93-003729 William Steve Lang vs. Division Of State Employees Insurance Status: Closed Recommended Order on Friday, September 24, 1993.

Summary: P health benefit claim denied under state employee group health plan pre-ex- isting conditions limitations. P was given earliest possible effective date.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIAM STEVE LANG, )

)

Petitioner, )

)

vs. ) CASE NO. 93-3729

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF STATE )

EMPLOYEES' INSURANCE, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

On August 31, 1993, a formal administrative hearing was held in this case

in Clearwater, Florida, before J. Lawrence Johnston, Hearing Officer, Division

of Administrative Hearings.

APPEARANCES

For Petitioner: William Steve Lang, pro se

2233 Willowbrook  D r i v e

Clearwater, Florida 34624

For Respondent: Augustus D. Aikens, Jr., Esquire

Department of Management Services

2002 Old St. Augustine Road, B-12

Tallahassee, Florida 32301-4876

STATEMENT OF THE ISSUE

The issue in this case is whether the Petitioner's health care expenses for

a condition diagnosed on August 26, 1992, should be covered under his state

employees' group health insurance, or whether coverage for the diagnosis should

be denied under the pre-existing conditions limitation of the plan.

PRELIMINARY STATEMENT

On or about April 22, 1993, the Respondent, the Department of Management

Services, Division of State Employees' Insurance (DSEI), notified the

Petitioner, William Steve Lang, that it was denying the Petitioner's claim under

his state employees' group health insurance for health expenses relating to a

condition diagnosed on August 26, 1992, on the ground that they were for a pre-

existing condition not covered by the health insurance plan.

The Petitioner requested formal administrative proceedings under Section

120.57, Fla. Stat. (Supp. 1992), and the matter was referred to the Division of

Administrative Hearings on July 1, 1993. By Notice of Hearing issued on August

2, 1993, final hearing was scheduled for August 31, 1993, in Clearwater,

Florida.

At the final hearing, the Petitioner testified in his own behalf and called

one additional witness. He also had Petitioner's Exhibits 1 through 7 admitted

in evidence. The Respondent called one witness and had Respondent's Exhibits 1

through 5 admitted in evidence.

Neither party ordered the preparation of a transcript of the final hearing,

and the parties were given ten days in which to file proposed recommended

orders. Explicit rulings on the proposed findings of fact contained in the

parties' proposed recommended orders may be found in the attached Appendix to

Recommended Order, Case No. 93-3729.

FINDINGS OF FACT

1. Before being hired by the University of South Florida (USF), St.

Petersburg campus, to start August 1, 1992, the Petitioner taught college in

Georgia. At his college in Georgia, the Petitioner was insured under a private

employee group health insurance policy and had the option, under the federal

Consolidated Omnibus Budget Reconciliation Act (COBRA), to maintain coverage

under that insurance.

2. The Petitioner visited his new campus on or about May 22 and June 28,

1992. While there in June, he filled out various personnel forms required in

advance of his start date. Possibly because the chief USF personnel officer at

the St. Petersburg campus was on vacation, he was not told about the available

state employees' group health care plans or the requirement that, if he wanted

to enroll in one before the next open enrollment period, he had to select one of

within 31 days of his starting employment date.

3. The Petitioner started work, as scheduled, on August 1, 1992. He first

pay check was dated August 21, 1992, and covered the two-week pay period from

July 28 through August 13, 1992. There were no deductions from the Petitioner's

pay for health insurance, as he had not enrolled in any state employees' group

health plan.

4. On August 20-21, 1992, the Petitioner participated in a new faculty

orientation program during which he became aware of the state employees' group

health care plans and the requirement that he enroll within 31 days of beginning

employment if he wanted to enroll in one before the next open enrollment period.

5. Before taking any steps to enroll in any of the state employees' group

health care options, the Petitioner took ill on or about August 24, 1993. His

symptoms were new to him and included chest pain and rapid heart rate. The next

day, August 25, 1992, he went to see the chief personnel officer at USF, St.

Petersburg, to discuss his options and enroll in one of them. (At least by this

time, he had available for his review an informational brochure summarizing the

state employees' group health insurance plan.) He chose the state employees'

group health insurance plan and enrolled.

6. The personnel officer filled out the enrollment forms for coverage to

begin September 1, 1993. In order to obtain a September 1st effective date of

coverage, it was necessary to "triple deduct" employee contributions towards the

insurance premiums in the Petitioner's next pay check so that the premium for

coverage in September would be paid. (Normal deductions out of September's pay

checks would go to pay the premiums for coverage in October, 1992.)

7. The Petitioner discussed with the personnel officer whether it was

possible to get an earlier effective date by paying the first month's premium by

personal check. The personnel officer advised him that USF does not accept

personal checks for this purpose and that, in any event, no effective date

earlier than September 1, 1992, could be obtained in this way.

8. The next day, August 26, 1992, the Petitioner went to see a physician

who was on the state employees' group health insurance preferred provider plan

for diagnosis and treatment of his condition. Not surprisingly, since the

Petitioner had submitted his enrollment forms through his personnel office only

the day before, the physician was unable to verify coverage, and the Petitioner

paid the fees for services out-of-pocket. He anticipated that he would be

reimbursed by his new insurance, or that his out-of-pocket expenditures would

serve to fulfill, in whole or in part, the deductibles under his new insurance.

