13-000351 Linda S. Shaul vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Wednesday, June 5, 2013.

Summary: Respondent has no authority to pay more than six months retroactive subsidy benefits.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LINDA S. SHAUL ,

Petitioner ,

vs. Case No. 13 - 0351

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF

RETIREMENT ,

Respondent .

/

RECOMMENDED ORDER

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

on March 29, 2013, in Tallahassee, Florida, before Lynne A.

Quimby - Pennock, a duly - designated Administrative Law Judge of the

Division of Administrative Hearings (DOAH).

APPEARANCES

For Pet itioner: Philip J. Lipten, Esquire

Suite 5

800 North Ferncreek Avenue

Orlando, Florida 32803 - 4127

For Respondent: Geoffrey M. Christian, Esquire

Department of Manag ement Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to receive retroactive

retiree health insurance subsidy b enefit payments in addition to

those already received.

PRELIMINARY STATEMENT

On October 24, 2012, the Department of Management Services,

Division of Retirement (Respondent or Division) , issued a denial

letter informing Linda S. Shaul (Petitioner or Ms. Sha ul) that

the Division was not able to provide additional health insurance

subsidy benefits retroactively to October 2006. Petitioner

timely requested a formal hearing to contest the denial, and the

matter was referred to DOAH on January 22, 2013.

The case was set for the final hearing for March 29, 2013.

The hearing took place as scheduled.

At hearing, Petitioner testified on her own behalf.

Petitioner ' s Exhibits A and (composite) B 1/ were received into

evidence. The Division presented the testimony of its benefit

administrator, Robin Collins. The Division ' s Exhibits A

through H were received into evidence. The parties provided a

" Joint Response to [the] Pre - Hearing Order , " which contained 17

" Facts Which are Admitted. " Some of those facts are utili zed

below.

At the conclusion of the hearing, Petitioner ' s counsel

requested to file Petitioner ' s p roposed r ecommended o rder (PRO)

within 30 days from the filing of the Transcript. No objection

was heard from Respondent ' s counsel, and the request was gran ted.

The Transcript was filed on April 15, 2013. On May 15, 2013,

Petitioner ' s counsel filed a motion for extension of time in

which to file the PROs. Respondent did not object to the

extension , and the motion was granted. Petitioner timely filed

her P RO , which has been considered in the preparation of this

Recommended Order. Respondent ' s PRO was filed on May 23, 2013,

but was given consideration because it was only one day late, and

the Recommended Order had not been finalized at that point.

Reference s to the Florida Statutes will be to the 2012

version unless otherwise noted.

FINDING S OF FACT

1. Respondent is charged with managing, governing, and

administering the Florida Retirement System (FRS). The FRS is a

state - administered retirement system as defined by Florida law.

2. The health insurance subsidy (HIS) benefit is a program

provided by Florida S tatutes to help offset the cost of a

retiree ' s monthly medical insurance premiums. Currently , the

amount paid is $5 times the years of creditable stat e service at

the time of the retirement calculations. Only those people who

were members of the FRS, who apply for and receive monthly

retirement benefits are eligible for the HIS.

3. Ms. Shaul worked for the Florida Department of Children

and Families ( DCF), and its predecessor, the Department of Health

and Rehabilitative Services , for 35 years. She was enrolled in

the defined benefit plan of the FRS and earned creditable service

in the FRS.

4. In October 2001, Ms. Shaul began her participation in

the FRS Deferred Retirement Option Program (DROP).

5. In June 2006, the Division provided Ms. Shaul certain

forms, brochures and informational material relevant to her DROP

participation termination. Via the cover letter, Ms. Shaul was

advised in pertinent p art:

When your name is added to the retired

payroll, you will receive a " retiree packet "

that contains an information letter, " After

you Retire " booklet, W - 4P " Withholding

Certificate for Pension Payments, " Health

Insurance Subsidy application, and Direct

Deposit Authorization. The retiree packet is

mailed approximately one week before you

receive your first monthly benefit.

6. In September 2006, Ms. Shaul completed the DROP

termination forms and returned them to the Division.

7. On October 1, 2006, M s. Shaul retired from her state

position. As a prior state employee, Ms. Shaul is a member of the

FRS. In mid - October 2006, the Division paid Ms. Shaul her DROP

payout. At the end of October 2006, the Division paid Ms. Shaul

her first monthly service re tirement benefit.

8. A copy of the retiree packet sent to Ms. Shaul is not

reflected in her file, as the Division did (and does) not place

copies of forms or booklets sent automatically. It is the

Division ' s practice to send each retiree added to the sys tem a

retiree packet that includes, among other things, an application

for the HIS and an explanation of the subsidy, as well as a

booklet containing an explanation of all of the benefits available

to retirees and beneficiaries under the FRS. There was no

evidence that these forms or booklets were not automatically sent

to Ms. Shaul.

