Findings Of Fact At all times material to this case, and at the time of the hearing, Gary Lee Baker ("Respondent") was licensed in Florida as a life and variable annuity agent, health and variable annuity agent, life agent, life and health agent, general lines agent, and health agent. The Respondent was a stockholder and officer in the "Murdock Insurance Agency, Inc.". Pete and Debi Valencia are the owners of the "Growing Concern," a floral shop. In 1991, the Growing Concern had obtained workers compensation (WC) coverage through Allstate Insurance. According to the Allstate policy, the coverage was effective from July 18, 1991 to July 18, 1992. The premium for the policy was $1,235.00. As of November, 1991, Mr. Valencia believed that Allstate Insurance was going to terminate his WC insurance coverage. The belief apparently was based on local gossip. There is no evidence that, absent payment of premium, Allstate intended to cancel the Valencia's WC insurance coverage prior to the expiration date set forth in the policy. Mr. Valencia contacted the Respondent, who was a business acquaintance of Mrs. Valencia, to discuss WC coverage. At the time of the initial meeting, Mr. Valencia offered to place all his insurance business with the Respondent if the Respondent could obtain satisfactory WC insurance rates for the Valencia's business. Mr. Valencia provided a copy of the then-current Allstate policy to the Respondent. Based on information provided by Mr. Valencia, the Respondent completed portions of a WC insurance application on behalf of Growing Concern on November 21, 1991. The application was to be submitted to the National Council of Compensation Insurance (NCCI) Atlantic Division upon receipt of additional information from Mr. Valencia and upon the lapse of the Allstate coverage. Among the information required by the NCCI was a copy of a Growing Concern quarterly tax filing (Form 941) from Mr. Valencia. The form is used by NCCI to verify the Growing Concern payroll, the basis of calculation of the WC premium. Pursuant to this meeting, Mrs. Valencia provided a check dated November 21, 1991, numbered 3737, for $360.00 as an initial payment on the WC premium. The Respondent deposited the check into his trust account and awaited receipt of the additional documentation. By January, 1992, the Respondent had not received the additional information. He contacted Mr. Valencia to obtain the copy of Form 941 and to obtain an additional premium payment of $121.00. On several occasions during January and February, 1992, the Respondent and his assistant attempted to contact Mr. Valencia to obtain the premium payment and information. Neither the information nor the payment was forthcoming. On March 8, 1992, Mrs. Valencia submitted a check numbered 3948 for $121.00 as payment of the additional premium. However, the Valencia's still failed to submit a signed copy of the Growing Concern's most recent Form 941. Although the Respondent assumed that the application would be rejected for the failure to include all the required information, the Respondent submitted the application on March 31, 1992 (without the required Form 941) to NCCI. A check on the account of Murdock Insurance Agency dated March 31, 1992, numbered 144, for $962.00 accompanied the application as payment of the premium due at that time. Although he had yet to collect such an amount from the Valencias, he believed their relationship was such that he could "front" the premium payment on their behalf. By letter dated April 24, 1992, NCCI informed the Respondent that the application would not be processed without the form which would permit verification of the payroll. On May 20, 1992, Mr. Valencia provided a signed copy of the Form 941 to the Respondent. By letter dated May 26, 1992, NCCI informed the Respondent that an additional premium payment of $423.00 was required. The total premium for the Growing Concern WC policy was $1,385.00 The Respondent contacted Mr. Valencia and requested the additional premium payment. Mr. Valencia directed the Respondent to void the transaction and to return the premium paid by the Growing Concern. The premium was returned by NCCI to the Respondent. Immediately upon receipt of the premium, the Respondent refunded $481.00, the amount paid by the Growing Concern, to Mr. Valencia on June 4, 1992. At all times, Mr. Valencia's premium funds were maintained in the Respondent's trust account until such time as they were submitted to NCCI. At no time did Mr. Valencia inform the Respondent that the Growing Concern's Allstate WC coverage had lapsed.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Insurance enter a Final Order dismissing the administrative complaint filed against Gary Lee Baker. DONE and RECOMMENDED this 4th day of January, 1994, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of January, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4569 The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order, except as follows: Rejected, contrary to the greater weight of the evidence which establishes that the delay in submission of the application was based on the insured's failure to provide the requested information. The premium was refunded to the insured on June 4, 1992, (not January 4, 1992) immediately upon the receipt by the Respondent. Rejected, immaterial. The Allstate policy lapsed through no act by the Respondent, who was never informed of such lapse. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 9. Rejected, hearsay uncorroborated by other competent evidence. COPIES FURNISHED: Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neil, General Counsel Office of State Treasurer The Capitol, PL-11 Tallahassee, Florida 32399-0300 Joseph D. Mandt, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Carl Joseph Coleman, Esquire Smith, Geraghty & Coleman Post Office Drawer 8 Fort Myers, Florida 33901
Findings Of Fact Respondent administers the State of Florida Employees' Group Health Self Insurance Plan as a self insurance plan pursuant to Section 110.123(5), Florida Statutes. Prior to October 1 1981, Petitioner was an employee of the Department of Natural Resources. For some period of time, Petitioner purchased coverage under that health insurance plan. When she married an employee of the federal postal service, she dropped her health insurance with the State of Florida, since she preferred health insurance coverage under her husband's Policy with the federal government. Petitioner's employment with the Department of Natural Resources was reclassified so that she became a member of the Senior Management Service during September or October 1981. One of the benefits available to Senior Management Service employees is coverage under the State of Florida Employees' Group Health Self Insurance Plan free of charge to the employee. In the case of a Senior Management Service employee who accepts coverage under that Plan, the employing agency pays the full premium cost for the employee. On September 18, 1981, Ginger Bailey, an employee in the personnel office of the Department of Natural Resources, typed in the required information on insurance application forms for the various insurance policies available to Petitioner when her Senior Management status became effective on October 1, 1981. Bailey took the application forms to Petitioner, who was too busy at the time to discuss with Bailey the different insurance policies available and the forms themselves. Bailey left the forms with Petitioner. On October 8, 1981, Petitioner went to the personnel office so that Bailey could review with her the insurance benefits available to Senior Management status employees. Bailey explained each available insurance policy to the Petitioner individually and, for each, offered Petitioner an application form already