13-002027 Oscar Walker vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Friday, November 22, 2013.

Summary: The Division of Retirement is under no duty to notify retiree by certified mail or telephone of the opportunity to apply for health insurance subsidy. Regular mail to address-of-record is sufficient.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OSCAR WALKER,

Petitioner,

vs. Case No. 13 - 2027

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF

RETIREMENT,

Respondent.

/

RECOMMENDED ORDER

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

on October 22, 2013 , by video teleconference at sites in

Jacksonville and Tallahassee , Florida , before W . David Watkins,

a duly - designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Oscar Walker, pro se

10836 Peaceful Harbor Drive

Jacksonville, Florida 32218

For Respondent: Ronda L. Moore, Esquire

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Flori da 32399 - 0950

STATEMENT S OF THE ISSUE

Whether Petitioner is entitled to receive retroactive

Health Insurance Subsidy (HIS) payments from the Florida

Retirement System (FRS) in addition to those already received.

Secondarily, was FRS required to notif y or remind Petitioner of

the option to apply for the HIS benefit in a manner other than

regular mail to his address of record?

PRELIMINARY STATEMENT

By letter date d January 25 , 2013 , Respondent advised

Petitioner that he was eligible to receive retroactiv e HIS

benefits for a maximum of six month s prior to the date on which

he submitted his application for the HIS benefit, pursuant to

section 112.363(9) , Florida Statutes . The letter also informed

Petitioner of his right to challenge RespondentÓs decision b y

filing a petition for hearing within 21 days of receipt of the

letter .

Thereafter , Petitioner timely requested an administrative

hearing. Respondent forwarded Petitioner's request for h earing ,

along with a document entitled ÐRespondentÓs Initial

Brief/P etition for ReviewÑ 1 / to the Division of Administrative

Hearings (DOAH) on June 3, 2013. In this document, Petitioner

identified several disputed issues, two of which frame

PetitionerÓs central arguments in this matter:

Whether DOR and the Duval County Sc hool

Board exhausted every available option to

inform Respondent of a pending

responsibility to file for HIS benefits and

failure to do so timely may result in

Respondent losing substantial benefits?

Whether there existed a fiduciary

relationship between qualifying vested

retirees and DOR after constructive delivery

of the initial benefit payment to retirees

and whether such delivery demands of DOR to

make best efforts [ 2 / ] to alert Respondent of

the urgency to apply for receivership of HIS

payments?

A fo rmal administrative hearing was initially scheduled for

J uly 22, 2013 , however, Petitioner had a family emergency, and

the matter was re - scheduled for October 22, 2013. The hearing

took place as scheduled on October 22, 2013 .

At hearing, Petitioner testif ied o n his own behalf.

Petitioner's Exhibit 1 was received into evidence . Petitioner

requested and was given leave to late file two exhibits within

seven days of the conclusion of the hearing. Petitioner filed

Exhibits A through E on October 31, 2013 . T hough these exhibits

w e re un timely filed , they have been considered in the

preparation of this Recommended Order . In addition to the late -

filed exhibits themselves, Petitioner included a one - page

summary of the import of each of the exhibits, as well as t he

following ÐAcknowledgementÑ:

Upon careful review of cases and law

memorand a there is an undeniable

preponderance of burden and responsibility

placed on the shoulders of qualifying

recipients to file timely for Health

Insurance Subsidy benefits. Passive

disclosure and hidden agenda spills across a

broad and profitable spectrum of innocence

and ignorance that def in es America's

condition. Greed and hate; the standard of

choice by some , has found its way into the

fabric of government. Notwithstanding, the

Department of Management Services Ó capacity

to impose and officiate conditions against

unknowing participants has and continues to

cause devastating injury and suffering

largely against women.

Respondent presented the testimony of its Benefits

Administra tor for the Retired Payroll Section, Robin Collins .

Respondent's Exhibits 1 through 15 were received into evidence

without objection .

At the conclusion of the hearing, Petitioner requested to

file his proposed recommended order within 12 days from the

fil ing of the official T ranscrip t at DOAH . This request was

granted. The T ranscript was filed on November 5, 2013, and

thereafter Petitioner and Respondent timely filed P roposed

Recommended O rders, both of which have been carefully considered

in the prepara tion of this Reco mmended Order.

R efer en ces to the Florida Statutes will be to the 2013

version unless otherwise noted.

FINDINGS OF FACT

Based on the testimony and documentary evidence presented

at hearing, the demeanor and credibility of the witnesses, and

on the entire record of this proceeding, the following findings

of fact are made:

1 . Respondent is the state agency charged with the

responsibility of administering the FRS , including the H IS

benefit.

