and experience reduced premiums as a result. When a substandard class becomes populated with persons who cause the payment of costly claims, premiums increase within that class. Premiums may increase to the point where persons egress the plan, which leaves the class with fewer and sicker members. Eventually, under such a plan, there will be no members, because the premiums will inflate to the point that the benefits, in relation to the amount of the premium, will render the plan uneconomical. This sequence of events is often referred to as the health insurance "death spiral." One of the asserted evils which the Department seeks to combat in the Complaint is the "death spiral." HIPAA eligibles In 1996, when HIPAA became law and Florida enacted laws to implement it, a practice sometimes referred to as "rating up" occurred among some carriers in the industry. As noted earlier, HIPAA and the state statutes implementing it, guarantee that an individual, who through no fault of his own, loses his or her group health insurance coverage has the opportunity to obtain substitute health insurance. A person in this category is referred to as HIPAA eligible. Companies providing insurance under these laws are cognizant of the fact that persons in good health generally decline to purchase this type of insurance but that persons who are in bad health, and who will, therefore, likely have costly claims, will purchase it if they can afford it. This results in a desire on the part of insurers, to charge higher premiums for HIPAA eligible persons than they might charge persons in a comparable, non-HIPAA plan. It is a permissible underwriting practice to take into consideration age, health, and a myriad of other actuarial considerations when developing premium rates for HIPAA eligibles. If an insurer factors in the knowledge that unhealthy persons are more likely than healthy persons to obtain a policy based on HIPAA and charge higher premiums as a result, then "rating up" occurs. The Department contends in its Complaint that "rating up" is discriminatory and, therefore, forbidden by the Unfair Insurance Trade Practices Act (UITPA), Section 626.951, et seq., Florida Statutes. United allegedly arrives at rates for HIPAA eligibles solely based on the fact that the individuals are HIPAA eligible which if true, would be "rating up." Immediately prior to April 30, 1998, the Department received a memorandum from the federal Health Care Financing Administration addressing three general problems with insurance practices regarding HIPAA eligibles. One of the three problems addressed in the memorandum was the practice of "rating up." In response, the Department issued Informational Memorandum 98-103M on April 30, 1998, addressing the three problems. The Department announced that it had concerns similar to that of the Health Care Financing Administration, and would address them in administrative rules implementing HIPAA and Chapter 97-179, Laws of Florida. However, no rules addressing these concerns have been adopted. Insurance carriers disagree with the Department as to whether "rating up" is unfairly discriminatory and therefore a violation of the UITPA. The Department is addressing these differences on a case-by-case basis in the course of market conduct examinations. The evidence adduced at the hearing did not elucidate exactly what "addressing these differences on a case-by-case basis in the course of market conduct examinations" means. Count Three in the Complaint represents the first time an administrative action has been brought against an insurer addressing this practice. The definition of guaranteed renewable Chapter 4-149, Florida Administrative Code, is entitled "Filing of Forms and Rates for Life and Health Insurance." Rule 4-149.006(4)(o)3, Florida Administrative Code, provides for a definition of "guaranteed renewable." However, Chapter 4-149, Florida Administrative Code, does not address out-of-state group health insurers, such as United, because the Department has no authority to require the filing of forms and rates in the case of out-of-state health insurers like United. A life and health insurance treatise written by Black and Skipper states that the definitions of the categories of renewable health insurance policies are not uniform among the states. It is the Department's position that Section 627.6425, Florida Statutes, applies to out-of-state trusts, such as United's Prescription For Good Health Trust, even though the word "trust" is not used in the statute. It is apparent that if there is no limit on the amount of premium a health insurer can charge at the time of renewal, a guarantee of renewal can be meaningless. This fact is ameliorated by rate-setting in the case of highly regulated health insurers such as domestic insurers. In the context of this case, it is not the renewability of a policy that is the gist of the problem. Rather, it is whether rates can be increased on persons through the movement of insureds from one class to another. The allegations of the Complaint In order to determine which statements are alleged to be unadopted rules, it is necessary to refer to Counts Two through Seven of the Complaint. These counts will be summarized, in