completed by her. Petitioner accepted the offer of State-paid life insurance and disability insurance by signing the application form for such insurance in the acceptance block. When Bailey explained to Petitioner the health insurance, Petitioner commented that she would not need the insurance because her husband's policy was so good. Accordingly, Bailey directed Petitioner's attention to the portion of the application marked in bold letters, "Refusal." Petitioner signed the refusal portion of the application and dated her signature. Bailey struck through the September 18, 1981, date she had previously filled in for Petitioner in the acceptance section of the application. At no time did Bailey or any other agent or employee of the Department of Natural Resources or of the Department of Administration represent or state to Petitioner that she was covered by or was a member of the State of Florida Employees' Group Health Self Insurance Plan. In June 1982, Petitioner obtained a copy of the State of Florida Employees' Group Health Self Insurance Booklet containing an explanation of benefits effective July 1, 1982. On a sheet of paper, Petitioner typed the name of the Plan, the name and address of the administrator of the Plan, the group number, and the policy number. She taped this slip of paper to the front of the Booklet. During the month of June 1982, Petitioner's husband's 20-year-old daughter was admitted to a hospital. Petitioner showed hospital employees the health insurance explanation Booklet with the information she had placed on the front of it, since she could not "find" her insurance card, and the hospital accepted Petitioner's representations as proof of insurance. Coverage for Petitioner's stepdaughter was no longer available on Petitioner's husband's insurance policy, since she was over 19 years of age. Petitioner submitted a claim form to Blue Cross and Blue Shield of Florida, Inc., the administrator of the State of Florida Employees' Group Health Self Insurance Plan. The claim submitted by Petitioner to the Plan was rejected for lack of coverage. No evidence was presented as to whether a Senior Management Service employee's family members receive free coverage under the State's health insurance plan, and no evidence was presented as to whether Petitioner had any legal or financial responsibility for her adult stepdaughter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's request that she be deemed covered by the State of Florida Employees' Group Health Self Insurance Plan from and after October 1, 1981, without prejudice to the Petitioner's right to apply, if she desires, for prospective coverage under the Plan in accordance with the Plan's requirements, rules and regulations. DONE and RECOMMENDED this 25th day of April, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of April, 1983. COPIES FURNISHED: Ms. Mary L. Davis Post Office Box 753 Havana, Florida 32333 Kevin X. Crowley, Esquire Department of Natural Resources Douglas Building, Suite 1003 3900 Commonwealth Boulevard Tallahassee, Florida 32303 Daniel C. Brown, Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Nevin G. Smith, Secretary Department of Administration 530 Carlton Building Tallahassee, Florida 32301
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Todd Schlosser, was licensed and eligible for licensure as a life and health insurance agent, health insurance agent and general lines agent - property, casualty, surety and miscellaneous lines by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a life and health insurance agent for American Sun Life Insurance Company (ASLIC) and Pioneer Life Insurance Company of Illinois (PLICI). On March 2, 1987, respondent met with one Mildred H. Camp, then a resident of Clearwater, Florida, for the purpose of selling her an ASLIC long term care health insurance policy. After discussing the matter with respondent, Camp agreed to purchase a policy. She completed an application and gave respondent a check in the amount of $511.88. The check was deposited into respondent's business account at First Florida Bank in Clearwater the same day. Camp did not testify at hearing. Therefore, the only first hand version of what was discussed by Schlosser and Camp and the nature of any further communications between the two was offered by respondent. That version was not contradicted, and it is accepted as being credible. Within a week after executing the application, Camp contacted respondent by telephone concerning the policy. Pursuant to that telephone conversation, respondent did not process the application or remit the check to the company, but attempted instead to arrange another meeting with Camp to answer further questions about the policy. Although he telephoned Camp "every single Monday", respondent was unable to arrange an appointment with her until April 30, 1987. On April 30 Camp and respondent met for the purpose of him explaining in greater detail the benefits and coverage under the policy. Because two months had gone by since the application was first executed, it was necessary for respondent to update Camp's health information. Accordingly, Camp executed a new application the same date and Schlosser forwarded the check and application to ASLIC shortly thereafter. On May 5, 1987 ASLIC received the April 30 application and premium check, less respondent's commission. The application was eventually denied by ASLIC on the ground of "excessive insurance" and a refund check was forwarded by ASLIC to Camp on June 11, 1987. There is no record of any complaint made by Camp against Schlosser in ASLIC's files nor did ASLIC contact respondent regarding this matter. When Schlosser began representing ASLIC, he executed a general agent contract which contained the terms and conditions pertaining to his appointment as a general agent for the company. As is pertinent here, the contract provided that Schlosser had a responsibility "to promptly remit such funds" received by him to the company. According to a former second vice-president of ASLIC, Joyce Lynch, who worked for ASLIC when the Camp transaction occurred, the company expected in the regular course of business to have checks and applications remitted by agents to the home office within fifteen days after the application was written, and that the above provision in the general agent contract was interpreted in this manner. Lynch added that she knew of no reason why an agent would hold an application and check for sixty days before submitting it to the company, particularly since once an application is completed and signed, it is the "property" of the company and not the agent. She concluded that if a customer desired more information about a policy after an application had been signed, which is not unusual, the agent still had a responsibility to promptly forward the application and check to the company within fifteen days. At that point, the company, and not the agent, would cancel a policy and refund the premium if so requested by a customer. Therefore, Schlosser breached the general agent contract by failing to promptly remit such funds. On July 28, 1987 Schlosser visited one Maxine Brucker, an elderly resident of Sarasota, for the purpose of selling her a PLICI health insurance policy. He had telephoned Brucker the same date to set up an appointment with her. After discussing the matter with respondent, Brucker agreed to purchase a policy, executed an application and gave respondent a check for $680.00. The check was deposited into respondent's bank account the following day. After Schlosser departed, Brucker noted that Scholosser did not leave a business card and she immediately became "worried" about her money and the possibility of not getting the insurance she had paid for. She telephoned the Department the same day to check