05-001850 Judy Stahl vs. Department Of Management Services, Division Of State Group Insurance Status: Closed Recommended Order on Thursday, January 19, 2006.

Summary: Petitioner was not eligible to participate in the State group health insurance program upon retiring several years after terminating employment by the State.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUDY STAHL, )

)

Petitioner, )

)

vs. ) Case No. 05 - 1850

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF STATE )

GROUP INSURANCE, )

)

Respondent. )

)

R ECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot,

the assigned Administrative Law Judge of the Division of

Administrative Hearings, on September 30, 2005, by video

teleconference with sites in Lauderdale Lakes and in

Tallahassee , Florida.

APPEARANCES

For Petitioner: Mark J. Berkowitz, Esquire

Mark J. Berkowitz, P.A.

524 South Andrews Avenue, Suite 200N

Fort Lauderdale, Florida 33301

For Respondent: S onja P. Matthews, Esquire

Department of Management Services

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

The issue presented is whether Petitioner is eligible to

participate in the State of Florida's group health insurance

plan.

PRELIMINARY STATEMENT

Petitioner, Judy Stahl, a former employee of the State of

Florida, requested participation in the State of Florida's group

health insurance plan upon her retirement several years after her

resignation . Respondent, Department of Management Services,

Division of State Group Insurance, denied her request for the

reason that she was not a member of the State's group insurance

program, or continuously insu red under that program, upon her

retiring. Petitioner timely requested an administrative hearing

regarding that determination, and this cause was transferred to

the Division of Administrative Hearings to conduct the

evidentiary proceeding.

Petitioner tes tified on her own behalf . Respondent

presented the testimony of Verla Lawson, Juanita Tatum, and

Janice Lowe. Additionally, Petitioner's Exhibits numbered 1 - 6

and Respondent's Exhibits numbered 1, 2, 4, 5, 9, 14, 16, 19, 22,

24, and 31 - 33 were admitted i n evidence. At Respondent's

request , official recognition was granted as to Section

110.123(2)(g), Florida Statutes (2002) and (2004) ; Florida

Administrative Code Rules 22K - 1.211 , 60P - 1.003(4) and (5) , and

60P - 2.015(1), (2), and (6); 42 U.S.C.A. §§ 300bb - 1 through 3 and

6, and 26 CFR §§ 54.4980B - 1 through 7.

Both parties submitted proposed recommended orders after the

conclusion of the final hearing. Those documents have been

considered in the entry of this Recommended Order.

FINDINGS OF FACT

1. P etitioner Judy Stahl began her employment with the

State of Florida as a public assistance specialist with the

Department of Children and Families on October 4, 1991. She

began participating in the State's group health insurance

program on December 1, 199 1.

2. Petitioner voluntarily terminated her employment by the

State on November 28, 2002, for personal reasons. In her letter

of resignation she stated that it was her intention to again

seek employment with the State after the personal situation

whic h caused her to resign was concluded.

3. Premiums for the State's group health insurance are

paid one month in advance. Therefore, Petitioner's coverage

under the State's group health insurance program continued

through the end of December 2002.

4 . In January 2003, the State's Division of State Group

Insurance notified Petitioner of her right to elect continuation

coverage under the federal Consolidated Omnibus Budget

Reconciliation Act (COBRA) and the federal Public Health

Services Act (PHSA). Pe titioner so elected and continued her

participation in the State's group health insurance under COBRA

for the maximum period of 18 months that was available to her.

Her continuation coverage expired June 30, 2004.

5. In May 2004 the State's Division of State Group

Insurance notified Petitioner that her continuation coverage

would soon expire and further advised her of her right to

convert her insurance coverage to a private, individual policy.

Petitioner exercised her option to convert to a private poli cy,

effective July 1, 2004.

6. In March 2005 the Florida Division of Retirement sent

Petitioner an Estimate of Retirement Benefits. The Estimate

contained the comment that: "As a result of a review of

accounts for terminated members, it was determined that you are

eligible for retirement benefits." The Estimate form was

accompanied by a pamphlet explaining the Florida R etirement

System Pension Plan. It was also accompanied by information on

the State Employees' Preferred Provider Organization (PPO)

he alth plan. The retirement pamphlet included the information

that health insurance was available to retirees; however, the

health insurance information advised that health insurance was

only available to certain retirees.

7. Petitioner concluded that if she retired, she could

obtain cheaper health insurance from the State than from her

private provider. This was the first time that Petitioner

considered the possibility of retirement.

8. Petitioner thereafter made many telephone calls to the

Departmen t of Children and Families, to the Division of

Retirement, to the Division of State Group Insurance, and to

Peo ple First, inquiring about retirement and insurance. These

telephone inquiries were the first time she mentioned to any

State employee or repres entative that she was interested in

retiring.

9. At the end of March 2005 she made the decision to

retire and submitted her application for retirement benefits.