2 . The HIS benefit is a program authorized by Florid a law .

The HIS benefit i s calculated at five dollars times the number

of years of creditable state service at the time of retirement.

Only those members of the FRS who receive monthly retirement

benefits are eligible to apply for the HIS.

3 . Petitioner w orked for the Duval County School Board and

earned creditable state s e rvice in the FRS . In July 2004,

Petitioner began his participation in the FRS Deferred

Retirement Option Program (DROP) . Petitioner's anticipated DROP

termination dat e was June 30, 200 9 .

4 . In September 2004, Respondent mailed Petitioner an

acknowledgement of receipt of his DROP application to his

address of record on file with Respondent. Along with the

acknowledgement of DROP application, Respondent provided

Petitioner an estimate o f his pension benefit and enclosed the

"Pr e paring to Retire" brochure referenced in the estimate. The

" Preparing to Retire" brochure discusse d the HIS benefit and

stated , in pertinent part, that:

Around the time you receive your first

monthly benefit paym ent after termination,

an application for HIS, Form HIS - 1, will be

mailed to you . You must return a completed

HIS application to the Division of

Ret i rement within 6 months after your

retirement benefit starts in order to be

paid retroactive to your retire ment date.

If you fail to return the form within the 6 -

month period, retroactive subsidy payments

will be limited to a maximum of 6 months .

You are responsible for obtaining

certification of your health insurance

coverage and applying for the HIS.

(E mphasis provided in the original.)

5 . In March 2009, Respondent mailed Petitioner forms,

brochures and informational material relevant to his upcoming

DROP termination to the address of record on file with

Respondent. The cover letter advised Petitioner that:

After your name is added to the retire d

payroll, you will receive a retiree packet

that contains an information letter, After

You Retire booklet, Tax Withholding

Certificate for Pension Payments (Form

W - 4P), Health Insurance Subsidy application

(For m HIS - 1) and Direct Deposit

Authorization form. The retiree packet is

mailed approximately one week before you

receive your first monthly benefit.

(Emphasis provided in the original.)

6 . On or about June 9, 2009, Petitioner completed his DROP

termination form and the form was received by Respondent. In

July 2009, Respondent added Petitioner to the retired payroll

for him to begin receiving his monthly pension benefit.

7 . In July 2009, Respondent also mailed Petitioner's

retiree packet to his address of record on file with Respondent.

The retiree packet contained a cover letter, an information

brochure titled "After You Retire," a direct deposit

authorization form, a tax withholding form, and a n HIS

application. The cover letter of the retiree packet in cluded

the following:

YOUR RETIREMENT PACKET INCLUDES:

- "After You Retire" Brochure - PLEASE READ

FOR ADDITIONAL INFORMATION

* * *

- Health Insurance Subsidy Certification

(Form HIS - 1) and Instructions Page

* * *

HEALTH INSURANCE SUBSIDY (HIS): The H IS is

extra money that is added to the monthly

retirement benefit of eligible payees to

help with the cost of health insurance . The

member , or other payee who is the spouse or

other financial dependent, may be eligible

if he/she has health insurance, Medi care, or

Tricare. If you are eligible to apply for

the HIS, Form HIS - 1 has b een enclosed. It

is your responsibility to obtain

certification of your health insurance

coverage and submit the enclosed Form HIS - 1

to the Division . Please note that if Form

HI S - 1 is NOT received by the Division within

six months of your first benefit payment,

retroactive HIS benefits will be limited to

a maximum of six months as long as your

health insurance certification covers all

six months .

(Emphasis provided in the o riginal.)

8 . The "After You Retire" brochure, included in the

retiree packet, dedicates several pages to explaining the HIS

benefit. It reiterates that it is the retiree's responsibility

to obtain health insurance coverage , and to apply for the

benefit by completing the HIS application included in the

retiree packet.

9 . It is the Respondent's practice to comply with the

requirements of Florida Administrative Code R ule 608 - 4.020, by

mailing the retiree packet, which includes the HIS application,

to reti rees when they are placed on the retired payroll .

10 . In a separate mailing in July 2009, Respondent sent

Petitioner ' s first monthly pension benefit check to his address

of record . Petitioner has continued to receive hi s monthly

pension benefit check fro m Respondent by mail uninterrupted to

the date of the hearing.

11 . W ithin the first five months of a retiree Ós being

placed on the retired payroll , Respondent runs a n HIS reminder

listing to notify it of retirees who have not submitted their

HIS applicati on s . Respondent's practice is to send a n HIS

reminder letter to retirees on the HIS reminder listing to

notify them that their HIS application s ha ve not been received,

encouraging them to file for the HIS benefit, and enclosing a n

HIS application.

