11-002997 Donna M. Goerner vs. Department Of Management Services Status: Closed Recommended Order on Thursday, October 20, 2011.

Summary: Petitioner failed to satisfy her burden of proving entitlement to reimbursement of COBRA premium payment.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DONNA M. GOERNER , )

)

Petitioner , )

)

vs. ) Case No. 11 - 2997

)

DEPARTMENT OF MANAGEMENT )

SERVICES , )

)

Respondent . )

)

RECOMMENDED ORDER

Purs uant to notice, on August 30, 2011, a formal hearing in

this cause was held by video teleconference in Orlando and

Tallahassee, Florida, before the Division of Administrative

Hearings by its designated Administrative Law Judge Linzie F.

Bogan.

APPEARANCES

For Petitioner: Dean A ndrew Reed, Esquire

Law Offices of Dean A. Reed, P.A.

2180 West State Road 434 , Suite 2150

Longwood, Florida 32779

For Respondent: Sonja P. Mathews, Esquire

Offices of the General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to a refund of $1,256.09 for

a COBRA premium payment made for the month of January 2011.

PRELIMINAR Y STATEMENT

Petitioner, Donna Goerner, last worked as an employee for

the State of Florida on May 31, 2010. During her term of

employment , Petitioner received health insurance coverage

through the State Insurance Health Program (Health Program).

United Healthcare of Florida, Inc. (United), during all times

material hereto, served as Petitioner's Health Maintenance

Organization ( HMO ) provider.

Under the Health Program, premiums are paid 30 days in

advance of the month for which the payment covers. Upo n

termination of her employment with the State of Florida,

Petitioner, as authorized by the Consolidated Omnibus Budget

Reconciliation Act (COBRA), elected to continue her health

insurance coverage. In accordance with her election,

Petitioner, on July 1, 2010, commenced personally paying the

monthly premiums associated with the continuation of her

insurance coverage.

COBRA premium payments are due by the tenth day of the

month prior to the month of coverage. Late premium payments

are, however, accepted through the end of the coverage month.

Petitioner submitted a late premium payment for the month of

January 2011. The late payment was accepted by the Department

of Management Services (Department) , and Petitioner's health

coverage was in effect for the entire month of January 2011.

However, in February 2011, Petitioner received erroneous

correspondence from United informing her that her COBRA coverage

ceased on December 31, 2010. In response to this

correspondence, Petitioner requested reimbursement o f her

January 2011 COBRA premium payment. On February 28, 2011, the

D epartment denied Petitioner's request. In response to the

denial, Petitioner, on March 14, 2011, filed a request for a

formal hearing as authorized by c hapter 120, Florida Statu t es

(201 0) . 1/ O n or about June 15, 2011, the Division referred the

matter to the Division of Administrative Hearings for a disputed

fact hearing.

A Notice of Hearing by Video Teleconference was issued

setting the case for formal hearing on August 30, 2011. At t he

hearing held on August 30, 2011, Petitioner testified on her own

behalf and offered the testimony of Mary Hutchinson, and Sandie

Wade. The Department offered testimony from Sandie Wade,

Michael Talbot, James T. West, and Mary N. Hutchinson.

Petitioner 's E xhibits 1, 2, 3, 8, and 12 were offered and

received into evidence without objection. Respondent's

Exhibits 1, 4, 10, and 11 were offered and received into

evidence without objection. Petitioner objected, on grounds of

relevance, to Respondent's E xhi bits 13 and 14. Both exhibits

were received into evidence over objection.

On September 22, 2011, the parties filed a j oint m otion

wherein it was requested that the date for filing proposed

recommended orders be extended to October 10, 2011. The motion

was granted. The transcript of the proceeding was filed with

the Division of Administrative Hearings on October 3, 2011. On

October 6, 2011, Petitioner submitted a Proposed Recommended

Order ; o n October 10, 2011, Respondent submitted a Proposed

Recommen ded Order. The Proposed Recommended Orders submitted by

the parties have been considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. The parties stipulate to the following facts set forth

in this paragraph:

A) Petitioner was em ployed by the State of

Florida from June 19, 1995, through April 30, 2007,

and again from November 7, 2007, through May 31, 2010;