9. It is the responsibility of an FRS retiree to apply for

the HIS benefit. In the event an FRS retiree does not apply for

the HIS benefit, the Division will send a reminder memorandum

notifying each retiree that their HIS application has not been

received and encourag ing them to file for it.

10. In January or early February 2007, Ms. Shaul received a

statement indicating that her HIS benefits were not being paid.

Ms. Shaul contacted the Division and requested that the

appropriate application form be provided to her. Ms. Shaul

received the application and completed it ; however, she did not

return the application in a manner that could be traced, i.e. , via

certified or regis tered mail . T he Division has no record of

receiving this 2007 application.

11. For the next several years, Ms. Shaul did not follow up

on the HIS benefit to ensure that she was being properly

reimbursed. Each year she would receive her financial stateme nt

from the State and immediately provide it to her accountant for

tax preparation. In January 2010 , Ms. Shaul telephoned the

Division to inquire about the HIS benefit. During the 2007 - 2012

period, the Division sent out newsletters and other notices to a ll

retirees specifically referencing the HIS. 2 /

12. The Division reviewed Ms. Shaul ' s service folder via its

Integrated Retirement Information System. The Division

established Ms. Shaul ' s HIS benefit effective date as July 1,

2009, based on her January 2010 telephone call to the Division,

and the fact that her health insurance premiums were being

deducted from her monthly service retirement benefit payment.

13. The Division ' s record substantiates that Ms. Shaul was

paid HIS benefits totaling $1,200.00 ( $300 for the months of

January and February 2010, and $900 for the six months of

retroactive benefits from July 1, 2009 , through December 2009). 3 /

14. The Division issued a notice of final agency action on

October 24, 2012, wherein Ms. Shaul was advised that her verbal

application for the HIS benefit during the January 2010 telephone

call was the earliest record of a HIS benefit being requested on

her behalf.

15. The issue is not whether Ms. Shaul remembers completing

the HIS benefit application, but whe n the Division received the

application.

16. The credible, persuasive evidence in the record

establishes that Ms. Shaul contacted the Division in January 2010

and received the HIS benefit payment for the prior six months.

CONCLUSIONS OF LAW

17. The Div ision of Administrative Hearings has jurisdiction

over the parties and subject matter of this proceeding.

§§ 120.569 & 120.57(1), Fla . Stat.

18. The burden of proof is on the party asserting the

affirmative of an issue before an administrative tribunal , unless

the burden is established otherwise by statute. Young v. State,

Dep ' t of Cmty. Aff. , 567 So. 2d 2 (Fla. 3rd DCA 1990); Balino v.

Dep ' t of HRS , 348 So. 2d 349 (Fla. 1st DCA 1977).

19. Petitioner has the burden of proof in this proceeding by

a pr eponderance of the evidence. § 120.57(1)(j).

20. The preponderance of the evidence standard requires

proof by " the greater weight of the evidence, " Black ' s Law

Dictionary , 1201 (7th ed. 1999), or evidence that " more likely

than not " tends to prove a cert ain proposition. See Gross v.

Lyons , 763 So. 2d 276, 289 n.1 (Fla. 2000).

21. Section 112.363, Florida Statutes (2006) , provides in

pertinent part:

(2) ELIGIBILITY FOR RETIREE HEALTH INSURANCE

SUBSIDY. --

(a) A person who is retired under a state -

admin istered retirement system . . . is

eligible for health insurance subsidy

payments provided under this section . . .

(b) For purposes of this section, a person

is deemed retired from a state - administered

retirement system when he or she terminates

employm ent with all employers participating

in the Florida Retirement System as described

in s. 121.021 (39) and:

* * *

2. For a member of the Florida Retirement

System defined benefit program, or any

employee who maintains creditable service

under both the defined benefit program and the

Public Employee Optional Retirement Program,

the member begins drawing retirement benefits

from the defined benefit program of the

Florida Retirement System .

* * *

(d) Payment of the retiree health insurance

subsidy shall be made only after coverage for

health insurance for the retiree . . . has

been certified in writing to the Department

of Management Services. Participation in a

former employer ' s group health insurance

program is not a requirement for eligibility

u nder this section.

* * *

(3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT. Ï

* * *

(e)1. Beginning July 1, 2001, each eligible

retiree of the defined benefit program of the

Florida Retirement System . . . shall receive

a monthly retiree health insur ance subsidy

payment equal to the number of years of

creditable service, as defined in

s. 121.021 (17), completed at the time of

retirement multiplied by $5; however, no

eligible retiree or beneficiary may receive a

subsidy payment of more than $ 150 or less than

$30. . . . The health insurance subsidy

amount payable to any person receiving the

retiree health insurance subsidy payment on

July 1, 2001, shall not be reduced solely by

operation of this subparagraph.

