Responsibility for the payment of health insurance claims

Responsibility for the payment of health insurance claims

Berkowitz v Neuman, 283 AD2d 179

This “denial of health insurance benefits” case was brought on behalf of Mildred Neuman, a retired employee of the Mount Vernon City School District, who was a beneficiary under the District's Employee Health Benefit Plan.

The health insurance plan [plan] was administered by American Group Administrators (AGA) until August 31, 1997, when United HealthCare became the insurance carrier for the District.

Although the greater part of the ruling addresses questions concerning Neuman’s eligibility for benefits based on her receiving treatment that was a “covered medically necessary” in contrast to seeking benefits for “excluded custodial care,” the Appellate Division also addressed the question of liability for the payment of benefits in the event a health insurance plan administrator is found to have incorrectly denied a covered individual benefits available under the health insurance plan.

The Appellate Division's conclusion:

Even if the plan administrator was solely responsible for determining medical necessity and made an incorrect determination, payment of the claim would still be the plan's responsibility.

Employee contributions by a member of a public retirement system as “disposable income” for the purposes of filing for bankruptcy

NYC Employees' Retirement System v Sapir, CA2,243 F.3d 124*

Sharlene De Ann Taylor, an employee of the New York City Housing Authority [NYCHA], filed for Chapter 13 bankruptcy in accordance with 11 U.S.C. 1325(b). Her employment required Taylor to join the New York Cite Employees' Retirement System [NYCERS]. This, in turn, required that she make an employee contribution of $134.20 per month. This amount is automatically deducted from her salary and deposited with NYCERS. This mandatory employee retirement contribution is the focus of the Circuit Court of Appeals inquiry in this action.

The basic issue the Circuit Court of Appeals, Second Circuit was asked to resolve in the Taylor case was whether or not Taylor’s employee contributions to the Retirement System, required by State law, was “disposable income” within the meaning of the federal Bankruptcy Code. In other words, are the monies required as the employee's contribution to NYCERS insulated from being distributed among Taylor's creditors?

Section 1325(b)(2)(A) of the Bankruptcy Code defines “disposable income,” as is applicable here, as “income which is received by the debtor and which is not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor.” The Bankruptcy Code, however, does not define “reasonably necessary.”

The Second Circuit decided to provide bankruptcy court judges with a “flexible solution,” allowing those courts to consider the facts in each individual case in determining whether or not the pension contributions qualify as a “reasonably necessary” expense for that debtor.

If the bankruptcy judge finds that the such contributions are a reasonably necessary expense for an individual debtor based on the circumstances confronting that debtor, that amount will excluded in the determining “disposable income” for the purposes of the bankruptcy proceeding.**

Conversely, if the judge finds that the contributions are not a reasonably necessary expense for an individual debtor based on the circumstances confronting that debtor, they will be included in determining the amount of an individual's disposable income, and the employee contribution deduction will be ordered discontinued for the duration of the Bankruptcy Plan. In determining whether or not pension contributions are reasonably necessary for an individual debtor, the Circuit Court said that the bankruptcy judge may consider any factors properly before the court, including but not limited to:

1. The age of the debtor and the amount of time until expected retirement;

2. The amount of the monthly contributions and the total amount of pension contributions debtor will have to buy back if the payments are discontinued;

3.The likelihood that buy-back payments will jeopardize the debtor's fresh start;

4. The number and nature of the debtor's dependents;

5. Evidence that the debtor will suffer adverse employment conditions if the contributions cease;

6. The debtor's yearly income; and

7. The debtor's overall budget

The Circuit Court also said that the Bankruptcy Court judge could also consider any other constraints on the debtor that make it likely that the pension contributions are reasonably necessary expenses for that debtor. These could include, for example, the obligations set out in a divorce decree with respect to distribution of pension assets to a spouse.

The court commented that “[a]dministrative inconvenience to NYCERS and NYCHA, however, is not to be considered. The impact on the administrator of the fund is irrelevant in determining whether or not the pension contribution is a reasonably necessary expense to an individual debtor.

* The respondent “Sapir” is Jeffrey L. Sapir, the standing Chapter 13 Trustee for the Southern District of New York.

** A retirement system member’s retirement allowance consists of two parts: an annuity portion funded by the employee’s contributions to the system and a pension portion underwritten by employer contributions to the system. Presumably the “discontinuation of employee contributions” for the duration of the Bankruptcy Plan will have an impact only on the annuity portion of the individual’s retirement allowance.