B) While a State of Florida employee, Petitioner

participated in the Health Program. Employee Health

Program premiums are p aid a month in advance, so upon

Petitioner's termination of employment on May 31,

2010, her Health Program coverage continued through

June 30, 2010;

C) Petitioner began "continuation coverage" on

July 1, 2010;

D) Continuation coverage is health insuran ce

coverage that is identical to the coverage provided

under the Health Program to active employees and must

be offered to qualifying employees and dependents in

accordance with the COBRA. COBRA is applicable to

public employment through amendments to the Public

Health Services Act. 42 U.S.C. § 300bb - 1 (201 0 );

E) Petitioner's COBRA premium payment for the

month of January 2011 was received by the

Department/Northgate Arinso on January 6, 2011;

F) After February 2, 2011, Petitioner received a

letter fr om United dated February 2, 2011; and

G) Prior to receipt of the letter dated

February 2, 2011, Petitioner had not requested

cancellation of her COBRA coverage.

2. The Department serves as statutory a dministrator for

the Health Program. § 110.123(5).

3. The company of Northgate Arinso, through contract with

the Department, serves as the professional administrator of the

Health Program. In the capacity of professional administrator,

Northgate Arinso is responsible for overseeing most of the

day - to - da y operations associated with the Health Program.

Northgate Arinso is one of the many companies that make up what

is commonly referred to as People First.

4. Pursuant to its contract with the Department, Northgate

Arinso is responsible for, among other t hings, receiving and

processing payments from insured individuals and making initial

determinations regarding whether individuals are eligible for

COBRA continuation coverage. The Department, however, makes all

final decisions "concerning enrollment, the existence of

coverage, or covered benefits" and is prohibited, by statute,

from delegating such final authority to others. § 110.123(5).

5. United has a contract with the Department to provide

health insurance coverage for eligible State of Florida

empl oyees and individuals , like Petitioner , who are covered

through COBRA. United is Petitioner's HMO.

6. The contract between United and the Department

provides, in relevant part, that "[b]y the tenth (10th) day of

each calendar month of service, People First will forward

monthly enrollment change data in an electronic media format.

The data layout of the monthly HMO eligibility file structure

will be provided by People First." United does not make final

Health Program coverage eligibility determination s for

employees, their dependents, or COBRA - covered individuals.

7. Petitioner's COBRA premium payment for the month of

January 2011 was due by December 10, 2010. Petitioner mailed

her premium payment in the amount of $1,256.09 to People First

on Januar y 3, 2011. Included with Petitioner's payment was a

note written by Petitioner stating "[p]lease reinstate policy

coverage for January."

8. Premium payments for direct bill participants, like

Petitioner, are mailed to a lock - box, the contents of which are

forwarded nightly to Northgate Arinso for processing. Upon

receipt of a premium payment, Northgate Arinso verifies the

amount of the payment and confirms that the participant

continues to otherwise meet COBRA eligibility requirements.

On the fifth day of each month, the People First system

automatically checks to see if premium payments have been

received and processed during the previous month. Petitioner's

premium payment due for the month of January 2011 was not

received by People First until Ja nuary 6, 2011, so this payment

would not have been captured by the system during the January 5,

2011, processing cycle.

9. On the 27th or 28th day of each month, Northgate Arinso

forwards to vendors, such as United, premium payments received

from program participants. Because Petitioner 's January premium

was not received until January 6, 2011, no premium payments for

January 2011 coverage would have been reflected on the

December 27 or 28, 2010, transmittal , as appropriate, from

Northgate Arinso to Unite d. However, Petitioner's January 2011

premium payment should have been reflected on the January 27

or 28, 2011, transmittal from Northgate Arinso to United , but,

for reasons unexplained, it was not. Northgate Arinso's failure

to reflect Petitioner's Janu ary 6, 2011, premium payment on the

January 27 or 28, 2011, transmittal to United resulted in United

sending to Petitioner a certificate of creditable coverage.

10. On February 2, 2011, United, after having received

from Northgate Arinso information which indicated that

Petitioner had not paid her January 2011 premium (when in fact

she had), sent Petitioner a certificate of creditable coverage,

which reads as follows:

IMPORTANT TERMINATION OF COVERAGE NOTICE

FOR: DONNA GOERNER, WILLIAM GOERNER

PLEASE REA D THIS CERTIFICATE OF CREDITABLE

COVERAGE LETTER CAREFULLY AND SAVE IT FOR

YOUR RECORDS. YOU WILL NEED THIS

INFORMATION TO ENROLL IN ANOTHER BENEFIT

PLAN.