12 . Pe titioner was listed on Respondent's December 2009 ,

HIS reminder listing. In January 2010, Respondent mailed

Petitioner a n HIS reminder letter to his address of record. The

HIS reminder letter included yet another HIS application.

13 . Each January and Ju ly, Respondent mails a newsletter

to retirees (FRS Retiree Newsletter) . The HIS benefit is

specifically referenced in articles in the July 2009 , January

2010, July 2010, July 2011 , and January 2012 , FRS Retiree

Newsletters. The articles range in substanc e and include

information regarding a retiree ' s responsibility to apply for

the HIS benefit ; an explanation that the HIS benefit is not

guaranteed ; n otification that the Florida Legislature can reduce

or eliminate it ; information about the tax consequences of the

HIS benefit ; notice that retirees can see whether they are

receiving the HIS benefit by reviewing their annual statement ;

and that if they have questions they can consult their "After

Your Retire" bro c hure , go online , or call the Retired Payroll

Se ction.

14 . In January of each year, Respondent mails retirees who

have received retirement benefits during the prior year

information to assist them in prepar ing their tax returns .

Included in the January mailing is the IRS Form 1099 - R, an

annual stateme nt detailing the income payment types recei v ed

(Re t iree Annual Statement) , and the January FRS Retiree

Newsletter. The Retiree Annual Statement identifies two

different types of income payments made to retirees: (1) th e

monthly reti r ement benefit , and (2) the monthly HIS benefit.

The amount of HIS benefit reflected on Petitioner's 2009, 2010

and 2011 Retiree Annual Statement is $0.00.

15 . Petitioner disputes whether he received Respondent's

various mailings regarding the HIS benefit. However, Petitioner

does not dispute that he has received his monthly pension

benefit check by ma il from Respondent each month from July 2009 ,

to present. Petitioner receives "a lot of junk mail ," but he

keeps a close eye out for his monthly pension benefit check.

16 . Resp ondent's records reflect, and Petitioner does not

dispute , that his address at the time he retired was 1923 Durkee

Drive West. Respondent's records reflect that Petitioner's

address changed to 10836 Peaceful Harbor Drive , effective May 3,

2010. These two addresses are the only addresses where

Petitioner has lived since he retired. It is incumbent upon a

retiree to keep Respondent notified of a ny change of address .

17 . Respondent's records reflect that its mailings to

Petitioner, including his monthly pe nsion benefit check, have

not been returned as undeliverable to Respondent.

18 . At some point i n 2012, Petitioner called Respondent to

inquire about changing his tax deduction status. During the

course of that conversation , Respondent reminded Petitioner that

he had not applied for and was not receiving the HIS benefit.

Petitioner then submitted his HIS application to Respondent in

December 2012. Petitioner began receiving his HIS benefit

effective December 2012 . Based on the date of receipt of

Petitio ner's HI S application , Petitioner was eligible for six

months of retroactive HIS benefit, effective June 2012.

19 . Petitioner a rgu es that Respondent should have

communicated the requirement for him to apply for the HIS

benefit by certified mail, by an act ive telephone call, or by

notification in the envelope he receives his monthly pension

benefit check. Petitioner asserts no statutory, regulatory, or

other authority for this proposition.

20 . Petitioner also alleges that Respondent ultimately

sent the HI S application to him by certified mail, and that it

was the only certified mail he has received from Respondent.

H owever , the record reflects that the certified mail Petitioner

is referring to is Respondent ' s January 25, 2013 , final agency

action letter s ent to Petitioner.

21 . Petitioner further asserts that the HIS benefit is an

earned right , an entitlement , not subject to arbitrary

forfeiture, and is unclaimed property under c hapter 717, Florida

Statutes . Again, Petitioner provides no authority for thi s

argument.

CONCLUSIONS OF LAW

22 . The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties hereto pursuant to s ections 120.569 and 120.57(1),

Florida Statutes.

23 . As the person seeking to establish his entitlement to

benefits, Petitioner has the burden of proof by a preponderance

of the evidence. See § 120.57(1)(j), Fla . Stat . ; Dep Ó t of

Transp . v. J.W.C. Co . , 396 So. 2d 778 (Fla. 1st DCA 1981) (The

party asserting the affirmative of an iss ue has the burden of

proof.) .

24 . 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 certain proposition. See Gross v.

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

Tobacco Co. v. State , 697 So. 2d 1249, 1254 (Fla. 4th DCA 1997) ,

quoting Bourjaily v. United States , 483 U.S. 171, 175 (1987)).