Her effective retirement date was April 1, 2005.

10. At the time Petitioner filed her application for

retirement, she was no longer participating in the State's group

health insurance program. At the time she file d her application

for retirement, she was no longer participating in continuation

coverage pursuant to COBRA. She was insured u nder a private

policy.

11. At the time of her initial enrollment in the State

group health insurance program, Petitioner signed a new enrollee

form that, inter alia , advised her that eligibility and

enrollment were governed by the provisions of Florida

A dministrative Code Rule 22K - l. During her employment she also

enrolled in supplemental dental insurance. That enrollment

application form notified Petitioner that any changes in

enrollment or coverage are governed by the federal Internal

Revenue Code and the Florida Administrative Code. Throughout

her employment and at the time that she terminated her

employment, she completed Annual Benefits Open Enrollment forms,

which also notified her that any changes in enrollment or

coverage are governed by the Int ernal Revenue Code and the

Florida Administrative Code.

12. While employed by the Department of Children and

Families, Petitioner was provided with copies of the State of

Flor ida Employees Group Health Self Insurance Plan Booklet and

Benefit Document. Those booklets describe eligibility for

participation to include employees, certain retirees, and COBRA

participants. They also describe termination of coverage d ue to

termination of employment and describe c ontinuation coverage and

convers ion coverage.

13. At the time Petitioner retired, she was not a State

employee; she was a former State employee.

CONCLUSIONS OF LAW

14. The Division of Administrative Hearings has

jurisdiction over the subject matter hereof and the parties

hereto. §§ 120.5 69 and 120.57(1), Fla. Stat.

15. The State group health insurance program is authorized

by Section 110.123, Florida Statutes. In addition to defining

an employee as someone who is paid a salary, that Section

included the following language, both when Pet itioner terminated

her employment (2002) and when Petitioner retired (2004) , in

defining retired state employees:

(2)(g) 'Retired state officer or employee'

or 'retiree' means any state or state

university officer or employee who retires

under a state re tirement system or a state

optional annuity or retirement program or is

placed on disability retirement, and who was

insured under the state group insurance

program at the time of retirement, and who

begins receiving retirement benefits

immediately after r etirement from state or

state univer sity office or employment.

16. At the time of Petitioner's initial enrollment in the

State health insurance program, the applicable agency rules were

contained in Flor ida Administrative Code c hapter 22K - 1. In

relevan t part, Rule 22K - 1.211 provided:

(3) An employee who retires and does not

elect to continue coverage as provided in

this section will have coverage terminated

and shall not be eligible to reenter the

Health Plan at a later date except as

provided under su bparagraph (2)(b)l. [The

exception refers to employees who retire

while a disability application is pending.]

Thus, even an employee who retired and was not continuously

insured within the State health care program was prohibited from

later participating in the State's group health insurance .

17. By the time Petitioner terminated her employment,

chapter 22K had been replaced by chapter 60P. Florida

Administrative Code Rule 60P - 1.003 includes the following

definitions:

(4) 'Continuation coverage' mean s coverage

that is identical to the coverage provided

under the Health Program to active employees

which must be offered to qualifying

employees and dependents in accordance with

the Consolidated Omnibus Budge t

Reconciliation Act (COBRA).

(5) 'Conversion plan' means a standard

policy as is issued by the servicing agent

to direct payment subscribers at applicable

rates then in effect. An insured shall have

the right to apply directly to the servicing

agent in writing within thirty - one (31) days

of the ter mination date of coverage under

the Program.

18. Florida Administrative Code Rule 60P - 2.015 contains

specific provisions applicable to an employee who has terminated

State employment, as follows:

(1) Coverage under the Health Program shall

continue thr ough the last day of the month

for which a premium has been paid.

(2) An employee terminated from state

employment for any reason or placed in other

than a salaried position shall not be

eligible to continue in the Health Program.

Upon termination of co verage, the employee

may, if eligible, purchase continuation

coverage available through the Department

[of Management Services] or purchase a

conversion plan offered by the servicing

agent.

* * *

(6) A terminated employee, eligible

dependent or survivin g spouse wishing to

purchase continuation coverage must apply to

the Department within sixty (60) calendar

days after notification of eligibility for

such coverage. A terminated employee,

eligible dependent or surviving spouse

desiring to purchase a conve rsion plan

offered by the servicing agent, must apply

directly to the servicing agent, in writing,

within thirty - one (31) calendar days after

continuation coverage terminates. The

servicing agent shall then issue such

standard contract or policy as is iss ued to

direct payment subscribers and at its

stipulated rates then in effect.

19. COBRA is activated by a qualifying event. 42 U.S.C.A.

300bb - 1(a). In this case, the qualifying event was Petitioner's

voluntary termination of her employment. 42 U.S.C. A. 300bb -

3(2). The Division of State Group Insurance provided Petitioner

notice as required by COBRA. 42 U.S.C.A. 300bb - 6. Neither the

COBRA statute nor its applicable rules and regulations require

the State to counsel Petitioner regarding her options, including

retirement, upon her voluntary termination of employment. The

only notice required under the federal statutes and rules

relates to insurance, not retirement.