WE ARE WRITING TO LET YOU KNOW THAT YOUR

HEALTH CARE COVERAGE WITH UNITEDHEALTHCARE

HAS ENDED. THI S LETTER IS YOUR "CERTIFICATE

OF CREDITABLE COVERAGE" THAT VERIFIES YOUR

PRIOR COVERAGE WITH ONE OR MORE OF

UNITEDHEALTHCARE AFFILIATED COMPANIES

PROVIDING INSURANCE, HMO OR CLAIMS

ADMINISTRATION SERVICES (COLLECTIVELY

REFERRED TO AS UNITEDHEALTHCARE).

WH EN ENROLLING IN ANOTHER PLAN, YOU WILL

NEED THIS CERTIFICATE TO SHOW YOU HAVE HAD

CONTINUOUS COVERAGE. IF NEEDED, PROVIDE

THIS LETTER AND/OR ANY OTHER

UNITEDHEALTHCARE COVERAGE DOCUMENTS TO YOUR

NEW PLAN ADMINISTRATOR OR EMPLOYER. PLEASE

BE AWARE THAT CE RTAIN INFORMATION MAY NOT BE

CURRENTLY AVAILABLE FROM UNITEDHEALTHCARE.

IF YOUR NEW HEALTH BENEFIT PLAN REQUIRES

INFORMATION THAT IS NOT CONTAINED IN THIS

CERTIFICATE, YOU MAY PROVIDE THE INFORMATION

IN WRITING TO YOUR NEW PLAN, ALONG WITH

SUPPORTING COVE RAGE DOCUMENTS OR BY OTHER

MEANS.

THE INFORMATION BELOW DESCRIBES THE COVERAGE

AMOUNT AND THE DATE IT ENDED. AS REQUIRED

BY THE HEALTH INSURANCE PORTABILITY AND

ACCOUNTABILITY ACT, BETTER KNOWN AS HIPAA,

WE ACKNOWLEDGE THAT THE FOLLOWING

INDIVIDUAL(S) PA RTICIPATED IN A

UNITEDHEALTHCARE HEALTH BENEFIT PLAN:

DONNA GOERNER -- COVERAGE PERIOD END DATE --

12/31/10

WILLIAM GOERNER -- COVERAGE PERIOD END DATE - Î

12/31/10

IF YOU HAVE QUESTIONS ABOUT THIS LETTER, OR

BELIEVE ANY INFORMATION CONTAINED IN THIS

LETTER IS NO T ACCURATE, YOU MAY CONTACT THE

BENEFIT REPRESENTATIVE OF YOUR PREVIOUS

EMPLOYER, CALL CUSTOMER CARE AT 1 - 866 - 527 -

9597 OR AT THE NUMBER LISTED ON YOU R MEMBER

ID CARD. THANK YOU.

SINCERELY,

UNITEDHEALTHCARE

11. Upon receipt of the certificate of credit able

coverage, Petitioner reasonably believed that her COBRA coverage

had been cancelled effective December 31, 2010.

12. The certificate of credible coverage is not a letter

which determines participant eligibility , but instead provides

the recipient the reof with information verifying dates of COBRA

coverage.

13. On February 7, 2011, Petitioner, upon receipt of the

certificate of creditable coverage letter, contacted Northgate

Arinso and requested reimbursement of her January 2011 premium

payment. Petit ioner's request was denied.

14. For the month of January 2011 there were no claims

submitted to the Department or Northgate Arinso by healthcare

providers seeking payment for services provided to Petitioner or

any of her beneficiaries.

15. By signa ture affixed on July 1, 2010, Petitioner

acknowledged receiving a benefits packet which contained

"IMPORTANT INFORMATION ABOUT [HER] COBRA CONTINUATION COVERAGE

RIGHTS." Among other things, the benefits packet noted the

following:

HOW LONG WILL CONTINUAT ION COVERAGE LAST?