on his "reputation" and to verify that Schlosser was an insurance agent. On August 4, 1987 she wrote a letter to the PLICI home office in Rockford, Illinois to ascertain if her check and application had been received but she did not receive a reply. She wrote a second letter to PLICI on August 14, 1987 but again received no reply to her inquiry. After telephoning the home office a few days later, Brucker contacted the Department a second time in late August and requested that it assist her in obtaining a refund of her money. At no time, however, did Brucker attempt to contact respondent. In early September, Brucker received by mail a money order from respondent which represented a full refund of moneys previously paid. Brucker acknowledged that she was happy with her policy when it was initially purchased. She also acknowledged that she had never contacted respondent personally to request a refund of her money. It was only after she received no reply from the home office that she made a request for a refund. According to the agency agreement executed by Schlosser when he became a general agent for PLICI, respondent had the responsibility to "immediately remit to (PLICI) all premiums (collected)". Testimony by Ronald F. Bonner, a vice- president of PLICI, established that in the regular course of business an agent was required to forward the check and application to PLICI no more than twenty-five days after receiving them from the customer. Any application held more than twenty-five days was considered "stale", was presumably invalid and had to be returned to the customer. Even so, Bonner did not contradict respondent's assertion noted in finding of fact 11 that his failure to remit the application and check was based on instructions from the home office, and under those circumstances, was not improper. Respondent readily admitted he did not remit the Brucker application and check because of instructions from the home office received after Brucker had telephoned the home office. After unsucessfully attempting to speak with Brucker by telephone daily for about two weeks, Schlosser voluntarily sent Brucker a money order via mail in early September. A review of respondent's business bank account for the months of March and August 1987 revealed that after the checks from Camp and Brucker had been deposited, the balances in the account thereafter dropped below $511.88 and $680 during those respective months. This raises an inference that those moneys were used for other undisclosed purposes during that time. According to respondent, he submitted applications and premiums checks to the home office approximately two or three times per month. It was also his practice to wait ten days or so after receiving a check from a customer to allow it sufficient time to clear. Schlosser denied having converted insurance moneys to his own personal use. There was no evidence that Schlosser lacked reasonably adequate knowledge and technical competence to engage in insurance transactions authorized by his licenses, a matter requiring conventional factual proof. Similarly, there was no evidence to establish that Schlosser intended to willfully violate the law or that his conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance business.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against respondent be dismissed with prejudice. DONE AND ORDERED this 18th day of January, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 18th day of January, 1990.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to the allegations of the First Amended Administrative Complaint, respondent Dennis Victor Daniels was licensed as an Ordinary Life including Disability Agent in Florida and was employed by Gulf Health/Life, Inc. in St. Petersburg, Florida. On or about January 14, 1980, Julie Stratton (then Julie Marzec) contacted respondent at the offices of Gulf Health/Life, Inc. for the purpose of purchasing health insurance. She and respondent discussed different insurance policies, and respondent informed her that if she joined the American Benevolent Society (ABS) she could obtain a lower rate for her policy and obtain the best policy for her money. Mrs. Stratton could not remember if respondent informed her of the exact amount of money she would save on her insurance if she joined the ABS. She was informed that other benefits and discounts from area businesses would be available to her as a member of the ABS. Mrs. Stratton joined the ABS in order to obtain less expensive insurance. She wrote two checks -- one in the amount of $15.00 payable to the ABS and the other in the amount of $54.26 payable to CNA Insurance Company. She obtained two insurance policies. The form numbers on these policies were 51831 and 52176. Based upon a referral from an agent with Allstate Insurance Company, John Valentine and his wife went to the offices of Gulf Health/Life in order to obtain hospitalization and surgical insurance coverage. Before moving to Florida, Mr. Valentine was covered by a group policy through his place of employment. Respondent informed Mr. Valentine that members of the ABS could obtain a policy at group rates which entailed a lesser premium than individual rates. Mr. Valentine wrote two checks -- one in the amount of $178.73 payable to CNA Insurance Company and the other in the amount of $25.00 payable to the ASS. Mr. Valentine received two policies from CNA -- one bearing form number 51831 and the other bearing form number 52176. He also received a brochure listing the places of business from which he could receive discounts as a member of the ABS. Gulf Health/Life, Inc. was a general agent for CNA. During the relevant time periods involved in this proceeding, CNA had different policies for health insurance. Policies with a form number of 51831 required the policyholder to be a member of an organization endorsing CNA in order to purchase that policy. Form 51831 policyholders paid a lesser premium for their policies. The difference in premiums between the group or organization policy and an individual policy with the same coverage is approximately $10.00. To obtain the policy bearing form number 52176, there is no requirement that the policyholder be a member of a group or an organization. Ms. Watkins, a secretary employed with Gulf Health/Life, Inc. between December of 1978 and June of 1979 observed a device known as a "light box" on the premises of Gulf Health/Life. This was a square-shaped plywood box with a slanted glass top and a high-intensity lightbulb within the box. On from a half-dozen to a dozen occasions on Fridays between January and April, 1979, Ms. Watkins observed respondent bent over the light box with a pen in his hand tracing a signature onto an insurance application. She could not produce any documents or recall any names of any insurance applicant whose signature was traced or copied by the respondent.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the First Amended Administrative Complaint filed against the respondent on April 29, 1982, be DISMISSED. Respectfully submitted and entered this 10th day of September, 1982, in Tallahassee, Florida. DIANE D. TREMOR 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 10th day of September, 1982. COPIES FURNISHED: Curtis A. Billingsley, Esquire Franz Dorn, Esquire 413-B Larson Building Tallahassee, Florida 32301 William A. Patterson, Esquire Masterson, Rogers, Patterson and Masterson, P. A. 447 Third Avenue North St. Petersburg, Florida 33701 Honorable Bill Gunter Insurance Commissioner The Capitol Tallahassee, Florida 32301
The Issue The issue is whether the Dynamic Orthotic Cranioplasty band and related services to correct cranial asymmetry in a one-year- old child are covered benefits under the State of Florida State Employees' self-insured health plan.