(7) ADMINISTRATION OF SYSTEM. -- T he

Department of Management Services may adopt

such rules and regulations as are necessary

for the effective and efficient

a dministration of this section. The cost of

administration shall be appropriated from the

trust fund.

* * *

(9) BENEFITS. -- Su bsidy payments shall be

payable under the retiree health insurance

subsidy program only to participants in the

program or their beneficiaries, beginning with

the month the division receives certification

of coverage for health insurance for the

eligible re tiree or beneficiary. If the

division receives such certification at any

time during the 6 months after retirement

benefits commence, the retiree health

insurance subsidy shall be paid retroactive to

the effective retirement date. If, however,

the divisi on receives such certification 7 or

more months after commencement of benefits,

the retroactive retiree health insurance

subsidy payment will cover a maximum of 6

months. Such subsidy payments shall not be

subject to assignment, execution, or

attachment o r to any legal process whatsoever.

22. Florida Administrative Code Rule 60S - 4.020(1999)

provides in pertinent part:

1. A monthly retiree health insurance

subsidy shall be paid to each eligible

retired member . . . receiving a benefit from

a state - admin istered retirement system. . . .

* * *

2. Health insurance coverage for the retiree

or beneficiary must be certified in

accordance with procedures established by the

Division. If the Division receives such

certification within 6 months after

retire ment benefits commence, the Retiree

Health Insurance Subsidy shall be paid

retroactive to the effective retirement date.

However, if the Division receives the

certification of insurance coverage 6 or more

months after retirement benefits commence,

the mem ber will be eligible to receive

retroactive payments for a maximum of 6

months only.

3. The Retiree Health Insurance Subsidy

shall be paid to eligible persons by the

Division. The amount of the monthly retiree

health insurance subsidy payment shall be

e qual to the number of years of creditable

service included in the calculation of the

member ' s retirement benefit multiplied by:

* * *

(d) $5, beginning January 1, 1999, the

subsidy amount not to exceed $150, or be less

than $50.

2 3 . Section 112.36 3 limits retroactive payment of HIS

benefits to a maximum of six months. The Division has no

authority to pay more than six months retroactive HIS benefits.

This is a legislative limitation giving no discretion to the

Division.

2 4 . Section 112.363 does not impose a duty on the Division

to repeatedly notify or remind retirees of the HIS. However, the

Division sends numerous notices or publications to all retirees

specifically referencing the HIS.

2 5 . There is no dispute that Ms. Shaul is entitled to

rec eive, and does receive, the HIS benefit as described above.

The only question is whether she should receive additional

retroactive benefits amounting to approximately $4,950.

2 6 . The persuasive evidence establishes that Ms. Shaul

requested and received h er HIS benefit beginning in January 2010

and for the six months prior to January 2010. Ms. Shaul has

received the maximum retroactive HIS benefit allowed by law.

Ms. Shaul is not entitled to any additional HIS benefit payments.

RECOMMENDATION

Based on t he foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Retirement, issue a f inal o rder denying

Ms. Shaul ' s request for additional HIS benefits retroactive to

the date of her terminat ion of DROP.

DONE AND ENTERED this 5 th day of June , 2013 , in Tallahassee,

Leon County, Florida.

S

LYNNE A. QUIMBY - PENNOCK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee P arkway

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 5 th day of June , 2013 .

ENDNOTE S

1/ At the beginning of the hearing both parties agreed to the

admission of all the exhibits. During Petitioner ' s case - in -

chief , no testimony was elicited that would shed light on

Petitioner ' s two exhibits.

2 / Ms. Shaul admitted to receiving a notice regarding the HIS

benefit in the spring 2007, but she did not follow up on her HIS

application because she thought it had been sent.

3 / The parties agreed that Ms. Shaul received $1,200.00 in HIS

benefits. This appears to be $300.00 more than allowed by law;

however, there was no request for the retur n of the alleged over

payment, [ calculation $150 .00 (maximum amount allowed for years

of service) x 6 months equals $900.00 ] .

COPIES FURNISHED:

Dan Drake, Director

Division of Retirement

Department of Management Services

Post office Box 9000

Tallahassee , Florida 32315 - 9000

Jason Dimitris, General Counsel

Department of Management Services

4050 Espl a nade Way, Suite 160

Tallahassee, Florida 32399 - 0950

Geoffrey M. Christian, Esquire

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

Philip J. Lipten, Esquire

Suite 5

800 North Ferncreek Avenue

Orlando, Florida 32803 - 4127

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.