97-002991 Kellie Brown vs. Division Of Retirement Status: Closed Recommended Order on Monday, November 17, 1997.

Summary: Petitioner was mistaken that sheriff's office gave Health Insurance Subsidy (HIS) form. Petitioner is not entitled to retroactive benefits.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KELLIE BROWN, )

)

Petitioner, )

)

vs. ) Case No. 97-2991

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

A formal hearing was held by the Division of Administrative

Hearings, before Administrative Law Judge, Daniel M. Kilbride, in

Orlando, Florida, on October 1, 1997. The following appearances

were entered:

APPEARANCES

For Petitioner: Thomas J. Pilacek, Esquire

Maitland Green

601 South Lake Destiny Road, Suite 601

Maitland, Florida 32751

For Respondent: Stanley M. Danek, Esquire

Department of Management Services

Division of Retirement

Cedars Executive Center

2639 North Monroe Street, Building C

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether the Petitioner, Kellie Brown, on behalf of her minor

son, Brandon Brown, is entitled to payment of the Health

Insurance Subsidy on the retirement account of Corporal Arthur

"Donnie" Brown, deceased, for the period of February 1, 1994,

through and including September 1996.

PRELIMINARY STATEMENT

By letter dated June 10, 1997, the Director of the Division

of Retirement denied Petitioner's application for retroactive

survivor benefits filed on behalf of her son. Petitioner

subsequently filed a Petition for a Formal Hearing with the

Respondent, and this matter was referred to the DOAH on July 1,

1997, for a formal hearing. Following discovery a formal hearing

was held on October 1, 1997.

At the hearing, the undersigned took official recognition of

Section 112.363, Florida Statutes, Rule 60S-4.020, Florida

Administrative Code, and Mirabella v. Division of Retirement , DOR

Case No. 96-05, issued April 17, 1996, and the opinion of the 1st

DCA, dated March 7, 1997. Petitioner testified in her own behalf

and called one witness to testify. One exhibit was offered in

evidence. Respondent offered the testimony of two witnesses and

five documents were admitted in evidence. The hearing was

recorded but not transcribed.

Following the order granting the Motion for Extension of

Time for filing proposed recommended orders, Petitioner filed her

proposals on October 17, 1997, and Respondent filed its proposals

on October 22, 1997. Both parties' proposals have been given

careful consideration and adopted when supported by a

preponderance of the credible evidence.

FINDINGS OF FACT

1. Kellie M. Brown (Petitioner) is the natural mother and

guardian of Brandon D. Brown, a minor child, whose deceased

father was Donnie Brown.

2. At the relevant times, Donnie Brown was employed by the

Orange County Sheriff's Office (Sheriff's Office) as a deputy

with the rank of Corporal, and was a compulsory member of the

Florida Retirement System (FRS).

3. On or about January 16, 1994, Cpl. Brown disappeared

from public view and did not report for duty with the Sheriff's

office. His last day of work was listed as January 15, 1994. He

was subsequently terminated from his position for failure to

report for duty.

4. His body was later found on March 15, 1994, and after

examination by the county medical examiner, it was determined

that his date of death was January 15, 1994. Based on this

determination, survivorship benefits became available to Brandon

Brown as if his father had died while still employed with the

sheriff's office.

5. The Petitioner is the former spouse of the deceased.

After the discovery of the body, the Sheriff's office offered to

assist Petitioner in the completion and transmission of the

necessary paperwork to obtain available benefits.

6. The Sheriff's Office enrolled Brandon under its health

insurance plan for one year at no cost to the Petitioner.

7. In March 1994, Petitioner visited the personnel office

of the Sheriff's Office. She was given many forms and

applications to sign in order to obtain benefits for her son.

8. Petitioner testified that one of the forms in the packet

of material was the Health Insurance Subsidy (HIS) application

form of the Respondent. She claimed it was given to her in a

manila folder by Barbara Hill, a personnel specialist with the

Sheriff's Office. Petitioner later had another conversation with

Ms. Hill in which the Petitioner wanted to know where the

completed form was and insisted that the HIS form was in the

material given to her by Ms. Hill. Petitioner then stated that

Ms. Hill called the offices of the Respondent in Tallahassee and

was told that her son was not eligible for the HIS payment.

Thereafter, Petitioner stated that she did not pursue the issue.

9. On behalf of her minor son, the Petitioner applied for

and began receiving a FRS retirement benefit on the account of

Cpl. Brown, effective July 1994 and retroactive to February 1994.

10. After Brandon's name was added to the retired payroll,

in July 1994, Petitioner was notified by mail from the Respondent

that Brandon was also eligible for payment of a HIS, which is a

benefit separate from the retirement benefit that is paid to

retirees and their beneficiaries to help offset the cost of

health insurance. Petitioner did not return the HIS application

form.