Findings Of Fact At all material times, Petitioner Andres Gil has been a professor employed at Florida International University in Miami. At all material times, he has been a participant in the state group insurance programs, including the state group health insurance plan (Plan). The plan's benefits are described in the State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document (Benefit Document). At all material times, Petitioner's child, S. G., who was born on April 15, 2002, was a covered dependent under the Plan. At birth, S. G.'s skull appeared normal, but, at about two months of age, she began to exhibit a slight flattening of the head. The flattening became more pronounced by four months of age. The flattening was probably due to positioning of the infant at night so that she would sleep on her back and presumably be safer from sudden infant death syndrome. Petitioner and his wife took S. G. to a pediatrician, who diagnosed S. G. with severe bilateral deformational plagiocephaly. The pediatrician confirmed that S. G.'s condition was not congenital. After trying unsuccessfully conservative treatment, the pediatrician recommended the Dynamic Orthotic Cranioplasty band. This device is called a DOC Band?. The DOC Band? is among the type of devices that attempt to reshape the skull of infants through the application of focused pressure on the still-forming skull. The U.S. Food and Drug Administration has approved 38 such devices, and many of them have been used for many years. These devices include rigid helmets, which are initially fitted, but not later adjusted, and more-flexible bands, which are adjusted periodically during the period that the infants wear them. S. G. first wore the DOC Band? for four months, starting in May 2003. Although she received little benefit from the device, Petitioner, his wife, and the pediatrician decided to give the device another try, starting in September or October 2003. During the second application of the DOC Band?, which ended in February 2004, S. G.'s skull asymmetry reduced substantially. When the pediatrician first prescribed the DOC Band?, Petitioner submitted a claim to Blue Cross Blue Shield of Florida (BCBSF), which is the third-party administrator of the Plan. BCBSF denied the claim, and Petitioner appealed this decision to Respondent. By letter dated October 24, 2003, Respondent informed Petitioner that it was sustaining the determination of BCBSF. The letter states that the service or procedure was "experimental or investigational" or "not in accordance with generally accepted professional standards." On December 15, 2003, Petitioner filed a letter requesting a formal hearing. However, he never filed a claim for the second application of the DOC band. The Benefit Document lists under the "Summary of Plan Benefits" an "overview" of the "services and supplies" that are covered by the Plan. Benefit Document, p. 11. The "Summary of Plan Benefits" states that the Plan pays a percentage of the cost of "covered care and medical supplies," as long as the "care or supplies" are ordered by a covered physician and are "medically necessary" for treatment as a result of a covered accident, illness, condition, or mental or nervous disorder. Id. The Benefit Document generally covers "doctor's care" and "durable medical equipment." Benefit Document, p. 12. However, under "Limitations and Exclusions," the Benefit Document does not cover: "Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services." Benefit Document, p. 31. The Benefit Document defines "investigational or investigational services" as "any evaluation, treatment, therapy or device that:" cannot be lawfully marketed without approval of the US Food and Drug Administration or the Florida Department of Health if approval for marketing has not been given at the time the service is provided to the covered person is the subject of ongoing Phase I or II clinical investigation, or the experimental or research arm of a Phase III clinical investigation--or is under study to determine the maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the US, Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or a similar condition BCBSF and [Respondent] determine whether a service or supply is experimental or investigational. The first two bullets of the above-cited definition of experimental or investigational services are not at issue in this case. The U.S. Food and Drug Administration has approved the DOC Band?, and it is not presently under clinical investigation or otherwise under study to determine its efficacy compared to other treatments. Nor is the safety of the DOC Band? at issue. Premature use, which is not applicable in this case, may present certain risks. Otherwise, the main risk is minor skin irritation, which obviously may be monitored. Thus, no substantial, unavoidable safety issues emerge in the use of the DOC Band? in this case. In addition to raising safety concerns, the third and fourth bullets of the above-cited definition of experimental or investigational services raise the issue of the efficacy of the DOC Band?. In 2003, the American Academy of Pediatrics released a position paper on the management of skull deformities in infants and reached no firm conclusions about the efficacy of cranial orthoses. However, a significant number of physicians find the DOC Band? to be effective in treating deformational plagiocephaly. The fifth and sixth bullets of the above-cited definition of experimental or investigational classify the DOC Band? as experimental or investigational if it is not accepted in "consensus" by practicing doctors as effective or if it is not "regularly used" by practicing doctors to treat deformational plagiocephaly. "Consensus" is defined as: "1.a. general agreement: UNANIMITY . . . [,] b. the judgment arrived at by most of those concerned[,] and 2. group solidarity in sentiment and belief." Merriam-Webster's Collegiate Dictionary (Tenth Edition 1999). Respondent has proved that DOC Band? has failed to reach these levels of acceptance and use. Although insureds may be absorbing the cost of DOC Bands? without filing claims, the fact that the Plan has received one claim for a DOC Band? in 2004 and one claim for a DOC Band? in 2003 militates against a finding of regular use, if not also widespread acceptance, of the device. Although significant numbers of physicians find the DOC Band? to be effective in treating deformational plagiocephaly, the record reveals disagreement in the acceptance of the DOC Band? and suggests that practitioners do not regularly use the device to treat deformational plagiocephaly. The research articles on which Petitioner relies assist in determining the efficacy of the DOC Band?, but do not assist in finding, at the practitioner level, the extent of acceptance and use of the device. The medical group endorsements suggest an invitation to the use of the DOC Band?, but assist little in finding the acceptance of the device by practitioners and do not assist at all in finding the extent of use of the device by practitioners. Against this evidence, the scant number of claims and the testimony of Respondent's expert witness to similar effect establish that the DOC Band? meets the fifth and sixth definitional bullets of experimental or investigational services.
Recommendation It is RECOMMENDED that Respondent enter a final order denying Petitioner's claim to the Plan for payment for the DOC Band? and related services. DONE AND ENTERED this 22nd day of November, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 2004. COPIES FURNISHED: William Simon, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Alberto Dominguez, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Andres G. Gil 206 Cameron Court Weston, Florida 33326 Sonja P. Mathews Assistant General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950
The Issue Whether Petitioner's claim against her state group health insurance company for services related to a Magnetic Resonance Imaging examination (MRI) should be granted or denied.