seriatim. Count Two alleges that persons who continued their participation in TNI were unlawfully and unfairly discriminated against because some members were reclassified based on their health status present at that time (1999), rather than being retained in the class in which they resided when the policy was initially issued. The Petition alleges, inter alia, that this practice violated Section 626.9541(1)(g)2., Florida Statutes, which is a section in the UITPA. This statement is alleged in the Petition to be a statement of general applicability. Count Three alleges that all of those individuals formerly covered through the Prescription For Good Health Trust who were at the time of their discontinuance HIPAA eligible, were, arbitrarily and without regard to health status, assigned a premium rate of either three or five times the base rate for TNI as a whole. Count Three alleges that this assignment unfairly discriminated against the HIPAA eligible individuals who were of the same actuarially supportable class and essentially the same hazard. Count Three further alleges, inter alia, that this violated Section 626.9541(1)(g)2., Florida Statutes. This statement is alleged in the Petition to be a statement of general applicability. Count Four alleges that the enactment of Section 627.6425, Florida Statutes, in 1996, as amended in 1997, statutorily determined that the Prescription For Good Health Trust plan was "guaranteed renewable" as that term is used and understood in the insurance industry. It further alleged that the term "guaranteed renewable” means that once an insurer classifies an individual as a member of an actuarially supportable class for rate and premium applicable to the specified coverage, that individual may not thereafter be charged a premium which is different from any other member of the same class and cannot be moved to another class. The complaint states that United unlawfully moved insureds from one class to another. Count Four additionally alleged that when United discontinued the Prescription For Good Health Trust, the prerequisite for individuals to obtain renewed health insurance coverage was reclassification of some of those individuals to different actuarially supportable classes based on their health status then pertinent to those individuals. It was further alleged that higher premiums were charged to approximately 70 percent of those who renewed or continued, and that premium increases of 200 percent to 300 percent were experienced. Count Four asserted that Section 627.6425(3), Florida Statutes, prohibits such reclassification. Count Four also alleges, inter alia, that this violated Section 626.9541(1)(g)2., Florida Statutes, because such reclassification was discriminatory. This statement is alleged in the Petition to be a statement of general applicability. Count Five alleges that on the one year anniversary of renewal with TNI, United unlawfully reclassified additional individuals which resulted in a premium increases of up to 60 percent. Count Five alleges, inter alia, that this violated Section 626.9541(1)(g)2., Florida Statutes, because this action was discriminatory. This statement is alleged in the Petition to be a statement of general applicability. Count Six alleges that within the tier blocks described in Count Two, United unlawfully established numerous sub- classifications based on health related factors pertinent to each individual within that class. It is alleged in the Complaint that these sub-classifications resulted in individuals within the same class being charged a different premium than are other members of the class. Count Six alleges, inter alia, that this violated Section 626.9541(1)(g)2., Florida Statutes, because this action was discriminatory. This statement is alleged in the Petition to be a statement of general applicability. Count Seven alleges that United used a point debit system where an arithmetic number of points are assigned to a corresponding health hazard. The higher the cumulative debit score, the higher the premium. United will decline to insure at all if the cumulative debit score gets sufficiently high. Count Seven alleges that the assignment of points with no criteria for decision-making results in arbitrary and discriminatory point scores. Count Seven alleges, inter alia, that this violated Section 626.9541(1)(g)2., Florida Statutes. This statement is alleged in the Petition to be a statement of general applicability. In summary, the three statements alleged to be rules are: Practicing tier rating is discriminatory and violates the UITPA. Placing HIPAA-eligible individuals in a premium classification solely on the basis of their HIPAA eligible status is discriminatory and violates the UITPA. The term "guaranteed renewable" prohibits the classification of individuals in a health insurance group at a time other than at the inception of coverage.
The Issue Whether the Petitioner was entitled to enrollment for his son in the State of Florida Group Health Self Insurance Plan for the January 1, 2008, to December 31, 2008, plan year and, if so, whether he is entitled to reimbursement of $543 for student health insurance coverage that was added to his son's college tuition bill.