25 . In pertinent part, s ection 112.363, Florida Statutes,

provides for the payment of a Health Insurance Subsidy

as follows:

(1) PURPOSE OF SECTION. Ï The purpose of

this section is to provide a monthly subsidy

payment to retired members of any state -

administered retirement system in order to

assist s uch retired members in paying the

costs of health insurance.

(2) ELIGIBILITY FOR RETIREE HEALTH

INSURANCE SUBSIDY. Ï (a) A person who is

retired under a state - administered

retirement system, or a beneficiary who is a

spouse or financial dependent entitle d to

receive benefits under a state - administered

retirement system, is eligible for health

insurance subsidy payments provided under

this section; except that pension recipients

under sections 121.40 , 238.07 (18)(a), and

250.22 , recipients of health insurance

coverage under s ection 110.1232 , or any

other special pension or relief act shall

not be eligible for such payments.

* * *

(d) Payment of the retiree health insurance

subsidy shall be made only af ter coverage

for health insurance for the retiree or

beneficiary has been certified in writing to

the Department of Management Services.

Participation in a former employerÓs group

health insurance program is not a

requirement for eligibility under this

se ction. Coverage issued pursuant to

s ection 408.9091 is considered health

insurance for the purposes of this sect ion.

* * *

(7) ADMINISTRATION OF SYSTEM. Ï The

Department of Management Services may adopt

such rules and regulations as are necessary

for the effective and efficient

administration of this section. The cost of

administration shall be appropriated from

the trust fund.

* * *

(9) BENEFITS. Ï Subsidy 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 cover age for health

insurance for the eligible retiree 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 effecti ve

retirement date. If, however, the division

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 subje ct

to assignment, execution, or attachment or

to any legal process whatsoever.

(Emphasis added.)

26 . Florida Administrative Code R ule 60S - 4.020(2),

provides that:

(2) Eligible retired members or

beneficiaries must make application to the

Division for t he Health Insurance Subsidy

and certify their health insurance coverage

in accordance with procedures established by

the Division in order to receive the Health

Insurance Subsidy. FRS Pension Plan

retirees or beneficiaries shall make

application and certi fy their health

insurance coverage to the Division on Form

HIS - 1 (Rev. 07/05 )

http://www.flrules.org/Gateway/reference.asp

?No=Ref - 00403 , Fl orida Retirement System

Pension Plan Health I nsurance Subsidy

Certification Form, herein adopted by

reference, which is mailed to the FRS

Pension RetireeÓs address of record when

placed on retired payroll and may also be

obtained from the Forms page of the

DivisionÓs website, www.frs.MyFlorida.com ,

o r by calling the DivisionÓs Retired Payroll

Section Toll Free at (888) 377 - 7687, if

calling from outside the Tallahassee calling

area or locally at (850) 488 - 4742, or if

hearing or speech impaired by calling the

Division via T.D.D. at the Florida Relay

Sys tem by dialing 711 or (800) 955 - 8771.

FRS Investment Plan retirees or

beneficiaries shall make application to the

Division for the Health Insurance Subsidy on

Form HIS - IP (Rev. 03/12)

http://www.flrules.org/Gateway/reference.asp

?No=Ref - 01936 , Florida Retirement System

(FRS) Application for Health Insurance

Subsidy for Investment Plan Members, herein

adopted by reference, and shall certify

their health insurance coverage to the

Division on Form HIS - IP - 2 (Rev 10/11 )

http://www.flrules.org/Gateway/reference.asp

?No=Ref - 00405 , Florida Retirement System

(FRS) Health Insurance Subsidy Certification

for Investment Plan Memb ers, herein adopted

by reference. Both of these forms may be

obtained from the Forms page of the

DivisionÓs website, www.frs.MyFlorida.com,

or by calling the DivisionÓs Bureau of

Retirement Calculations Toll Free at (888)

738 - 2252, if calling from outside the

Tallahassee calling area or locally at

(850) 488 - 6491, or if hearing or speech

impaired by calling the Division via T.D.D.

at the Florida Relay System by dialing 711

or (800) 955 - 8771. If the Division receives

such application and certification of he alth

insurance coverage within 6 months after

retirement FRS benefits commence, the

Retiree Health Insurance Subsidy may be paid

retroactive up to the effective retirement

date. If the Division receives the

certification of insurance coverage 6 or

more mo nths after retirement benefits

commence, the member will be eligible to

receive retroactive payments for a maximum

of 6 months only. Retroactive Retiree

Health Insurance Subsidy benefits can only

be paid for the months of certified health

insurance covera ge.