Findings Of Fact At all times material hereto, Petitioner was employed by the State of Florida and was a participant in the State of Florida group health insurance plan, which is a self-insured plan administered by the State of Florida in conjunction with the plan's third party administrator, Blue Cross Blue Shield of Florida (BCBSF). This plan is frequently referred to as the PPO Plan, an acronym for preferred provider organization. Prior to April 26, 2002, Petitioner's physician detected a lump in Petitioner's right breast. Petitioner's physician ordered mammography and ultrasound examinations to be performed on Petitioner's right breast. Those examinations were performed on April 1, 2002. Following those tests, Petitioner's physician ordered an MRI examination of the right breast, which was performed on April 26, 2002, and is the procedure at issue in this proceeding. Following that MRI, Petitioner had another mammography and ultrasound for the diagnosis and treatment of breast cancer. Respondent has paid Petitioner's claims for coverage of the mammography and ultrasound examinations. Respondent has denied payment for the professional fee associated with the MRI in the amount of $215.00. Respondent has paid the facility fee associated with the MRI in the amount of $1,705.00. Respondent asserts that the payment of that fee was in error and intends to seek reimbursement for that payment if it prevails in this proceeding. The terms of coverage of the state group health insurance plan are set forth in a document entitled "State Employees' PPO Plan Group Health Insurance Plan Booklet and Benefit Document" (Benefit Document). The Benefit Document (at page 31, paragraph 47 of the section entitled "Services Not Covered By The Plan") specifically excludes the following from coverage: 47. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The Benefit Document has a section entitled "Definitions of Selected Terms Used By The Plan" beginning at page 49. The definition of the phrase "experimental or investigational services", found at page 51, includes, in pertinent part, the following: . . . any evaluation, treatment, therapy, or device that: * * * is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices is not accepted in consensus by practicing doctors as safe and effective for the condition is not regularly used by practicing doctors to treat patients with the same or a similar condition The Benefit Document provides at page 51 that BCBSF and the Division of State Group Insurance determine whether a service is experimental or investigational. The testimony of Dr. Wood established that an MRI of the breast is experimental or investigational within the meaning of the Benefit Document. 2/ MRI examinations of the breast are not reliable diagnostic tools because such examinations result in an unacceptable number of cases where an MRI produces false negative findings that reflect the absence of cancer where cancer is, in fact, present in the breast. According to Dr. Wood, an MRI cannot be relied upon and should not be used to avoid a biopsy of a suspicious mass because a patient would run an unacceptable risk that the detection of cancer may be delayed or missed. Dr. Wood also testified that radiologists in Florida performing services for the state group insurance health plan have been informed of BCBSF's position. Petitioner's doctors did not inform her prior to the examination that the MRI examination would not be covered by her insurance plan.
Recommendation Based on the foregoing, it is RECOMMENDED that Respondent enter a final order denying coverage for the MRI claims submitted by Petitioner. DONE AND ENTERED this 17th day of February, 2003, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 2003.
The Issue Whether 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
Findings Of Fact At all times relevant to this proceeding, Respondent, Carl Austin Jorgensen, was licensed by the Petitioner, Department of Insurance, as an ordinary-combination life including disability insurance agent and a solicitor for property, casualty, surety and miscellaneous lines insurance. He has held a license since 1956. During the time in which the alleged violations occurred, Respondent was employed by Simons and Rose Agency, an insurance firm located in Coconut Grove, Florida. Respondent wished to establish an insurance agency with his wife, Maren Jorgensen, who was licensed as a general lines agent. He discussed this with her on several occasions in 1977, but she would not agree. Her consent was necessary since agency applications must be submitted by a licensed general lines agent. On or about August 10, 1977, Respondent prepared and submitted an application for agency appointment to the Florida Joint Underwriters Association (FJUA) . The Association is the successor to the automobile assigned risk plan in Florida and was established to provide insurance coverage to those automobile drivers who are otherwise unable to obtain voluntary insurance coverage. The application was submitted under the name of All Lines Insurance Agency, 222 NorthEast 20th Street, Miami, Florida, and bore the name and signature of Maren Jorgensen, the Respondent's wife (Petitioner's Exhibit 2). The application was actually signed by Respondent, who had forged his wife's name (Petitioner's Exhibit 7). As a licensed general lines agent, Maren Jorgensen held a 2-20 license. This license was required in order to be qualified to sell insurance through the FJUA. Respondent held no such license, and as such, was unqualified to write policies. Upon receipt of the application, the FJUA reviewed it, and having determined that Maren Jorgensen held an appropriate license, assigned Nationwide Mutual Fire Insurance Company to write policies for All Lines' customers. Maren Jorgensen was unaware of the application being filed, and did not consent to the use of her name. At no time did she participate in or otherwise supervise the running of the business. Rather, Respondent himself operated the agency until early 1978, when it ceased to do business. On or about December 23, 1977, Respondent solicited and sold two automobile insurance policies to Lowell McLean, III, a long-time acquaintance. These policies were issued by Nationwide Mutual Fire Insurance Company and were numbered J58721 and J57869 (Petitioner's Exhibits 3 and 5) The applications bore the name and signature of his wife as producing agent. However, the applications were prepared and submitted by Respondent without her knowledge and consent. The Florida Department of Law Enforcement (FDLE) verified that Respondent had forged her signature (Petitioner's Exhibit 7) On or about November 26, 1977, Respondent solicited and sold an automobile insurance policy to Michael J. Halen. This policy was issued by Nationwide Mutual Fire Insurance Company and was numbered J56852 (Petitioner's Exhibit 4). It bore the name and signature of Respondent's wife as producing agent. However, the application was prepared and submitted without the knowledge and consent of Maren Jorgensen. Again, the FDLE verified that Respondent had actually signed her name (Petitioner's Exhibit 7). Two relatively small commission checks were sent by Nationwide to Maren Jorgensen as producing agent for the sale of the three policies. The checks were mailed to the address of All Lines, without the knowledge of the wife. Respondent appropriated one of the checks for his own personal use. His wife accidentally discovered the other in her husband's wallet and then cashed it herself. Respondent sold only three policies involving two customers during his association with All Lines. None of the three transactions resulted in harm or financial loss to either the customers or the insurance company. During the period when the aforesaid events occurred, Respondent and his wife, although living together, were experiencing marital difficulties. In fact, his wife characterized this time-frame as being a "rather stormy period". They are now separated. Respondent acknowledged the charges in the complaint, but attributed these indiscretions to his desire to rehabilitate the marriage by cultivating a successful insurance business with his wife.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent Carl Austin Jorgensen's ordinary-combination life including disability insurance license be suspended for a period of eighteen (18) months from the date of the final order entered in this proceeding for those violations of Chapter 626, Florida Statutes (1977) described herein above. DONE and ENTERED this 22nd day of April, 1981, in Tallahassee, Florida. DONALD R. ALEXANDER 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 22nd day of April, 1981. COPIES FURNISHED: Deborah A. Getzoff, Esquire Department of Insurance 428-A Larson Building Tallahassee, Florida 32301 William A. Meadows Jr., Esquire 6101 SW 76th Street South Miami, Florida 33143
The Issue The issue is whether Petitioners, as beneficiaries of their deceased father's life insurance policy, are entitled to a payment of $7,500 in addition to the $2,500 benefit already paid. As set forth more fully herein, since Florida's statutory and rule framework do not require that notice provided to the Division of Retirement be shared with the Division of State Group Insurance, Petitioners did not demonstrate that they are entitled to the additional benefit.