Preparing an adequate defense to disciplinary action requires sufficient notice of charges

Preparing an adequate defense to disciplinary action requires sufficient notice of charges

Gustafeste v NYC Dept. of Sanitation, 282 A.D.2d 398

When an employee is served with disciplinary charges, he or she is entitled to be given information concerning such charges sufficient to permit his or her adequately preparing his or her defense [Pachucki v Walters, 56 AD2d 677]. Further, case law has long held that an employee may not be found guilty of acts of misconduct or incompetence that have not been charged [Shuster v Humphrey, 156 NY 231].

The Gustafeste case focused on the issue of providing the employee with sufficient information concerning the charges in order for him or her to be able to prepare his or her defense so that it cannot rightfully be claimed that the individual was found guilty acts or omissions that were not charged.

Joseph Gustafeste, a New York City Department of Sanitation employee, was found guilty of misconduct following his involvement in an accident while operating a department motor vehicle. The penalty imposed: a 30-day suspension without pay.

Gustafeste appealed, contending that the charges of misconduct filed against him by the department did not specifically charge him with having “caused the accident by negligently losing control of his vehicle.” Accordingly, he argued, he had not been given an adequate opportunity to prepare his defense against this allegation.

The Appellate Division decided that it was clear from the specifications set out in the charges filed against him that Gustafeste was being charged with “negligently operating his vehicle.” This, said the court, meant that Gustafeste had been given sufficient notice of the charge of which he was found guilty so as to enable him to adequately prepare his defense.

As to the penalty imposed – a 30-day suspension without pay -- the Appellate Division ruled that for the misconduct proved against [Gustafeste], some of which involved violations of Department of Sanitation safety rules, [such a penalty] does not shock the judicial conscience and accordingly may not be disturbed.”

Sometimes an employee will demand “a bill of particulars” requiring the employer to set out the charges and specifications filed against the individual in greater detail.

Although Education Law Section 3020-a 3 c(iii)(C) indicates that an administrator or teacher has the right to demand a “bill of particulars” concerning the charges and specifications filed against him or her, no similar provision is included in Section 75 of the Civil Service Law. In some instances the disciplinary grievance procedure set out in a collective bargaining agreement allows the employee to demand a “bill of particulars.”

Terminated probationer’s right to due process protected by the availability of a meaningful “post-deprivation” remedy

Terminated probationer’s right to due process protected by the availability of a meaningful “post-deprivation” remedy

Rivera v Community School District 9 [NYC], USDC SDNY, Justice Stein, [Not officially reported]

Anna Rivera, a probationary teacher employed by New York City's Community School District 9, was terminated.

Claiming that the district violated her right to due process rights by dismissing her without holding a pre-termination hearing and violated her First Amendment rights by terminating her in retaliation for filing a notice of claim against other employees, Rivera appealed.

Justice Stein ruled that:

1. Under New York State law, a probationary employee such as Rivera has no property interest in her job that would entitle her to due process rights; and

2. Although a probationary employee, Rivera does have a liberty interest in clearing her name from the stigma of accusations of dishonesty that entitles her to due process.

Justice Stein noted that Rivera was terminated because the superintendent of Community School District Nine concluded that Rivera cheated on standardized tests, pressured other teachers into cheating, and attempted to assault another teacher for refusing to cooperate in the cheating scheme. These allegations were disseminated to the public and repeated in letters to Rivera.

Rivera denied these charges. Because these accusations impugn Rivera's honesty, said Justice Stein, she has a liberty interest that is protected by the Due Process Clause. As to a remedy, the court said that Due Process Clause of the Fourteenth Amendment is not violated “so long as the state provides a meaningful post-deprivation remedy.”*

Was such a “post deprivation remedy” available to Rivera? Yes, said the court. New York's Article 78 [Article 78, Civil Practice Law and Rules] proceeding has been held to provide an adequate post-deprivation remedy in such situations.

* Courts have ruled that providing a probationary with a “name-clearing hearing” meets the requirements for a meaningful post-deprivation process.

Verification of an appeal to the Commissioner of Education

Verification of an appeal to the Commissioner of Education

Decisions of the Commissioner of Education 14,523

Frequently the rules for filing an administrative appeal require that the appeal be “verified” under oath by one or more of the parties filing the appeal. Failure to comply with such a requirement is often a fatal omission as the Booker decision by the Commissioner of Education indicates.*

The parents of Elizabeth Booker filed an appeal with the Commissioner alleging that the Baldwinsville Central School District “engaged in unlawful racial discrimination against their daughter.”

The verification of their appeal, however, was signed by Demetria Booker, an individual whom the Commissioner said was not a party to the appeal.

The Commissioner said that the appeal had to be rejected on procedural grounds alone, commenting that “[w]here a petition is not properly verified, it must be dismissed.”

* Section 275.5 of the Regulations of the Commissioner [8 NYCRR 275.5], requires that all pleadings in an appeal before the Commissioner be verified by the oath of at least one of the petitioners.