11. Notification of new retirees after their name has been

added to the retired payroll about their eligibility for the HIS

is the normal and customary practice of Respondent. The HIS

application form of Respondent is not given to the employing

agency. Therefore, the Sheriff's office would not have a copy of

the form to give to Petitioner. Instead, the HIS form is sent by

the Respondent directly to the retired member or the beneficiary

after the actual retirement. The form is sent out at the same

time or shortly after the notice to the retiree that he or she

has been placed on the retired payroll. Brandon Brown was added

to the retired payroll in July 1994, retroactive to February

1994, and the notification letter form was sent to Petitioner in

July 1994. The HIS form would have been sent at that time or

shortly thereafter.

12. In early 1997, Barbara Hill reviewed the roll of

retirees because of a reengineering program instituted by the

Sheriff's office. She found three widows who were not being paid

the HIS benefits by Respondent, including Petitioner. She

contacted all three women at the request of the Sheriff's office.

Respondent sent information about the program to the women.

13. As the result of conversations between Petitioner and

Barbara Hill of the Sheriff's office, Petitioner was sent an HIS

application form by Respondent, which she completed and returned

to the Division on April 23, 1997. Brandon was added to the HIS

payroll retroactive to October 1996. The amount of the benefit

is $51.99 per month.

14. The Sheriff's office has a health insurance subsidy

program for its retired members that is similar to the FRS HIS

program and is the same dollar amount as the HIS benefit paid by

FRS. However, it is paid only to members and not to

beneficiaries so that a beneficiary like Brandon would receive

the FRS HIS payment but would not receive the Sheriff's Office

HIS payment.

15. The Respondent makes regular efforts to notify retirees

of the various benefits offered to them under FRS. As it applies

to this case, the Respondent issues a pamphlet entitled "After

You Retire" on a periodic and ongoing basis. The then current

edition was issued in October 1993, and provided on page 7,

information about the HIS. The pamphlet stated as follows:

The health insurance subsidy (HIS) is a

monthly supplemental payment that you may be

eligible to receive if you have health

insurance coverage. This monthly payment,

which you must apply for , is figured by

multiplying your total years of creditable

service at retirement (up to a maximum of 30

years) by $3. The minimum monthly subsidy is

$30 and the maximum is $90.

After your name is added to the retired

payroll, an application for the health

insurance subsidy, Form HIS-1 , will be mailed

to you. The completed application must be

returned to the Division of Retirement within

six (6) months of the date your retirement

benefits commenced if you wish to receive the

subsidy retroactive to your retirement date.

If you fail to return the form within six (6)

months, retroactive subsidy payments will be

limited to a maximum of six (6) months. It

is your responsibility to obtain

certification of health insurance coverage

and apply for the health insurance subsidy .

(emphasis in quoted material)

16. The Respondent also issued a "Retiree Newsletter" in

December 1994, and informed all retirees about updates to the HIS

program. On page 3, the Newsletter stated:

The Health Insurance Subsidy (HIS) is an

extra payment that is added to your monthly

retirement benefit to help you pay the cost

of health insurance. To be eligible for

receive the HIS payment, retirees must have

health insurance, Medicare or Champus. The

subsidy payment which you must apply for , is

$3 per month for each year of creditable

service you had earned at retirement. The

minimum monthly subsidy is $30 and the

maximum is $90.

If you believe you are eligible for the

subsidy but are not currently receiving it,

you should call or write the Disbursement

Section and request Form HIS-1, Health

Insurance Subsidy Certification. If you

apply for the HIS after you retire, you will

receive retroactive HIS payments limited to a

maximum of six months, or the number of

months you have been retired, if less than

six months. (emphasis in quoted material)

17. Petitioner was mistaken in her belief that the

application form for FRS HIS benefits was provided to her by the

Sheriff's Office in March 1994.

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this cause,

pursuant to Section 120.57(1), Florida Statutes.

19. Section 112.363, F lorida Statutes, establishes a trust

fund and administrative scheme for providing HIS. It is funded

by mandatory contributions to be made by a participating employer

during the employment of each member of FRS.

20. Section 112.363(2), Florida Statutes, provides, in

pertinent part, that "[p]ayment of the retiree health insurance

subsidy shall be made only after coverage for health insurance

for the retiree or beneficiary . . . has been certified in

writing to the Division of Retirement."

21. The Respond ent has adopted administrative rules to

implement the above statutory provision.

22. Rule 60S-4.020, Florida Administrative Code, provides

that payment to an eligible beneficiary of the HIS supplement is

compulsory:

(1) A monthly retiree health insurance

subsidy shall be paid to each eligible

retired member or beneficiary who is a spouse

or financial dependent receiving a benefit

from a state-administrated retirement system

. . .

