07-003206 James D. Wells, Jr. vs. Department Of Management Services, Division Of State Group Insurance Status: Closed Recommended Order on Friday, December 14, 2007.

Summary: The evidence showed that Petitioner`s use of office mail did not create presumption of receipt by agency for Flexible Spending. Recommend account reimbursement.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JAMES D. WELLS, JR., ) )

)

Petitioner, )

) Case No. 07-3206

vs. )

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF STATE )

GROUP INSURANCE, )

)

Respondent. )

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

before Diane Cleavinger, Administrative Law Judge, Division of

Administrative Hearings, on September 18, 2007, in Tallahassee,

Florida.

APPEARANCES

For Petitioner: James D. Wells, Jr.

Department of Highway Safety

and Motor Vehicles

2900 Apalachee Parkway, Mail Stop 47

Tallahassee, Florida 32399

For Respondent: Sonja P. Matthews, Esquire

Department of Management Services

Office of the General Counsel

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

PRELIMINARY STATEMENT

In 2006, Petitioner requested reimbursement from his

Flexible Spending Account (FSA) for qualified dependent daycare

expenses incurred in plan year 2005. The Department of

Management Services (Department) denied his request. The denial

was based on the untimeliness of the request. Petitioner

disagreed with the Department’s denial and requested a formal

administrative hearing. Petitioner’s request was forwarded to

the Division of Administrative Hearings.

At the hearing, Petitioner testified on his own behalf and

offered one exhibit into evidence. The Department presented the

testimony of four witnesses and offered 19 exhibits into

evidence. After the hearing, Petitioner and Respondent

submitted Proposed Recommended Orders on October 8, 2007.

FINDINGS OF FACT

1. Under Section 26 of the United States Code Section 125,

the federal government allows employers to establish programs

that provide a federal income pre-tax benefit to employees. To

maintain the pre-tax benefit, the employer is required to

administer the program in compliance with applicable federal

laws, rules and regulations.

2. Employers participating in the 125 pre-tax program are

required to implement a written plan (Cafeteria Plan) and take

deductions from an employee’s earned income that are credited to

the employee’s flexible spending account (FSA) for the purpose

of paying medical and/or dependent care expenses. The State of

Florida has developed such a plan. The FSA program is managed

by Respondent, Department of Management Services.

3. Petitioner, James D. Wells, Jr., has maintained a FSA

daycare reimbursement account since 1994. During the 2005 plan

year, Petitioner was an enrolled member of the Daycare

Reimbursement program. In 2005, Petitioner contributed

$3,000.00 to his account.

4. The reimbursement filing deadline for Plan Year 2005

was April 17, 2006. The deadline for 2005 occurred because the

normal deadline day of April 15th fell on a weekend. Therefore,

the deadline was moved by rule to the first regular business day

following April 15th.

5. Petitioner obtained a receipt for eligible expenses for

2005 totaling $3800.00 from the Immanuel Baptist Church Daycare.

On March 27, 2006, he took the receipt to his office. While at

work, he filled out the appropriate reimbursement request form.

Petitioner placed these documents in an envelope with the

correct postage and address on it. He placed the envelope in

his inter-office mail receptacle.

6. Mail placed in the inter-office receptacle is picked up

by an employee of Petitioner’s agency, taken to the agency

mailroom, and there picked up by the U.S. Postal Service. The

inter-office mail receptacle is neither owned nor controlled by

the U.S. Postal Service. Consequently, personal mail is not

postmarked until it is received at the U.S. Postal Service.

There is no evidence that Petitioner’s envelope was received by

the U.S. Postal Service or that it was postmarked by the U.S.

Postal Service.

7. The address on the People First reimbursement form

reads: “People First Service Center, Flexible Spending Account,

Post Office Box 1800, Tallahassee, Florida 32302-1800.” The

address is a post office box of the U.S. Postal Service, owned

by Fringe Benefits Management Company (FBMC).

8. FBMC is a private entity that processes benefits for

various private and public employees, including the State of

Florida’s flexible spending accounts. FBMC does not have access

to any information regarding a claimant’s dependents and does

not verify the authenticity of the names of the dependents or

whether the claimant has dependents.

9. FBMC uses Post Office Box 1800 specifically for FSA

reimbursement requests submitted by all employees of FBMS

clients. The U.S. Postal Service separates all of the mail

addressed to Post Office Box 1800 and places it in bins, which

are picked up each day by FBMC mailroom employees.

10. The mailroom employees deliver the mail to the claims

area at FBMC. Mail processors open each piece of mail and enter

the name and/or social security number of the claim and amount

of requested reimbursement in the FBMC computer system. Each

claim is labeled as pending in the system.