In the case of a loss of coverage due to end

of employment, coverage may be continued for

up to 18 months. . . . Continuation

coverage will be terminated before the end

of the maximum period if any required

premium is not paid on time, if a qualified

beneficiary becomes covered under another

group health plan that does not impose any

pre - existing condition exclusion for a

pre - existing condition of the qualified

beneficiary, if a covered employee enrolls

in Medicare, or if the employer c eases to

provide any group health plan for its

employees. Continuation coverage may also

be terminated for any reason the Plan would

terminate coverage of participant or

beneficiary not receiving continuation

coverage (such as fraud).

* * *

WHEN AND HOW MUST PAYMENT FOR CONTINUATION

COVERAGE BE MADE

Periodic payments for continuation coverage :

After you make your first payment for

continuation coverage, you will be required

to pay for continuation coverage for each

subsequent month of coverage. Under the

Plan, these periodic payments for

continuation coverage are due on the 10th

day of the month prior to the coverage

month.

Grace periods for periodic payments :

Although periodic payments are due on the

10th day of the month prior to the coverage

month, you will be given a grace period of

through the end of the coverage month to

make each periodic payment. Your

continuation coverage will be provided for

each coverage period as long as payment for

that coverage period is made before the end

of the grace period for that payment.

However, if you pay a periodic payment later

than its due date but during its grace

period, your coverage under the Plan may be

suspended and then retroactively reinstated

when the periodic payment is made. This

means that any claim you submit for benefits

while your coverage is suspended may be

denied and may have to be resubmitted once

your coverage is reinstated.

If you fail to make a periodic payment

before the end of the grace period for that

payment, you will lose al l rights to

continuation coverage under the Plan.

(Emphasis in original).

16. On July 7, 2010, Petitioner, within days of commencing

continuation coverage, received from the People First Service

Center, Benefits Administration, correspondence which, in p art,

provides as follows:

Your monthly insurance premium(s) are due by

the 10th of the month prior to the month of

coverage to avoid interruption of services.

Premiums must be received or postmarked by

the end of the coverage month to prevent

termination.

* * *

State Group Health Insurance Program and

Supplemental Insurance Plans

Receipt of direct payment, endorsement, or

deposit of premium by the Department or its

agent does not provide coverage if after

receipt of the payment, its endorsement, or

deposit, the Department or its agent

determines that the employee, retiree, or

COBRA participant or dependent is not

eligible to participate in the State Group

Health Program or Supplemental Insurance

Plan(s). Upon determination of

ineligibility, includin g failure to make

timely payments, the premium received shall

be fully reimbursed.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding. §§ 120.569 and 120.57(1), Fla. Sta t. (2011).

18. Petitioner bears the burden of establishing by a

preponderance of the evidence her entitlement to reimbursement

of her January 2011 COBRA premium payment. See Dep't of Banking

& Fin., Div. of Sec. & Investor Prot. v. Osborne Stern and Co. ,

670 So. 2d 932, 934 (Fla. 1996); Young v. Dep't of Cmty. Aff. ,

625 So. 2d 831, 834 (Fla. 1993); Espinoza v. Dep't of Bus. &

Prof'l Reg. , 739 So. 2d 1250, 1251 (Fla. 3d DCA 1999); Fla.

Dep't of Transp. v. J.W.C. Co. , 396 So. 2d 778, 788 (Fla. 1st

DCA 1981); and § 1 20.57(1)(j)("Findings of fact shall be based

upon a preponderance of the evidence, except in penal or

licensure disciplinary proceedings or except as otherwise

provided by statute. . . .").

19. A preponderance of the evidence is defined as "the

gr eater weight of the evidence" or evidence that "more likely

than not" tends to prove a certain proposition. Gross v. Lyons ,

763 So. 2d 276, 280 n.1 (Fla. 2000).

20. Florida Administrative Code Rule 60P - 2.004(9) provides

as follows:

R eceipt of direct paym ent, endorsement, or

deposit of premium by the Department or its

agent does not provide coverage if after

receipt of the payment, its endorsement, or

deposit, the Department or its agent

determines that the employee, retiree, or

COBRA participant or depend ent is not

eligible to participate in the State Group

Health Program. Upon determination of

ineligibility, including failure to make

timely payment, the premium received shall

be fully reimbursed.