Findings Of Fact The Division of State Group Insurance (DSGI) is an administrative unit located within the Department of Management Services (DMS), and pursuant to Section 110.123(3), Florida Statutes, is designated as the agency responsible for the administration of the State Group Insurance Program (Program). The life insurance program at issue in these proceedings is a part of the Program. DMS has contracted with Northgate Arinso, formerly Convergys, Inc., to provide human resources management services, including assisting in the administration of employee benefits. Convergys primarily performs these tasks through an online system known as "People First." The term "employee benefits" refers to insurance, but not to retirement benefits. People First became the system of record for DSGI benefits data, including addresses, on January 1, 2005. Petitioners Martha L. Kenerson and David R. Kenerson, Jr., are the daughter and son of David R. Kenerson (Mr. Kenerson), a retired employee of the State of Florida, and the beneficiaries of the life insurance that was provided through the Program. Mr. Kenerson died a resident at 156 56th Street South, St. Petersburg, Florida, on March 31, 2009. Since Mr. Kenerson's retirement, the State of Florida, through DSGI, has maintained a Group Life Insurance Policy (the Policy) covering the individual lives of its former employees who elected to be covered. The Policy is a benefit available to retirees of the State of Florida which Mr. Kenerson, as a retiree, accepted. The Insured, Mr. Kenerson, was entitled to inclusion in the group of State of Florida retirees who were covered under the Policy that was offered by the State of Florida to its retirees. Mr. Kenerson received a pension for life from the State of Florida. Beginning January 1, 2000, and subsequently, the life insurance coverage was $10,000. It was changed beginning in Plan Year 2007, as to all retirees, due to DSGI's determination of the impending loss of the Advanced Premium Account. As to Mr. Kenerson, it was reduced from $10,000 to $2,500 beginning in Plan Year 2007 for the following reasons: He defaulted in responding to the Open Enrollment Notice; Neither Mr. Kenerson nor anyone on his behalf submitted any notification of election pursuant to such Open Enrollment Notice; and DSGI determined that it was necessary to change the coverage for death benefits because of such impending loss of the Advanced Premium Account. On April 10, 2009, Minnesota Life Insurance Company claims examiner Latrice S. Tillman contacted Petitioner Martha L. Kenerson regarding the death of Mr. Kenerson, asking for the death certificate of the Insured and the Preference Beneficiary Statements from both Petitioners. On April 17, 2009, Petitioners filed the appropriate documents with the Minnesota Life Insurance Company as beneficiaries of Mr. Kenerson's life insurance policy. On May 20, 2009, Petitioners each received a check in the amount of $1,257.59, constituting $1,250 of insurance proceeds (totaling $2,500) and the balance of interest on the $2,500 insurance proceeds. On May 24, 2009, Petitioner Martha L. Kenerson wrote a letter to DSGI requesting an appeal. On June 9, 2009, Ms. Kenerson received a letter dated July 9, 2009, from Michelle Robleto, the Director of DSGI, denying Petitioners' Level II Appeal and informing Petitioners of their right to request a hearing. On June 26, 2009, Ms. Kenerson timely petitioned for an evidentiary hearing regarding Mr. Kenerson's policy. Approximately 29,391 State of Florida retirees were covered under the Policy in Class A (i.e., with initial $10,000 coverage excluding Classes having such initial coverage) at the time when Respondent sent the Change Notice of the proposed changes in coverage that applied also to Mr. Kenerson's Policy. Approximately 5,921 State of Florida retirees were covered under Class A of the Policy and elected, in response to the Change Notice, to increase the premium in order to retain the coverage at $10,000. None of the State of Florida retirees in Class A under the Policy who failed to respond in writing to the Change Notice was contacted by Respondent prior to the effective date of coverage change. Respondent never attempted to call retirees regarding their wishes as to the Change Notice. Respondent has no proof that it spoke with the Insured to explain the proposed change of coverage and/or premium in January 2007. Respondent did not mail the Open Enrollment Notices to retirees by a method that required affirmative identification of the recipient, such as by certified return receipt or other postal proof of delivery. The premiums for the Policy were paid by the State of Florida from Mr. Kenerson's pension as a deduction from the payment of the gross pension payments. From at least January 1, 2003, to the end of the Open Enrollment Period for Plan Year 2007, the Department of Financial Services (DFS) never communicated to Respondent the address that DFS was using for Mr. Kenerson. DFS has a separate and independent data base from that used by Respondent. At no time did DMS send to the Insured c/o Petitioner David R. Kenerson, Jr., any Open Enrollment Notice for any plan year before the 2008 plan year relating to the terms of the Policy. As administrator of the Policy, it is and has been DMS's responsibility to maintain a database of addresses for contacting retirees who are eligible for coverage under the Policy. In August 2002, DMS contracted with Convergys as a third party service provider to perform administrative functions, including the maintenance of the retirees "address of record" database for insurance purposes and for recordkeeping relating to retirees whose lives were insured under the Policy. With respect to the July 31, 2006, mailing to retirees, DMS retained direct control of the stuffing, sending, and addressing of the letters, as well as the collection of mail that was returned as undeliverable. In 2004, DMS delivered to Convergys a copy of the retiree address of record contained in the Cooperative Personnel Employment System (COPES), previously maintained only by DMS. Tom Lockridge, Respondent's Benefits Team Manager in 2005, noted his confusion with how many different databases exist that cover retirees of the State of Florida. He was aware that DSGI and the Division of Retirement Services (DRS) each has its own databases. Retirees entitled to enroll in the Policy managed by DSGI are also entitled to pension eligibility or other post- retirement activities managed by DMS, DRS, or the State University System. Since the inception of the DMS website, www.myflorida.com, two separate databases, the People First database and the DRS database, have been maintained. At all times since 2000, Mr. Kenerson was listed as a retiree of the State of Florida in the databases of DSGI and DRS. During the Open Enrollment period for Plan Year 2007 for the Policy, DMS records maintained by Convergys in the "address of record" database showed that Mr. Kenerson lived at 1737 Brightwaters Boulevard, St. Petersburg, Florida. DMS, through its agent Convergys, sent the Open Enrollment Notice for Plan Year 2007 for the Policy to Mr. Kenerson at the Brightwaters