STATE OF NORTH CAROLINA - NC



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF NEW HANOVER 06 INS 0353

Daniel C. Johnson, )

Petitioner, )

)

v. ) DECISION

)

NC Teachers’ and State Employees’ )

Comprehensive Major Medical Plan, )

Respondent. )

This contested case came on to be heard before Fred G. Morrison Jr., Senior Administrative Law Judge, on June 12, 2006, in Surf City, North Carolina.

APPEARANCES

For Petitioner: Daniel C. Johnson, Pro Se

3416 Amber Drive

Wilmington, NC 28409

For Respondent: Daniel S. Johnson

Special Deputy Attorney General

North Carolina Department of Justice

P.O. Box 629

Raleigh, N.C. 27602

ISSUE

Whether Petitioner is entitled to a refund of the premiums he paid for the State Health Plan coverage he requested for his wife.

STATUTORY BACKGROUND

1. The State Health Plan provides benefits for its members subject to the limitations described in Chapter 135 of the North Carolina General Statutes. Under N.C. Gen. Stat. § 135-40, the State undertakes to make available a major medical plan which will pay benefits in accordance with the terms of the General Statutes. The General Assembly can change the terms of the plan. See N.C. Gen. Stat. § 135-40.14.

2. Under the applicable statutes, a qualifying State Employee is entitled to free coverage (noncontributory basis), but an employee’s spouse is only entitled to coverage in return for a premium (fully contributory basis).

3. N. C. Gen Stat. § 135-40.2 provides, in pertinent part:

(a) The following persons are eligible for coverage under the Plan, on a noncontributory basis, subject to the provisions of G.S. 135-40.3:

(1) All permanent full-time employees of an employing unit who meet the following conditions:

a. Paid from general or special State funds, or

b. Paid from non-State funds and in a group for which his or her employing unit has agreed to provide coverage.

Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.

(b) The following person shall be eligible for coverage under the Plan, on a fully contributory basis, subject to the provisions of G.S. 135-40.3:

(5) The spouses and eligible dependent children of enrolled teachers, State employees, retirees, former members of the General Assembly, former employees covered by the provisions of G.S. 135-40.2(a)(6), Disability Income Plan beneficiaries, enrolled continuation members, and members of the General Assembly. ....

4. N.C. Gen. Stat. §135-40.3 (e) provides: “Notwithstanding any other provision of this section, no coverage under the Plan shall become effective prior to the payment of premiums required by the Plan.”

FINDINGS OF FACT

1. Petitioner is a State employee and is a member of the North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan (“State Health Plan”).

2. During the pertinent time period, Petitioner was a professor at the University of North Carolina at Wilmington (“University”).

3. Petitioner’s wife is not a State employee.

4. Petitioner had been employed by the State for almost one year before he requested that his wife be added as an additional insured to the State Health Plan.

5. Petitioner’s request to add his wife to the State Health plan was a voluntary and optional decision on his part.

6. Coverage for a State Employee’s spouse (when the spouse does not also work for the State) is not free.

7. Petitioner contacted the local personnel officials at his place of work in order to add his wife to the State Health Plan. Petitioner did not contact anyone at the State Health Plan itself before or at the time of enrolling his wife.

8. The 2004 Benefit Booklet from the State Health Plan makes it clear that premium payments are due for the spouse of an employee. Petitioner had access to this Benefit Booklet information.

9. The enrollment form Petitioner signed to enroll his wife included the following language directly above his signature: “I hereby authorize my employer to deduct from my earnings any deduction for the coverage elected above.”

10. At no time before or during the enrollment process did Petitioner ask the local personnel officials at the University if his wife’s coverage would be free.

11. The local personnel officials at the University did not tell Petitioner that his wife’s coverage would be free.

12. Before signing the enrollment form, Petitioner did not ask anyone at the State Health Plan if his wife’s coverage would be free.

13. No one from the State Health Plan has ever promised Petitioner that coverage for his spouse would be free.

14. Even though Petitioner did not ask whether his wife would be covered free of charge, Petitioner contends that he mistakenly believed at the time of enrollment that his wife would be covered free of charge.

15. There is no evidence in the record that Respondent State Health Plan knew of, or in any way contributed to, Petitioner’s belief.

16. The State Health Plan provided the requested coverage for Petitioner’s wife and would have provided the applicable benefits if she had filed a claim.

17. Petitioner has canceled his wife’s coverage under the State Health Plan, and has requested a full refund of the State Health Plan premiums deducted from his pay for his wife’s coverage.

18. The State Health Plan has refused to provide the requested refund.

CONCLUSIONS OF LAW

1. Petitioner voluntarily enrolled his spouse in the State Health Plan.

2. The North Carolina General Statutes require the State Health Plan to impose a premium for State Health Plan coverage for a State employee’s spouse (except where the spouse is also a State employee).

3. Petitioner’s belief at the time of the enrollment decision that State Health Plan coverage for his wife would be free was a unilateral mistake of fact.

4. Petitioner did not contact the State Health Plan to inquire whether or not his spouse would be covered free of charge, and the State Health Plan benefits booklet discloses that such spousal coverage is not free.

5. There is no evidence in the record that Respondent State Health Plan knew of, or in any way contributed to, Petitioner’s unilateral mistake.

6. The formation of a binding contract may be affected by a mistake. Thus, a contract may be avoided on the ground of mutual mistake of fact where the mistake is common to both parties and by reason of it each has done what neither intended. Howell v. Waters, 82 N.C. App. 481, 347 S.E. 2d 65 (1986)

7. In general, a unilateral mistake in the making of an agreement, of which the other party is ignorant and to which he in no way contributes, will not afford grounds for avoidance of the agreement. Howell v. Waters, 82 N.C. App. 481, 347 S.E. 2d 65 (1986)

8. Petitioner is not entitled to any recovery from the Respondent State Health Plan for the premiums paid for his wife’s coverage.

DECISION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby decided that the decision of Respondent North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan to deny Petitioner’s reimbursement claim for premiums Petitioner paid for State Health Plan coverage of his wife is AFFIRMED.

NOTICE

The agency that will make the final decision in this contested case is the Board of Trustees of the North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan.

The agency making the final decision in this contested case is required to give each party an opportunity to file exceptions to this Recommended Decision and present written arguments to those in the agency who will make the final decision.

The agency is required by N. C. Gen. Stat 150B-36 to serve a copy of the final agency decision on all parties and to furnish a copy to each party’s attorney of record and to the Office of Administrative Hearings.

This the 3rd day of July, 2006.

________________________________

Fred G. Morrison Jr.

Senior Administrative Law Judge

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download