Findings Of Fact Petitioner, Bashere Bchara, has been employed by the Florida Department of Transportation for the past 9 years including the period October 2007 through December 2008. He is and was, on all relevant dates, entitled to state employees’ benefits, including participation for himself, his spouse, and eligible dependents in the State Group Health Insurance Program. On October 16, 2007, during the open enrollment period, the Petitioner accessed his state employee benefits from his computer to change his dental coverage, as he was required to do because of a change in State providers. Mr. Bchara believes that an error in the People First computer program, that is used to manage state human resources data, caused his son, Dani Bchara, to be removed from health insurance coverage as his dependent. He also said it was his first time using the computerized People First program to elect or change benefits. There is no dispute that Dani Bchara, who had been covered during the previous plan year, continued to be an eligible dependent. Mr. Bchara's witness, Michael Smith, testified that he too had problems trying to use People First to change dental plans. He found the People First computer screens confusing and disorganized. Dani Bchara was, at the time, a 22-year-old college student. As a part of his tuition and fees, Florida State University charged his account $543 for health insurance. In May 2008, after a claim for reimbursement for health expenses for Dani Bchara was rejected, Mr. Bchara, contacted plan insurer, Blue Cross Blue Shield; plan contract administrator, People First; and then Respondent, the Department of Management Services, Division of State Group Insurance (Respondent or DSGI). DSGI has the responsibility for administering the insurance program. See § 110.123, Fla. Stat. (2008). After reviewing his complaint, Sandi Wade, a benefits administrator for DSGI, notified Mr. Bchara that his son was not covered by the state health plan. She also determined that he could not add his son, at that time, due to the absence any qualifying status change, as required by federal and state law. There is no allegation nor evidence of a qualifying status change that would allow the addition of Mr. Bchara's son to his coverage. Ms. Wade was not aware of any other reports of possible computer glitches of the type Mr. Bchara believes he experienced during the open enrollment period in October 2007. James West, a manager for People First testified that, during the enrollment period in October 2007, computer screens for health insurance and dental insurance were entirely different. Each was displayed only after the appropriate tab was chosen. In addition, Mr. West noted that a "summary last step" had to be chosen and the final summary screen allowed employees to view changes from all prior screens before selecting the option to "complete enrollment." Mr. West examined logs of computer transactions on October 16, 2007. The logs showed that Mr. Bchara, using his People First identification number changed his health insurance by deleting coverage for his son. Mr. West reviewed correspondence logs that indicated that Mr. Bchara was sent a notice dated October 27, 2007, confirming the changes he had made to his benefits. The notice was sent from the Jacksonville service center of Convergys, the contract operator of the People First system, to an address that Mr. Bchara confirmed was correct. Mr. Bchara testified that he did not receive the letter. Mr. West testified that the letter was not returned, as confirmed by an electronic tracking system for mail. Scott Thompson, Director of Application Development for Convergys, testified that his records also show every time Mr. Bchara logged into the People First system using his identification number and password. The logs also show that his health plan was changed when he accessed the system on October 16, 2007. Based on the evidence in the computer records and logs that Mr. Bchara, albeit unintentionally, deleted coverage for his son in the group health insurance program, there is insufficient evidence of computer or human error attributable to Respondent. In the absence of sufficient evidence of any errors by DSIG or its agents, or any evidence of a qualifying status change in Mr. Bchara's employment or his family, DSIG correctly rejected the request for retroactive enrollment of his son in the state group health insurance.
Recommendation Based on the foregoing, it is recommended that the Respondent enter a final order denying Petitioner, Bashere Bchara, retroactive health insurance coverage for an additional dependent under the state plan for the 2008 plan year. DONE AND ENTERED this 16th day of January, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 16th day of January, 2009. COPIES FURNISHED: Sonja P. Matthews, Esquire Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 Bashere Bchara 10178 Southwest 53rd Court Cooper City, Florida 33328 John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue The issue to be resolved in this proceeding concerns whether the Petitioner, as beneficiary of her deceased father's State of Florida life insurance policy, is entitled to a benefit of $10,000 or $2,500, and is related to how notice of a change in coverage amount and premium was provided to the decedent.