20. Similarly, and consistent with, Florida Administrative

Code Rule 60P - 2.015(2) , w h en Petitioner's employment terminated,

the Division of State Group Insurance notified her of her

eligibility to obtain continuation coverage under COBRA, and

when that continuation coverage ended, the Division notified

Petitioner of her eligibility to obta in a conversion policy.

All notices required by Florida statutes and rules to be given

to Petitioner were given to her. Further, Petitioner was on

notice as to the content of applicable rules both by virtue of

having been advised of them in writing throu ghout her employment

and by virtue of implied or constructive knowledge. See Hall v.

State , 823 So. 2d 757 (Fla. 2002); Town of Lauderdale - by - the - Sea

v. Meretsky , 773 So. 2d 1245 ( Fla. 4th DCA 2000) .

21 . For purposes of the State group insurance progra m, at

the time of her retirement in March 2005, Petitioner was not a

"retired employee " becau se she was not participating in the

state group insurance program. Further, Petitioner was not

eligible to rejoin the State group health plan at the time of

her r etirement in that she was not then a "retired employee" as

defined in Section 110.123(2)(g), Florida Statutes.

22 . Although Petitioner testified that someone at People

First told her in March 2005 that she would be eligible for

h ealth care benefits if she retired , she did not testify as to

what all the other people she talked to told her or as to what

her question was that produced that answer. More importantly,

this conversation, whatever it involved, took place in

March 2005 at a time when she could not re - enter the State's

group health insurance program whether she retired or not.

23. Petitioner argues, however, that her conversation with

someone at People First gives rise to estoppel. In Florida,

estoppel con sists of the following elements: (1 ) a

representation by the party estopped to the party claiming the

estopp el as to some material fact, which representation is

contrary to the condition of affairs later as serted by the

estopped party, (2 ) a reliance upon the representation by the

par ty cla iming the estoppel, and (3 ) a change in the position of

the party claiming the estoppel to his detriment, caused by the

representation and his reliance thereon. See Rayborn v.

Department of Management Services , 803 So. 2d 747 (Fla. 3d DCA

2001). As a gen er al rule, estoppel will not appl y to a mistaken

statement of the law. Dept. of Revenue v. Anderson , 4 03 So. 2d

397 (Fla. 1981) .

24. Petitioner has not presented legally - sufficient

evidence to demonstrate any of the elements nece ssary to show

that esto ppel should be applied against the Division of State

Group Insurance. First, the question of eligibility is a matter

of law as established by applicable statutes and rules and not a

matter of fact . Therefore, any alleged statement of eligibility

made to Petitioner in March 2005 cannot be used as a basis for

estoppel. Second, Petitioner has not proven that she relied to

her detriment on any statement allegedly made to her in

March 2005. Third, Petitioner has not shown that she changed

her position to her detriment based upon the alleged statement

in March 2005. Petitioner has only proven that she retired

based upon the information she was given in March 2005, but has

not proven that retiring was a detriment. As to participation

in the State's group heal th insurance plan, she was not a

participant before or after March 2005 and her April 1, 2005,

retirement date did not impact her participation .

25. Petitioner has cited no authority for the proposition

that the State has an obligation to advise each empl oyee or

former employee of the most advantageous time to retire based

upon that person's unique circumstances. The State's failure to

fulfill that non - existent obligation is the real thrust of

Petitioner's position in this case.

26. Finally, Petitioner a rgues that the State should have

advised her that her election of private insurance coverage

after the cessation of COBRA continuation coverage rendered her

ineligible to participate in the State group insurance plan upon

her retire ment. However, it was P etitioner's own act of

terminating her employment , not her obtaining the private

conversion policy, which rendered her ineligible to participate

in the State group health insurance plan. COBRA afforded her

continuation coverage for the maximum time allowe d, and

Petitioner's ability to continue that coverage concluded at the

end of the COBRA period.

27. Petitioner is not eligible to re - join the State's

group health insurance plan pursuant to her own decisions and

consistent with the clear language containe d in the federal and

state statutes and rules.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered finding that

Petitioner is not eligible to participate in the State's group

healt h insurance program.

DONE AND ENTERED this 19th day of January, 2006, in

Tallahassee, Leon County, Florida.

S

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalach ee 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 19th day of January, 2006.

COPIES FURNISHED:

Mark J. Berkow itz, Esquire

Mark J. Berkowitz, P.A.

524 South Andrews Avenue, Suite 200N

Fort Lauderdale, Florida 33301

Sonja P. Matthews, Esquire

Department of Management Services

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

Tom Lewis, Jr., Secreta ry

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All p arties 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.