9. On or about September 2, 1992, the Petitioner returned to his physician

for additional health care services in connection with his condition.

(Ultimately, it was determined that the Petitioner suffered from mitral valve

prolapse and supraventricular tachycardia that was successfully treated with

beta blocker therapy.) The physician's office still could not verify insurance

coverage, and the Petitioner again paid the fee for services in cash. The

Petitioner discussed the situation with the USF, St. Petersburg, chief personnel

officer, and they decided that the information concerning the Petitioner's

enrollment had not been entered in the computer system yet.

10. Later in September, 1992, the Petitioner again returned to his

physician for additional health care services in connection with his condition.

The physician's office still could not verify insurance coverage. At the very

end of September, the Petitioner received an explanation of benefits (EOB) from

Blue Cross Blue Shield (BCBS), the plan administrator, indicating that the

Petitioner's contract of insurance could not be located.

11. The Petitioner again went to discuss the matter with the USF, St.

Petersburg, chief personnel officer. She sent DSEI a memorandum, with the

Petitioner's enrollment form attached, asking for verification that the

Petitioner's coverage was in effect. Meanwhile, the Petitioner decided to

postpone further health care services until he received a response from DSEI.

12. Later in October, 1992, the Petitioner was advised by his physician's

office that verification of the Petitioner's coverage had been received. The

Petitioner returned to the physician's office for additional health care

services in connection with his condition on or about October 9 and 19, 1992.

13. At approximately the end of October, 1992, the Petitioner received an

EOB form from BCBS, dated October 25, 1992, advising the Petitioner and his

physician that BCBS needed and was awaiting verification, in the form of office

records and the history and physical, of the condition for which the Petitioner

was treated.

14. On or about October 30, 1992, the Petitioner scheduled an appointment

with the USF, St. Petersburg, chief personnel officer to discuss the

Petitioner's insurance options. Open enrollment closed the next day, and the

Petitioner had to decide whether to keep his coverage or switch to a health

maintenance organization, or seek coverage under his wife's employee group

insurance coverage and possibly drop his own insurance. He chose to keep his

state employees' group health insurance.

15. In early November, 1992, the Petitioner received another EOB form from

BCBS, dated November 4, 1992, advising the Petitioner and his physician that

BCBS still was waiting for additional information from the Petitioner's

physician's office in connection with the services provided on September 2,

1992.

16. At the end of December, 1992, the Petitioner received a statement from

his physician's office indicating that DSEI was denying all of the Petitioner's

claims as "pre-existing."

17. In pertinent part, the state employees' group health insurance plan

lists under its "limitations":

For any accident or illness for which an

insured received diagnostic treatment or

received services within three-hundred and

sixty-five (365) consecutive days prior to

the effective date of coverage, no payment

will be allowed for services related to such

accident or illness which is received during

the three hundred and sixty-five (365)

consecutive days subsequent to the effective

date of coverage; however, covered services

related to such accident or illness which are

received after three hundred and sixty-five

(365) consecutive days of coverage are covered

by the Plan.

A verbatim reproduction of this limitation is included in the informational

brochure which the Petitioner was provided and reviewed no later than August 25,

1992.

CONCLUSIONS OF LAW

18. F.A.C. Rule 60P-2.004(1) provides:

The effective date of coverage requested by

the employing agency for enrollment or changes

in coverage in the Health Plan by an employee

shall always be the first day of a month,

subject to the following:

(a) Subject to the requirements of subsection

(2), the requested effective date shall be no

later than the first day of the month for

which a full month's premium may be deducted

using single deductions based upon the

employee's signature date on the New Enrollee

or Change of Information form.

(b) The requested effective date shall be no

earlier than the first day of the month

following the employee's signature date on

the New Enrollee or Change of Information

form; however, in no case shall such effective

date be prior to or on the employee's

employment date.

Under this rule, the earliest effective date the Petitioner could have received

for coverage under the state employees' group health insurance plan was

September 1, 1992.

19. Under the limitations of the plan, the Petitioner would not be covered

for his August 26, 1993, diagnosis until September 1, 1993.

20. The Petitioner has complained about various things in connection with

his experiences with the state employees' group health insurance plan, DSEI and

BCBS. These complaints include the alleged deficient method of notification to

employees that their coverage is in effect and alleged delays, beyond alleged

BCBS policy guidelines, in notifying the Petitioner that his claims were being

denied. He apparently hopes that these complaints will support an argument that

his claims should be paid, but they do not.

21. The Petitioner also claims that, had he been timely notified that he

was not covered, he could have taken other steps to secure coverage, such as

extend coverage under his previous private employees' group health insurance

policy under the terms of COBRA, switch to a health maintenance organization, or

seek coverage under his wife's employee group insurance coverage. Essentially,

he is arguing that DSEI should be estopped from denying coverage.