Findings Of Fact At the time of his death on November 29, 2008, Maurice Adkins was covered by the state life insurance plan, as a retired employee of the State of Florida. The Petitioner, Justina Mullennix, is the daughter of Mr. Adkins and is the beneficiary of any life insurance benefits paid or payable from the state life insurance plan on account of the death of her father. Effective January 1, 2000, the coverage for retirees was increased to $10,000.00. The premium for this coverage was $4.20 per month. The DSGI prepared a letter dated July 31, 2006, to notify the retirees that effective January 1, 2007, the life insurance benefit options provided to retirees would change. The changes allowed retirees to elect one of the following options: $2,500 benefit for a monthly premium of $ 4.20. $10,000 benefit for a monthly premium of $35.79. Termination of coverage. The letter dated July 31, 2006, informed retirees that their life insurance premium would remain the same, but that their coverage would be reduced to $2,500, unless they elected coverage in the amount of $10,000 and elected to pay the higher premium. The letter advised the retirees they could change their election up to and including January 19, 2007. Mike Waller, an employee of the DSGI, maintains benefits data for the People First/Division of State Group Insurance. In July 2006, Mr. Waller was asked to prepare a file containing the names and mailing addresses of all retirees who were covered by life insurance. Mr. Waller created the file, prepared in July 2006, to use in a "mail merge," to send all retirees a copy of the letter dated July 31, 2006. In preparing the file containing the mailing addresses of retirees covered by life insurance, Mr. Waller used the addresses of record that he maintained. In July 2006, the address of record for Mr. Adkins was 2877 Belair Road E., Jacksonville, Florida 32207, and was included in the file. Mr. Waller prepared the file and on July 3, 2006, delivered it to Dick Barnum and Thomas Lockeridge. Thomas Lockeridge delivered the file to Laura Cutchen, another employee of the DSGI. The DSGI contracted with Pitney Bowes to mail the letter of July 31, 2006, to all retirees. After obtaining copies of the letter from the print shop of the DSGI, Ms. Cutchen delivered the letters and the file containing names and addresses of retirees to Pitney Bowes to assemble. The letters dated July 31, 2006, in envelopes addressed to each retiree who carried life insurance at the time, were delivered to the U.S. Post Office, accompanied by Ms. Cutchen. The State of Florida first class mailing permit had been applied to each envelope. The letter dated July 31, 2006, was mailed to Mr. Adkins at the Belair address. The return address on the envelope containing the letter was the Division of State Group Insurance, 4050 Esplanade Way, Ste. 215, Tallahassee, Florida, 32399-0949. The letter was not returned to the Division. The letters that were returned to the DSGI were processed by Janice Lowe, an employee of the DSGI. Each letter that was returned to the Division of State Group Insurance was handled in one of two ways: a) if the envelope showed a different address on a yellow sticker applied by the US Postal Service (USPS), the letter was re-mailed to that address; b) if the returned envelope did not provide a different address, a manual search of the database of the Division of Retirement was made, a copy of the print screen showing the address in the Retirement database was made, if different from that on the database of the Division of State Group Insurance, and the original envelope and letter were placed in another envelope and mailed to the address from the Division of Retirement database. A copy of each Retirement screen that was accessed by Ms. Lowe was printed and inserted in alphabetical order in a binder. For every person whose letter was returned, and for which there was not another address, there would have been a Retirement print screen. The absence of a Retirement print screen indicates that the initial letter was not returned. There is no retirement print screen for Mr. Adkins, indicating that the letter to him dated July 31, 2006, was not returned to the DSGI. DMS has contracted with Convergys, Inc., to provide human resources management services, including assisting in the administration of employee benefits. Convergys primarily performs these tasks through an on-line system known as “People First.” Prior to Convergys assuming responsibility for the administration of benefits, DSGI maintained benefits information in the Cooperative Personnel Employment System (COPES). When Convergys assumed responsibility for the management of benefits, the benefits information from COPES was imported into the Convergys People First System. People First became the system of record for the DSGI beginning January 1, 2005. People First and the Division of Retirement do not share databases and each maintains its own database of names and addresses. Once a year the DSGI must hold Open Enrollment for the health program. § 110.123(3)(h)5, Fla. Stat.; Fla. Admin. Code