Boulevard address. In 2001, Mr. Kenerson sent to DRS, but not to DSGI, a written notice of change of address showing his new address as 156 56th Street South, Villa 37, St. Petersburg, Florida. DMS never received an affirmative notice from Mr. Kenerson electing to either adopt the $2,500 coverage; increase to $10,000 in coverage; or terminate his enrollment altogether. In connection with the Open Enrollment notice, DMS contract with Convergys did not require Convergys to seek data from other Florida agencies or divisions to update the database of retirees' addresses and contact information. In connection with the Open Enrollment notice, DMS records management policies did not require DMS personnel to obtain data from other Florida agencies or divisions to update the DMS database of retirees' addresses and contact information. In designing the offered choices on the Open Enrollment notice, DMS allocated $6.33 per month from the Advance Premium Account to subsidize each retiree's premium for Plan Year 2007. Approximately 80 percent of the then-current retirees elected, or were deemed to have elected by default, to reduce their coverage from $10,000 to $2,500 as a result of the Open Enrollment process conducted by DMS. As of October 2006, 24,488 retirees elected the $2,500 life insurance policy for Plan Year 2007, while 4,769 retirees elected the $10,000 coverage. The Open Enrollment notice did not explain why those electing the $10,000 in coverage were required to pay almost eight times the amount of premium charged for $2,500 of coverage ($35.79 per month versus $4.20 per month). A "positive enrollment" means an individual must affirmatively elect each and every benefit or a certain type of benefit. A "passive enrollment" is where, by taking no action, the individual continues to have the same benefit level as previously. Respondent used the "passive enrollment" system for Plan Year 2008, when the life benefit premium changed due to the fact that Convergys would have charged a significant fee (seven figures) to conduct a "positive enrollment." DMS elected not to incur the additional expense. Since the state has designated People First as the system of record for its retirees relating to their benefits and information regarding Open Enrollment, any changes in address are made through the People First system. The agreement between DMS and Convergys does not require Convergys to communicate with other agencies regarding updating of the address of record database for retirees. Convergys, as the contractor to DMS, routinely destroys mail returned as undeliverable after 90 days. Neither DMS nor Convergys maintains a list of "bad addresses," those to which mail has been returned as undeliverable. DMS told Convergys not to synchronize their address database with the Florida Retirement System (FRS) database. DMS was aware that there were retirees who sent address changes to DRS and not to People First. DMS was aware that its address of record database for retirees contained at least some addresses that were not current for some customers. DMS was aware that some number of Open Enrollment packages was returned every year as undeliverable due to incorrect addresses. DMS does not maintain a record of returned Open Enrollment packages. DMS has adopted no rules to record the names and addresses of retirees whose Open Enrollment packages have been returned as undeliverable. DMS has adopted no rules to compare or synchronize the DMS address of record used for Open Enrollment packages with other databases maintained by DMS, DFS, the Florida Department of Revenue, the Florida Department of Highway Safety and Motor Vehicles, local voter registration, or any other State of Florida address lists. DMS has adopted no rules to update the address of record database used by DMS for notices to retirees relating to group term life insurance policies such as the one at issue here. DMS has adopted no rules to create, preserve, or update records, and to destroy names of retirees whose notices are returned by the U.S. Postal Service as undeliverable due to no forwarding address. The ultimate custodian of the State of Florida database containing addresses of record for retirees' insurance benefits is Convergys, Inc. At all times from January 1, 2001, to April 30, 2009, the FRS, administered by DMS, has maintained a database of State of Florida retirees that includes their address records in connection with pension and retirement income and expense matters. This FRS database is separate from the address of record database maintained by Convergys/People First for the same period. The letter dated July 31, 2006, relating to the 2007 plan year, advised State of Florida retirees that they could change their election of life insurance benefit up to and including January 19, 2007. Mike Waller, an employee of DSGI, maintains benefits data for People First/DSGI. In July 2006, Mr. Waller was asked to prepare a file containing the names and addresses of all retirees who were covered by life insurance. He created a file used in a mail merge program to send all retirees a copy of the July 31, 2006, letter. In preparing the file containing the mailing addresses of retirees covered by life insurance in July 2006, Mr. Waller used the addresses of record from the benefits data he maintained. The DSGI address of record for Mr. Kenerson in July 2006 was 1737 Brightwaters Boulevard, St. Petersburg, Florida 33704, and was included in the mailing addresses file. Mr. Waller prepared the file and delivered it to Dick Barnum and Thomas Lockridge on July 3, 2006. Thomas Lockridge delivered the file to Laura Cutchen, another employee of DSGI. DSGI contracted with Pitney Bowes, a mailing system company, to mail the July 31, 2006, letter to all State of Florida retirees. After obtaining copies of the letter from the DSGI print shop, Ms. Cutchen delivered the letters and the file containing the names and addresses of the retirees to Pitney Bowes to assemble. The letters were assembled by Pitney Bowes and delivered to the U.S. Post Office, accompanied by Ms. Cutchen, and the State of Florida first class mailing permit had been applied to each envelope. The letter dated July 31, 2006, was mailed to Mr. Kenerson at the Brightwaters address, by first class mail, using the State of Florida permit for DSGI. The return address on the envelope containing the July 31, 2006, letter was DSGI, 4050 Esplanade Way, Suite 215, Tallahassee, Florida 32399-0949. Any letters returned to DSGI as undeliverable were processed by Janice Lowe, an employee of DSGI. Each letter returned to DSGI was handled in one of two ways: If the envelope showed a different address on the yellow sticker applied by the U.S. Postal Service, the letter was re-mailed to that address; or If the returned envelope did not provide a different address, a manual search of the database of DRS was made; a copy of the print screen showing the address in the DRS database was made, if different from the address on the database of DSGI; and the original envelope and letter were placed in another envelope and mailed to the address from the DRS database. A copy of each DRS print screen that was