21. Rule 60P - 2.006(5) provides that "[a] late payment

fro m . . . an insured having continuation coverage will be

accepted as a late payment if it is received by the Department

on or before the last day of the coverage month; however,

payment will not be accepted after such date and coverage will

be terminated." (Emphasis added ). The requirements set forth

in r ule 60P - 2.006(5) are consistent with the law governing COBRA

continuation benefits and the explanation of COBRA benefits that

Petitioner acknowledged receiving on July 1, 2010.

22. Rule 60P - 2.015(1) provid es that "[c]overage under the

Health Program shall continue through the last day of the month

for which a premium has been paid."

23. Although Petitioner paid her January 2011 premium

after the date upon which it was due, she nevertheless made the

premium payment during the applicable grace period. Petitioner

was , therefore , timely in the submission of her January 2011

premium payment. Northgate Arinso, in accordance with r ule

60P - 2.006(5), accepted Petitioner's payment and, per the

requirements of r ule 6 0P - 2.015(1), continued her coverage

through the end of January 2011. Succinctly stated, it is the

"receipt" of payment by Northgate Arinso, as opposed to the

"processing" of the same , that drives the analysis in this case.

See Nationwide Mut. Fire Ins. C o. v. Smith , 28 So. 3d 943 (Fla.

1st DCA 2010) (Insured's premium payment was deemed received by

insurer when funds were electronically transferred to insurer's

bank as opposed to when the funds were placed in the insurer's

account by the bank).

24. As pre viously noted, r ule 60P - 2.004(9) provides, in

part, that upon a determination of ineligibility, any premium

payments received by the Department or its agent for a coverage

period subsequent to the determination shall be fully

reimbursed. Petitioner conten ds in her proposed recommended

order that Northgate Arinso determined that she was ineligible

to participate in the Health Program when the company failed to

timely inform United that she had paid her January 2011 premium.

The undersigned finds this argum ent unpersuasive. The mere fact

that Northgate Arinso erroneously communicated to United that it

had not received Petitioner's January 2011 payment, when in fact

it had, does not change the undisputed fact that Petitioner's

January 2011 payment was actual ly received and accepted by

Northgate Arinso on January 6, 2011.

25. It is clear that Northgate Arinso dropped the

proverbial ball when it omitted Petitioner's payment information

from the list identifying individuals that had paid their

January 2011 Heal th Program premium. However, Northgate

Arinso's failure in this regard does not equate to a

determination that Petitioner was deemed ineligible for

continuation of COBRA benefits and thus entitled to a refund of

her premium. Notions of estoppel notwithst anding, it is well

established "that a party shall not take advantage of an error

for his [or her] benefit. . . ." Hale v. Crowell's Adm'x ,

2 Fla. 534, 538 (Fla. 1849). To find otherwise in the instant

case, would amount to allowing Petitioner to execute the

quintessential "gotcha" by using Northgate Arinso's error to

secure a premium refund for a period of time that had already

elapsed and for which Petitioner had no personal financial

risk. 2/

26. Accordingly, Petitioner has failed to meet her burden

o f proof and is , therefore , not entitled to a refund of her

January 2011 COBRA premium payment.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is,

RECOMMENDED that Respondent , Department of Management

Services, enter a fin al order denying Petitioner , Donna M.

Goerner 's , request for reimbursement of her January 2011 COBRA

premium payment.

DONE AND ENT ERED this 20th day of October , 2011 , in

Tallahassee, Leon County, Florida.

S

LINZIE F. BOGA N

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

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 20th day of October , 2011 .

ENDNOTES

1/ Unless otherwise noted, all references to Florida Statutes

are to the 2010 edition.

2/ As noted in the Findings of Fact, paragraph 14, neither

Petitioner, nor her beneficiaries, for the month of J anuary

2011, received medical services for which payment was sought

from the Department or Northgate Arinso.

COPIES FURNISHED :

Jason Dimitris, General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 09 50

Sonja P. Mathews, Esquire

Office of the General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

Dean Andrew Reed, Esquire

Law Office of Dean A. Reed, P.A.

2180 West State Road 434, Suite 2150

Lo ngwood, Florida 32779

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

wi ll issue the Final Order in this case.