FSM SUPREME COURT TRIAL DIVISION
Cite as Chuuk Health Care Plan v. FSM Social Sec. Admin. 24 FSM R. 216 (Chk. 2023)
CHUUK STATE HEALTH CARE PLAN,
Plaintiff,
vs.
FSM SOCIAL SECURITY ADMINISTRATION,
Defendant.
CIVIL ACTION NO. 2017-1005
ORDER RE: MOTION TO DISMISS AND MOTION FOR PARTIAL SUMMARY JUDGMENT
Dennis L. Belcourt
Associate Justice
Hearing: May 8, 2023
Decided: August 1, 2023
APPEARANCES:
For the Plaintiff:
Johnny Meippen, Esq.
P.O. Box 705
Weno, Chuuk FM 96942
For the Defendant:
Michael J. Sipos, Esq.
P.O. Box 2069
Kolonia, Pohnpei FM 96941
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When the non-movant did not file a memorandum in opposition to a motion, this may be deemed a consent to the motion, but, even when there is no opposition, the court will decline to grant a motion in the absence of good grounds for it. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 220 (Chk. 2023).
A court evaluates a Rule 12(b)(6) motion to dismiss only on whether a plaintiff's claim has been adequately stated in the complaint and does not resolve the case's facts or merits. A court's review is limited to the complaint's contents and the court must assume the facts alleged therein are true and view them in the light most favorable to the plaintiff. Dismissal can only be granted if it appears to a certainty that no relief could be granted under any facts which could be proven in support of the complaint, but good grounds exist if it appears to a certainty that the defendant could not be liable for assessments or premiums under the Act and related regulations. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 220 (Chk. 2023).
The Chuuk Constitution requires that the state government provide for the establishment and administration of a comprehensive system of medical or health insurance which is mandatory for all employed Chuuk residents while present in Chuuk. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 220-21, 222 (Chk. 2023).
The Chuuk Health Care Plan automatically covers all Chuuk residents, employed or not, except noncitizens who are not employed and are not dependents of enrollees, but including persons stationed on Chuuk who are employed by a national government entity. Coverage may be extended, by agreement with other governments or entities, to otherwise ineligible persons, such as non-Chuukese who are not present on an ongoing basis (and thus aren't Chuuk residents) or non-citizen residents who are not employed, such as retirees. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 221 (Chk. 2023).
While requiring near-universal coverage, the Chuuk Health Care Act leaves it up to the Board, through regulations, as to from whom and how much it requires payment. For purposes of financing, the Act divides coverage into two levels: 1) universal coverage for essential care, as provided for by regulation, for which the Plan Board assesses the requisite amounts and sources and receives payments, and 2) additional levels of coverage, for which the Board determines the premium amounts to be charged by the Plan, bills, and receives payments thereon. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 221 (Chk. 2023).
The Chuuk Health Care Plan is to be operative only on the enactment of the financing system for the essential level of health insurance mandated by the law. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 222 (Chk. 2023).
By its express terms, the 2001 financing mechanism for the Chuuk Health Care Plan is only imposed on private sector employers and employees and Chuuk State government and its employees and fails to impose charges on FSM entities or their employees. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 222 (Chk. 2023).
The Chuuk Constitution, Article X, section 7 does not speak to who pays for the health care program it requires to be established. It only requires that the program must be provided to all employed residents present in Chuuk and funds received must be kept separate. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 222 (Chk. 2023).
The references to premiums in Chuuk Health Care Act sections 5.1 and 5.2 do not apply to assessments for the essential level coverage. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 222 (Chk. 2023).
The amount necessary to fund the Chuuk Health Care Plan essential level coverage must be assessed by regulation and the aggregate of all universal coverage payments and premium amounts, along with other sources of income, must be sufficient to pay all costs of benefits under the Plan, the costs of administering the Plan, and unexpected demands on the Plan for payment and other purposes. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 222 (Chk. 2023).
Courts apply the plain meaning whenever possible to the interpretation of statutes. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 223 (Chk. 2023).