11. For each batch of 50 reimbursement requests entered

into the system, the mail processors print a list of the 50

claims and attach the associated paper work for each claim into

a batch. Each batch of 50, the list and actual forms are then

delivered to “adjudicators” who again input the name and/or

social security number directly from the reimbursement form.

The adjudicator also determines whether the attached

documentation supports the amount of the claim. Once the

adjudicator enters the 50 requests into the system, the

adjudicator prints another list of names.

12. If either the mail processor or adjudicator enters

incorrect information into the computer system, the adjudicator

will produce a list that does not match the mail processor’s

list. At that point, the mail processor’s list and the

adjudicator’s list are reconciled.

13. During reconciliation, if the adjudicator discovers a

claim form that does not appear in the pending computer file,

the adjudicator will add the name to the pending file or

personally deliver the request to the mail processor to enter

into the pending file. If the identification data of the

claimant entered by the adjudicator matches the information in

the “pending file,” and if the backup documentation in support

of the claim is adequate as to amount, FBMC authorizes payment;

if not, the claim is denied. The claim information is then sent

to Convergys to process the claim.

14. Convergys is a private entity that administers the

State of Florida human resources and personnel system.

Convergys has subcontracted with FBMC to process the payments of

FSA requests for reimbursement.

15. Upon receipt of files from FBMC, Convergys responds to

all reimbursement requests it receives from FBMC. It either

processes payment for approved requests or provides written

notification that the claim has not been approved for payment.

16. In June 2006, Petitioner had not received any

information regarding his claim and had not received the

documents back from the post office. He called the agency and

discovered that it did not have any record of his claim. He

explained that he had mailed it prior to April 17, 2006. Both

FBMC and Convergys searched their records for Petitioner’s

claim.

17. Convergys had no record of receiving Petitioner’s

claim from FBMC.

18. FBMC searched every “James Wells” in its database

listed for each employer-client to whom reimbursements were paid

for the 2005 Plan Year. No payment was processed for any other

James Wells. FBMC also physically searched all claims from all

employees of all its clients, beginning March 27, 2006, through

April 22, 2006. Each claim was pulled and each sheet of paper

attached to each claim was reviewed. Petitioner’s claim was not

located. Given the mail and claim handling procedures used by

FBMC in processing claims, it does not appear that Respondent

received Petitioner’s claim by April 17, 2006. Therefore,

Petitioner’s claim for reimbursement was not timely filed in

2005, and Petitioner is not entitled to reimbursement. The

request for hearing should be dismissed.

CONCLUSION OF LAW

19. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat.

20. Administrative Rule Chapter 60P governs the State of

Florida’s Cafeteria Plan. The Rule states in relevant part:

60P-6.006. Cafeteria Plan

* * *

(3)b. “Claim Filing Deadline” is April 15

following the participant’s period of

eligibility. All initial prior year claims

filings must be postmarked or received , when

not mailed, at the Department on or prior to

April 15 to be considered for processing.

(Emphasis added.)

* * *

21. Additionally, Florida Administrative Code Rule 60P-

6.0081 reads:

(3) Initial requests for reimbursement for

expenses incurred during a participant’s

period of coverage must be postmarked or

received if not mailed , at the Department no

later than April 15 following the prior Plan

Year. (Emphasis added.)

22. Section 110.161(8), Florida Statutes, and Florida

Administrative Code Rule 60P-6.010, provide that any funds

remaining in the participant’s plan account are forfeited if

claims for reimbursement are not properly filed by the filing

deadline.

23. In the present case, the Petitioner attempted to mail

his reimbursement request. The claim was not received by the

Respondent’s processing agent. Therefore, the issue is whether

the evidence is sufficient to demonstrate that Petitioner’s

claim was postmarked before the April 17, 2006, deadline for

submission of FSA claims.

24. The evidence showed that Petitioner placed the

envelope containing his reimbursement request in his inter-

office mail. He did not deliver the envelope to the U.S. Postal

Service. There is no evidence that the envelope was picked up

or delivered to the U.S. Postal Service by his agency’s

mailroom.

25. A rebuttable presumption that mail has been received

arises after proof that the mail was correctly addressed and

actually delivered to the U.S. Postal Service, Star Lakes Estate

Ass’n., Inc. v. Auerbach , 656 So. 2d. 271 (Fla.3 DCA, 1995);

W.T.Holding, Inc. v. State Agency for Health Care

Administration , 682 So. 2d 1224, 1225 (Fla. 4th DCA 1996);

Camerota v. Kaufman , 666 So. 2d 1042, 1045 (Fla. 4th DCA 1996);

and Getelman v. Levey , 481 So. 2d 1236, 1239 (Fla. 3 DCA, 1985).

