Miller v. U.S. Office of Personnel Management, 8:99CV420 (D. Neb. 10/30/2000)
| Decision Date | 30 October 2000 |
| Docket Number | 8:99CV420. |
| Parties | JAMES R. MILLER v. UNITED STATES OFFICE OF PERSONNEL MANAGEMENT |
| Court | U.S. District Court — District of Nebraska |
This matter is before the court on the cross-motions for summary judgment filed by plaintiff, James Miller (Filing No. 10), and the defendant, United States Office of Personnel Management (OPM) (Filing No. 14). The motions were argued before this court on July 26, 2000. In addition to hearing oral argument, I have reviewed the administrative record, pleadings and briefs. Mr. Miller asks this court to direct OPM to pay or cause to be paid certain health insurance benefits to him.
Plaintiff's wife, Mrs. Miller, was at one time a federal employee who was covered by a government-sponsored health carrier, Principal Health of Nebraska. Mrs. Miller retired from government service in 1974. At that time she retained her health coverage, but did not elect to list Mr. Miller as a survivor annuitant. Mr. Miller was covered under the Principal health insurance policy as the spouse of Mrs. Miller.
Mr. Miller suffered from several illnesses, including Lou Gehrig's disease. He was placed in the Ambassador Omaha, a skilled care nursing facility, in December of 1995. At that time Principal denied insurance coverage to Mr. Miller on the basis that the care was "custodial" rather than "skilled." After exhausting the administrative requirements, Mr. Miller filed suit in federal court in Nebraska. During the pendency of the first lawsuit (Miller I), Mrs. Miller died. In September 1998 Judge Cambridge issued an opinion finding that the decision to not pay for Mr. Miller's care was arbitrary and capricious and ordered benefits paid to Mr. Miller. Miller v. Office of Personnel Management, No. 97CV327 (Neb. September 10, 1998).
Principal paid $253,640.95 in benefits which only covered Mr. Miller through June 30, 1997. Principal took the position that it owed no more money after that date, because Mrs. Miller had died June 20, 1997. The decision was based on the fact that Mr. Miller was required to elect to convert to an individual plan within 31 days, or in some cases within six months, after receiving notice from OPM of his right to convert. Principal took the position that Mr. Miller had received the notice and failed to notify Principal of his wish to convert.
After being contacted by the attorneys for Mr. Miller, Principal paid an additional 91 days that it was required to pay for Mr. Miller's care, which paid for Mr. Miller's care through September 1997. No additional payments have been made. Although denied by OPM for some period of time, it is no longer disputed that OPM failed to send the required notice to Mr. Miller of his right to convert to an individual plan.
Mr. Miller then filed a contempt proceeding in front of Judge Cambridge. However, Principal contended that the "new" coverage issues had not been raised before OPM. Rather than risk a later statute of limitations issue, Mr. Miller dismissed his suit and returned to OPM to attempt to obtain individual coverage. During this second request for review, OPM admitted that it had not sent notice of the right to convert to Mr. Miller.
In December 1998 Principal disassociated itself with the government plan and no longer provided health coverage for governmental employees.
OPM contends that it did not know of Mrs. Miller's death until at least five months after it happened. OPM argues that the first knowledge it had, if even then, was on November 17, 1997, when Miller's son inquired about life insurance proceeds. OPM further contends that it did not receive formal notice until May 12, 1998.
Mr. Miller filed this lawsuit asking for benefits from September 30, 1997, forward.
The standard of review for this court is whether the agency's actions are arbitrary and capricious. 5 U.S.C. § 706(2)(A); Nessein v. Mail Handlers Ben. Plan, 995 F.2d 804, 806 (8th Cir. 1993).
The relevant regulation is found at 5 C.F.R. § 890.401. There are five parts to section "c" of this regulation. These parts can be briefly summarized as follows. Part 1 requires OPM to notify Miller within 60 days after the enrollment ends of his right to convert; part 2 gives Miller 31 days after notice to request conversion; part 3 provides that if the above time lines are not met, then Miller has six months to request individual conversion; part 4 provides for retroactivity of coverage; and part 5 states that failure to convert within the 31 days after the carrier allows the conversion is deemed to be a waiver, unless such failure is beyond the individual's control.
OPM argues that the regulation clearly states that if the agency fails to notify a person of termination and a right to convert, that 890.401(c)(3) gives the person six months to request to convert. OPM further contends that it cannot mandate coverage by Principal, as Principal...
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