accessed by Ms. Lowe was printed and inserted in alphabetical order in a binder. There was a DRS print screen for every person whose letter was returned and for which there was not another address. The absence of a DRS print screen indicates that the initial letter was not returned. No DRS print screen exists for Mr. Kenerson, an indication that the letter to him dated July 31, 2006, was not returned to DSGI. Prior to Convergys assuming responsibility for the administration of benefits, DSGI maintained benefits information in COPES. When Convergys assumed responsibility for the management of benefits on January 1, 2005, the benefits information from COPES was imported into the Convergys/People First system. People First and DRS do not share databases and each maintains its own database of names and addresses. In addition to the letter discussed at length above, each year, DSGI must hold an "Open Enrollment" period for the health program. Open Enrollment is the period designated by DMS during which time eligible persons, not just State of Florida retirees, may enroll or change coverage in any state insurance program. Prior to Open Enrollment each year, 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. Kenerson's Open Enrollment package to the Brightwaters Boulevard address on September 3, 2006. The mailing of Open Enrollment packages is noted on the Open Enrollment screen by the Item Code "FSAE." The Open Enrollment packages, like the July 31, 2006, letter to retirees, were mailed by People First through the U.S. Post Office, first class prepaid postage. The Open Enrollment package mailed to Mr. Kenerson on September 3, 2006, contained Mr. Kenerson's Benefits Statement; a letter from John Mathews, former Director of DSGI; Information of Note; a Privacy Notice; a Notice Regarding Prescription Coverage; and the 2007 Benefits Guide. The Information of Note included a detailed description of the reduction in life insurance benefits from $10,000 to $2,500 unless an affirmative election was made to pay a higher premium. Neither Mr. Kenerson nor anyone on his behalf affirmatively elected to continue $10,000 in life insurance coverage during the enrollment period in 2006 for Plan Year 2007. Because the $10,000 life insurance option was not affirmatively made by the Insured or anyone on his behalf, upon his death, Respondent determined that he was entitled to $2,500 in death benefit. For those retirees who did not make a timely election pursuant to the Open Enrollment notice sent in 2006 for Plan Year 2007, the death benefit automatically became $2,500, effective January 1, 2007, for a monthly premium of $4.20. As of Open Enrollment 2005, the People First Service Center was charged with the responsibility of sending Open Enrollment packages to State of Florida retirees and other employees. The letter contained in the Open Enrollment package for 2006 for Plan Year 2007 stated as follows: The State conducts a "passive enrollment." If you want to keep the same insurance and benefits plans indicated, you do not have to do anything. Your Flexible Spending Account will be continued at the same annual amounts if no charges are made during Open Enrollment. The reverse side of this letter contains important information regarding changes, new offerings, and reminders regarding processes necessary to ensure a successful enrollment. Please review these items of note. Included in the Open Enrollment package was an "Information of Note" which set forth the reduction in life insurance benefit as well as the amounts to be charged for either the $2,500 or $10,000 benefit. Prior to January 1, 2007, funds in the Advanced Premium Account were applied to payment of costs of life insurance premiums under the policy for retirees. Once the funds in the Advanced Premium Account were depleted, the monthly premium for the $10,000 policy increased significantly to $35.79. DSGI has consistently mailed Open Enrollment packages, including Benefits Guides, to the addresses of record for all retirees, including Mr. Kenerson. Prior to May 1999, Mr. Kenerson actually resided at the Brightwaters Boulevard address, which had been his address of record since at least 1988. DSGI had mailed all correspondence to that address for Mr. Kenerson. In the past, DSGI had mailed, from time to time, newsletters to retirees. These newsletters were mailed to the addresses of record for the retirees. The newsletter for January-March 1999 contains the telephone number and address for DSGI and the following notice under the heading "Reminder Tidbits": "Notify both the Division of Retirement and the Division of State Group Insurance in writing if your mailing address changes." The newsletter for July-September 1999 contained the following: "Q. What if I do not receive my Open Enrollment package? A. If you do not receive the Open Enrollment package by September 17, contact the Division of State Group Insurance. You should also confirm your mailing address when you call." Prior to Mr. Kenerson moving from the Brightwaters Boulevard address, notices mailed to him there included notification that retirees were required to update any changes in address with DSGI. Throughout the years, the Benefits Guides that are included in the Open Enrollment packages have informed all program participants of their responsibility to maintain a current address with DSGI. Even if Mr. Kenerson had changed his address with DRS, such update would not have been provided to DSGI. Neither DSGI nor DRS notifies the other of receipt of a change of address. A change of address with one division of DMS does not automatically change the address in another since the two divisions have separate databases. Within DMS there is no centralized database of records containing addresses of record for all DMS functions. Retirees and active employees of the State of Florida are not required to have one address of record for all functions and services received through DMS. In fact, many State of Florida employees have different addresses for different DMS division functions. DSGI and DRS serve different functions and do not share databases. DRS consists of all retirees who participate in FRS, including local governments. The total number of individual participants is over 300,000. The synchronization of databases would be an expensive undertaking and no funding has been provided to synchronize DSGI with DRS or any other state agency or public entity. No evidence demonstrated that Mr. Kenerson informed DSGI in any way that he desired to maintain his $10,000 life insurance benefit, or that DSGI assumed or accepted that responsibility.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order dismissing the petition in its entirety. DONE AND ENTERED this 10th day of November, 2010, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 2010. COPIES FURNISHED: Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Martha Lynne Kenerson, Esquire Bierce & Kenerson, P.C. 420 Lexington Avenue, Suite 2920 New York, New York 10170 William B. Bierce, Esquire Bierce & Kenerson, P.C. 420 Lexington Avenue, Suite 2920 New York, New York 10170 John Brenneis, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