R. 60P-1.003(16). Open Enrollment is the period designated by the DMS during which time eligible persons may enroll or change coverage in any state insurance program. Prior to Open Enrollment each year, the DSGI provides employees and retirees a package that explains the benefits and options that are available for the next plan year. The 2006 Open Enrollment period, for the 2007 Plan Year, ran from September 19, 2006, through October 18, 2006. During open enrollment for Plan Year 2007, the People First Service Center was charged with the responsibility of sending open enrollment packages to State of Florida retirees and other employees. People First mailed Mr. Adkins’s Open Enrollment Package to the 2877 Belair Road E., Jacksonville, Florida 32207 address, on September 3, 2006. The Open Enrollment Package for Plan Year 2007 was mailed by People First through the U.S. Post Office, first class postage paid. The Open Enrollment Package mailed to Mr. Adkins, for 2006 Open Enrollment, was not returned to People First. The Open Enrollment Package mailed to Mr. Adkins on September 3, 2006, contained Mr. Adkins’s 2007 Benefits Statement; a letter from John Mathews, former Director of the DSGI; "Information of Note"; a Privacy Notice; Notice Regarding Prescription Coverage; and a 2007 Benefits Guide. The Information of Note included the following statement: Retiree Life Insurance For Plan Year 2007, those currently enrolled with retiree life insurance may elect to retain the current $4.20 premium for a benefit of $2,500, retain the current benefit of $10,000 for a premium of $35.79, or cancel coverage. If no change is made during open enrollment, participation will continue at the $4.20 premium level. Neither Mr. Adkins nor anyone on his behalf affirmatively elected to continue $10,000.00 in life insurance coverage during the enrollment period in 2006 and 2007. Because the election was not made, at the death of Mr. Adkins, the benefit paid to the Petitioner was $2,500.00. Prior to January 1, 2007, the Life Insurance Trust Fund was used to augment the premiums paid by retirees for life insurance. The premium paid by the retirees did not support a $10,000 coverage level. In year 2006, the DSGI determined that the money in the life insurance trust fund, used to augment the retiree’s benefits from years 2000 through 2007, would not be available after 2007. Beginning January 1, 2007, the change in life insurance coverage was made because the funds in the Life Insurance Trust Fund were no longer available to augment the premium payment required to maintain a benefit level of $10,000.00, for a payment of $4.20 per month by the retirees. In 2006, the DSGI determined that the then-current life insurance premium of $4.20 would support a benefit of $2,500, and that the $10,000 benefits would cost $35.79. The notices provided by the July 31, 2006, letter and the 2006 Open Enrollment Package were sufficient notices of the increase in premium in that they provided a reasonable opportunity within which to make a selection of the level of coverage. On December 30, 1997, the Division of Retirement received a written notice of change of address for Mr. Adkins. The new address was 217 Skye Dr. W, Jacksonville, Florida 32221. Although Mr. Adkins had changed his address with the Division of Retirement, he did not notify the DSGI. A change of address with one division does not automatically change addresses in the other. The two divisions have different databases. During no time relevant to these proceedings have the two divisions shared databases. The DSGI, through People First, used the database of the Division of Retirement to send the 2004 Benefits Statement as an experiment to determine whether DSGI undeliverable returns would decrease. The same database was also used for the mailing of the letter dated September 2, 2003. However, neither DSGI nor People First changed its database after the 2004 Benefits Statement was sent and subsequent information was mailed to the DSGI address of record, based upon the COPES system. Therefore, the letter dated July 31, 2006, and the 2006 Open Enrollment Package for the Plan Year 2007, were mailed to the same Belair address, the address of record. A change of address for Mr. Adkins was not made in the database of the DSGI until December 1, 2008, when People First was provided a change of address. The only change of address that the Petitioner has alleged, was the one provided by Mr. Adkins to the Division of Retirement (only) in 1997.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings of the parties, it is RECOMMENDED that a Final Order be entered by the Department of Management Services, Division of State Group Insurance, dismissing the petition in its entirety. DONE AND ENTERED this 22nd day of January, 2010, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 22nd day of January, 2010. COPIES FURNISHED: Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Justina Mullennix 1217 Skye Drive West Jacksonville, Florida 32221 John Brenneis, General Counsel Division of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