23. Rule 60W-4.020(2), Florida Administrative Code, sets

forth the procedure for obtaining HIS benefits and retroactive

HIS benefits as follows:

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 retirement 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 member will

be eligible to receive retroactive payments

for a maximum of 6 months only.

24. Section 112.363(2), Florida Statutes, and Rule

60S-.020(2), Florida Administrative Code, require that a member

of the FRS must provide certification of health insurance

coverage to the Respondent on a timely basis, within six (6)

months, in order to receive the HIS benefits retroactive to the

effective retirement date.

25. In this case, Petitioner claims that she was given the

HIS application form by the employees of the Sheriff's office

within a short time after the body of Cpl. Brown was discovered.

26. Based on the preponderance of evidence, it is concluded

that the HIS application form issued by the Respondent was not

given to the Petitioner at the time she believes it to have been

given (within a week or so of the discovery of Cpl. Brown's

body). The form was not in the possession of the Sheriff's

office and could not have been given to her. The evidence is

persuasive that the form was sent to the Petitioner by the

Respondent as part of its normal and usual course of business.

The Petitioner, for reasons not clear in the record, either

ignored the form or overlooked it. Therefore, for whatever

reason, the form was not completed until April 1997.

27. The Sheriff's Office also has a similar HIS benefit

program for former employees for which the minor son, Brandon,

was not eligible. From the testimony, it is evident that

Petitioner has confused the HIS program of the FRS with the

similar program of the Department.

28. Petitioner further argues that the payment of the HIS

subsidy was a vested right and that the Respondent was required

by law to pay the benefit amount back to the effective date of

retirement regardless of the date on which she made application.

While benefits under the FRS are "declared to be of a contractual

nature," Section 121.011(3)(d), Florida Statutes, the authority

to pay the HIS is not found in Chapter 121, Florida Statutes, but

is found in Chapter 112, Florida Statutes. There is no provision

in that chapter, either express or implied, which would make the

HIS benefit "contractual in nature" or a vested right. Instead,

the law expressly provides in part as follows:

Should funds for the retiree health insurance

subsidy program fail to provide full benefits

for all participants, the benefits may be

reduced or canceled at any time. Section

112.363(5), Florida Statutes.

29. The Respondent had adopted an administrative rule which

does not provide authority to the Respondent to pay retroactive

HIS benefits beyond the six (6) month period. The Respondent,

without express authority by statute or rule, is prohibited from

granting the Petitioner's request. An Administrative Law Judge

is bound to follow the provisions of said rule, unless the rule

is properly challenged under the provisions of Section 120.56,

Florida Statutes (Supp. 1996). No such rule challenge has been

initiated in this case.

30. The Respondent has had a prior case in which the

payment of the HIS benefit was not made to the retiree for almost

three years after retirement because the retiree had not made a

timely application for the benefit. The Respondent held that the

rule provision concerning the need to make an application was

clear and did not permit the Division to waive its application

because the retiree did not submit the HIS application form

timely. Mirabella vs. Division of Retirement , DOR Case No.

96-05, Final Order issued April 17, 1996; Mirabella vs. Division

of Retirement , 689 So. 2d 1075 (Fla. 1st DCA 1997). The rule of

stare decisis applies in this case. Department of Health and

Rehabilitative Services v. Barr , 359 So. 2d 503 (Fla. 1st DCA

1978).

31. Therefore, based on the Petitioner's failure to submit

the HIS certification form to the Respondent in a timely manner

(approximately two and one-half years after retirement benefits

for Brandon had commenced), the request of the Petitioner must be

denied.

RECOMMENDATION

Upon the foregoing findings of fact and conclusions of law,

it is

RECOMMENDED that a Final Order be issued by the Division of

Retirement determining that the Petitioner, Kellie Brown, is not

entitled to the payment of the Health Insurance Subsidy for her

minor son on the retirement account of Corporal Arthur "Donnie"

Brown, deceased, for the period of February 1, 1994, through and

including September 1996.

RECOMMENDED this 17th day of November, 1997, at Tallahassee,

Leon County, Florida.

___________________________________

DANIEL M. KILBRIDE

Administr ative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of November, 1997.

COPIES FURNISHED:

Kellie M. Brown, pro se

12868 Downstream Circle

Orlando, Florida 32828

Stanley M. Danek, Senior Attorney

Department of Management Services

Division of Retirement

2639 North Monroe Street, Building C

Tallahassee, Florida 32399

Thomas J. Pilacek, Esquire

Thomas J. Pilacek & Associates

601 South Lake Destiny Road

Maitland, Florida 32751

Paul A. Rowell, General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

A. J. McMullian, III, Director

Department of Management Services

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

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.