22. The Petitioner's estoppel argument fails for at least one essential

reason. The facts indicate that the essential reason why the Petitioner made

less-than-optimum decisions with regard to his health insurance coverage was

that he (and, apparently, his physician) did not comprehend the pre-existing

conditions limitation of the state employees' group health insurance plan.

Throughout the fall of 1992, he seemed to be operating under the assumption

that, once it was verified that coverage was effective, his claims would be

paid. Only some time after he received notification in December, 1992, that

DSEI was denying his claims under the pre-existing conditions limitation did the

Petitioner begin to focus his efforts on getting an earlier effective date of

coverage established. The Petitioner has not claimed, nor is there any

evidence, that DSEI made misrepresentations that somehow misled the Petitioner

regarding the pre-existing conditions limitation.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

recommended that the Respondent, the Department of Management Services, Division

of State Employees' Insurance, enter a final order denying the Petitioner's

claims.

RECOMMENDED this 24th day of September, 1993, in Tallahassee, Florida.

___________________________

J. LAWRENCE JOHNSTON

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the

Division of Administrative Hearings

this 24th day of September, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3729

To comply with the requirements of Section 120.59(2), Fla. Stat. (1991),

the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

Legal Argument 1

Understanding

1. Accepted as to the earlier treatment, and incorporated; rejected as to

the later treatment.

2. Rejected as not proven and contrary to the facts found. (Both the

"turn-around" and the insurance card provided this information. It also could

have been verified by DSEI on telephone or written request.)

3. Accepted and incorporated.

4. Accepted that the information was disseminated, but subordinate and

unnecessary. Rejected that DSEI "discounted" it.

5. Rejected that the provider "paid partial claims." Otherwise, accepted

and incorporated to the extent not subordinate or unnecessary. (Once basic

coverage was verified, the provider processed the claims, but the provider made

no determination as to the pre-existing conditions limitation, nor did the

provider have any authority to do so.)

6. Rejected as not proven that none of the information was "available to

new employees." (Some is distributed to new employees, and some is available in

personnel offices upon request.)

7. Accepted but subordinate to facts contrary to those found. (It was not

proven and was not found that the triple deduction occurred during the first two

weeks of August. She may have meant to say September.)

8. Accepted but subordinate and unnecessary. (The term "performance date"

is ambiguous.)

Consideration

1.-2. Rejected as not proven and contrary to facts found. (Enrollment was

effective September 1, 1992, as requested by the Petitioner. The Petitioner was

unable to verify the enrollment date until October, 1992. The Petitioner got

coverage effective September 1, 1992, subject to the plan's pre-existing

conditions limitation (among others), a concept the Petitioner never fully

understood.

Performance

1. Rejected as not proven and contrary to facts found. See above.

2. Rejected as not proven and contrary to facts found. (The first claims

were paid in cash, to be applied to the deductible. The EOB dated October 25,

1992, first raised the question of the pre-existing conditions limitation by

requesting verification of the condition being treated on September 18, 1992.)

Also, subordinate and unnecessary.

3. Accepted but subordinate and unnecessary. (The provider is not

authorized to approve claims and was assuming coverage without considering the

pre-existing conditions limitation.)

4. Accepted (for a September 1, 1992, effective date) and incorporated.

Legal Argument 2

(The Petitioner's argument, that the DSEI defense is "mute," falls on deaf

ears.)

1.-2. Rejected as not proven. (The typed form was not placed in

evidence.) Also, subordinate and unnecessary.

3. Accepted but subordinate and unnecessary.

4. Rejected as not proven. (The typed form was not placed in evidence.)

Also, subordinate and unnecessary.

5. Rejected as not proven. Also, ambiguous, subordinate and unnecessary.

Legal Argument 3

1. Rejected as not proven. Also, subordinate and unnecessary.

2. Cumulative. See above.

3. Accepted but subordinate to facts contrary to those found, and

unnecessary. (The provider has no authority to determine claims and obviously,

like the Petitioner, did not have a full comprehension of the pre-existing

conditions limitation in the state plan.)

4. Rejected as not proven and contrary to the greater weight of the

evidence.

5. Cumulative. See above.

6. Rejected as not proven and contrary to the greater weight of the

evidence. As to a.), USF policies interfered with the operation of the

insurance program in that respect; as to b.), cumulative.

7. Cumulative. See above.

Respondent's Proposed Findings of Fact.

1. Rejected as contrary to facts found. (The start date was August 1,

1992.)

2.-7. Accepted and incorporated to the extent not subordinate or

unnecessary.

COPIES FURNISHED:

William Steve Lang

2233 Willowbrook Drive

Clearwater, Florida 34624

Augustus D. Aikens, Jr., Esquire

Department of Management Services

2002 Old St. Augustine Road, B-12

Tallahassee, Florida 32301-4876

William Lindner, Secretary

Department of Management Services

Knight Building, Suite 307

Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0950

General Counsel

Department of Management Services

Knight Building, Suite 309

Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the Department of Management Services

written exceptions to this Recommended Order. All agencies allow each party at

least ten days in which to submit written exceptions. Some agencies allow a

larger period within which to submit written exceptions. You should consult

with the Department of Management Services concerning its rules on the deadline

for filing exceptions to this Recommended Order.