26. Petitioner’s inter-office mail was not controlled by

the U.S. Postal Service. Use of such mail is insufficient

evidence to demonstrate that Petitioner’s reimbursement request

was deposited in the U.S. Mail and does not establish a

presumption in favor of Petitioner that his claim was received

by the Respondent or postmarked by the U.S. Postal Service.

27. Moreover, Respondent has shown that FBMC personnel

charged with the responsibility of maintaining correspondence

conducted a reasonable and diligent search in order to locate

the envelope containing the reimbursement form in question. No

documents relating to the claim were found.

28. Section 90.302, Florida Statutes, states:

Section 90.302. Classification of Rebuttable

Presumptions

Every rebuttable presumption is either:

(1) A presumption affecting the burden of

producing evidence and requiring the trier

of fact to assume the existence of the

presumed fact, unless credible evidence

sufficient to sustain a finding of the

nonexistence of the presumed fact is

introduced, in which event, the existence or

nonexistence of the presumed fact shall be

determined from the evidence without regard

to the presumption; or

(2) A presumption affecting the burden of

proof that imposes upon the party against

whom it operates the burden of proof

concerning the nonexistence of the presumed

fact.

29. The presumption of receipt upon proper mailing is

characterized as a “bursting bubble” presumption. It is a

presumption established primarily to facilitate the

determination of an action or event that generally should follow

from the facts in evidence. Thus, the existence or occurrence

of the presumed fact, such as receipt through the mail, is

assumed unless credible evidence sufficient to sustain a finding

of the non-existence of the presumed fact is introduced. See ,

Berwick v. Prudential Property and Cas. Ins. Co. , 436 So. 2d

239, (Fla. 3d DCA, 1983); Cheryl and Richard Luten,

individually, and as parents and natural guardians of Kaille

Morgan Luten, a minor v. Florida Birth-Related Neurological

Injury Compensation Association , DOAH Case No. 95-3708N,

September 23, 1996; International Alliance of Theatrical Stage

Employees and Moving Pictures Technicians, Artists and Allied

Crafts of U.S., its Territories, and Canada Local 500 v.

International Alliance of Theatrical Stage Employees and Moving

Picture Machine Operators Holding Co., Inc. , 902 So. 2d 959,

(Fla. 4 th DCA, 2005); and David J. Russ v. Tallahassee-Leon

County and Department of Community Affairs, and School Board of

Leon County , DOAH Case No. 97-2950.

30. In Seglin Const. Co. v. State , 22 N.Y.S.2d 94, (N.Y.

Ct. Cl. 1940), the court found that the evidence presented was

sufficient to overcome the presumption of receipt upon proper

mailing. The court’s description of the evidence presented in

opposition to the presumption was very similar to that offered

in this case. The Seglin court wrote in relevant part:

The Attorney General called witnesses who

described the method of receiving, opening

and indexing mail in the office of the State

Department of Public Works and other

witnesses who described their search for the

document. This testimony amounts to a

denial by the defendant that the letter was

ever received. Elmore v. Busseno, 175

App.Div.233, 161 N.Y.S. 533; Cashman, Inc.

v. Spellman, 233 App.Div. 45, 251 N.Y.S.

240. Upon it and upon all the circumstances

surrounding the transaction we believe that

the presumption has been overcome and we

find and hold that Exhibit 24 was never

received by the State of New York.

See also Department of Health and Rehabilitative Services v.

Pinellas Nursing Care, Inc. , DOAH 82-0844, Recommended Order,

August 11, 1982.

31. Here, the evidence was sufficient to overcome the

presumption of receipt upon proper mailing. In the absence of

the presumption of receipt, Petitioner has failed to prove that

his request was timely, as required by Florida’s plan.

Therefore, Petitioner is not entitled to reimbursement and the

request for hearing should be dismissed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is:

RECOMMENDED that the Respondent issue a Final Order finding

that Petitioner did not timely file his reimbursement request,

is not entitled to reimbursement and dismissing the request for

hearing.

DONE AND ENTERED this 14th day of December, 2007, in

Tallahassee, Leon County, Florida.

S

DIANE CLEAVINGER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of December, 2007.

COPIES FURNISHED :

Linda South, Secretary

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

John Brenneis, Esquire

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

James D. Wells, Jr.

Department of Highway Safety

and Motor Vehicles

2900 Apalachee Parkway, Mail Stop 47

Tallahassee, Florida 32399

Sonja P. Matthews, Esquire

Department of Management Services

Office of the General Counsel

4050 Esplanade Way, Suite 260

Tallahassee, FL 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the final order in this case.