(Emphasis added) .

27 . Section 112.363, limits retroactive payment of HIS

benefits to a retiree to a maximum of six months. Respondent

has no authority to pay more than six months retroactive HIS

benefits to a retiree.

28 . Neither s ection 112.363 nor rule 60S - 4 . 020, impose s a

duty on Respondent to mail notice of the HIS benefit through

ce rtified mail or in any other fashion proposed by Petitioner .

The evidence established that Respondent complied with its legal

requirements when it mailed t he retiree pack e t to Petitioner at

his address - of - record when he was placed on the retired payroll

in July 2009.

29 . S imilarly, there is no legal duty placed on Respondent

to repeatedly notify or r emind retirees of the HIS benefit.

However, Respondent , in a ddition to meeting it s statutory and

rule requirements, sends additional reminders and newsletters to

retirees regarding the HIS benefit.

30 . Even assuming, as argued by Petitioner , that the HIS

benefit is an earned right , an entitlement not subject to

arbitrary forfeiture, and is tantamount to unclaimed property

under c hapter 717, Florida Statutes , such fact would still not

have compelled Respondent to contact Petitioner in any of the

manners asserted by Petitioner . Section 717.118, provides in

rele vant part:

717.118 Notification of apparent owners of

unclaimed property. Ï

(1) It is specifically recognized that the

state has an obligation to make an effort to

notify owners of unclaimed property in a

cost - effective manner. In order to provide

all the citizens of this state an effective

and efficient program for the recovery of

unclaimed property, the department shall use

cost - effective means to make at least one

active attempt to notify owners of unclaimed

property accounts valued at more than $25 0

with a reported address or taxpayer

identification number. Such active attempt

to notify apparent owners shall include any

attempt by the department to directly

contact the owner. Other means of

notification, such as publication of the

names of owners in the newspaper, on

television, on the Internet, or through

other promotional efforts and items in which

the department does not directly attempt to

contact the owner are expressly declared to

be passive attempts. Nothing in this

subsection precludes oth er agencies or

entities of state government from notifying

owners of the existence of unclaimed

property or attempting to notify apparent

owners of unclaimed property.

31 . Nothing in section 717.118, or elsewhere in chapter

717 , requires notification by certified mail or telephone.

Rather, Ðactive attemptÑ is defined as Ð any attempt by the

department to directly contact the owner. Ñ Even were section

717.118 applicable to the HIS benefit, FRS would have complied

with the obligation to make an Ðactive at temptÑ to contact

Petitioner, since it repeatedly mailed reminders directly to

Petitioner at his home address of record. 3 /

32 . Because Petitioner receives his monthly pension

benefit check by mail, and Respondent ' s records do not reflect

any returned mai l from Petitioner, the creditable, persuasive

ev i dence established that Respondent received the retiree packet

and other mailings regarding the HIS benefit.

33 . Respondent has no duty, let alone ability, to ensure

that FRS retirees actually open and rea d correspondence mailed

to them . Respondent discharged its duty to Petitioner when it

notified him by regular mail of his option to apply for the HIS

benefit.

34 . The evidence established that Petitioner applied for

and received the HIS benefit in Decemb er 2012 , and received

retroactive HIS benefits for six months beginning in June 2012.

Petitioner has received the maximum retroactive HIS payment

allowed by law and is not entitled to an y additional HIS benefit

payments .

RECOMMENDATION

Based on the forego ing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Retirement, enter a final order denying

PetitionerÓs request for additional HIS benefits retroactive to

his retirement date.

DONE AN D ENTERED this 2 2nd day of November , 2013 , in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Flor ida 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 2 2nd day of November , 2013 .

ENDNOTES

1 / Though denominated Re spondentÓs Initial Brief/Petition for

Review, the document was submitted to the Division of Retirement

by Petitioner.

2 / At hearing, Petitioner defined ÐBest EffortÑ to mean written

communication via certified mail, telephone call, or a notice in

the sam e envelope as his pension check.

3 / Nor would the use of certified mail be a Ðcost - effective

mannerÑ by which to remind retirees of their option to apply for

the HIS benefit, since some would simply choose not to apply,

either because they are not eligib le pursuant to section

112.363(2), or for other reasons.

COPIES FURNISHED :

Ronda L. Moore, Esquire

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

Oscar Walker

10836 Peaceful Harbor Drive

Jackson ville, Florida 32218

Dan Drake, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

Jason Dimitris, Gen eral Co unsel

Department of Management Services

Suite 160

4050 Esplanade Way

Tallah assee, Florida 32399 - 0950

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 tha t

will issue the Final Order in this case.