The Social Security Administration is not liable for Chuuk Health Care Plan premiums for the period in which the 2001 Regulations were and are in effect without amendment, but if an alleged 2012 amendment adding national government employees is law, then it may be liable. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 223 (Chk. 2023).
A motion including a certificate of service signed by the movant's counsel, indicating that the motion was served that day by mail on a named attorney not representing a party in the case, without any indication of service on the opposing party's counsel for record, will be denied for noncompliance with FSM Rule of Civil Procedure 5(a) when there is no indication (such as a response) in the record that the correct counsel received the motion. Chuuk Health Care Plan v. FSM Social Sec. Admin., 24 FSM R. 216, 223 (Chk. 2023).
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DENNIS L. BELCOURT, Associate Justice:
This is a collection action in which Plaintiff, Chuuk State Health Care Plan ("the Plan") is seeking to obtain payment of unpaid health insurance premiums starting October 2010 from Defendant, FSM Social Security Administration (FSMSSA), under Chuuk State Law No. 2-94-06 ("the Act"). This matter is before this Court on FSMSSA's March 14, 2017 motion to dismiss and the Plan's November 17, 2022 "renewed" motion for partial summary judgment.1 At this Court's hearing on May 8, 2023, FSMSSA asked that the Court rule on its motion to dismiss. The Court defers ruling on the motion to dismiss awaiting the outcome of the evidentiary hearing, and it denies the Plan's motion for partial summary judgment. My reasoning is as follows.
The Plan brought this action on February 20, 2017. In its complaint, it asserts that FSMSSA is an employer under the Act of at least nine (9) persons who are residents of Chuuk, and is liable to the Plan for premium contribution shares of both employer and those employees "in the same way that an employer is liable to the FSM Social Security Administration for both the shares of employees and employers under the FSM Social Security Administration Act." The Plan asserts that in 2010, the Chuuk State Attorney General issued a reminder to employers "within the contemplation of" the Act, including FSMSSA, that enrollment in the Plan is mandatory for all employed residents of Chuuk. However, "FSM National Government, the FSM Social Security Administration in Chuuk," has not paid any premiums to the Plan from the letter to the date of filing, owing approximately $16,000 for the period from October 1, 2010 to December 31, 2016. The complaint demands payment in the amount of $16,000 plus a running amount calculated at $175 biweekly.
On March 14, 2017, FSMSSA filed a motion to dismiss pursuant to FSM Rule of Civil Procedure 12(b)(6), on grounds that the complaint failed to state a claim upon which relief can be granted. Specifically, the motion contended neither the Act nor regulations of the Plan provide for assessment against FSMSSA and further states that FSMSSA has not been billed and is not on the list of entities to which a demand was made as shown on the exhibit to the complaint.
FSMSSA notes that section 5-1 of the Act prescribes that assessments for essential care and premiums for additional levels of coverage are "by regulation." FSMSSA states that the complaint is deficient for failing to reference the applicable regulations. Further, FSMSSA contends that the Plan's regulations do not apply to it, specifically citing to Chapter III, part 1.3.8 of the regulations, which, under the heading "Financing of Premium" imposes "on the gross wages of all employed residents of the State of Chuuk which shall be payable by employers and employees in accordance with the following:"
| Chuuk State government | 2.5% |
| Chuuk State government employee | 2.5% |
| Private Sector Employer | 2.5% |
| Private Sector Employee | 2.5% |
As FSMSSA is neither the Chuuk State Government nor a private sector employer, it contends that "Part 1.3.8 (of Chapter III of the Regulations) is not applicable to (it) and does not obligate (it) to pay premiums." FSMSSA also notes that the regulations, specifically Parts 1.3.9 through 1.3.12, make no provision for collection from the FSM National Government.
The Plan did not file an opposition to the motion to dismiss. Nevertheless, by order dated October 21, 2019, this Court scheduled a hearing on the motion to dismiss, which was held on November 6, 2019. At that hearing, as noted by this Court's order thereon issued on January 17, 2020, the Plan made known to FSMSSA the purported existence of 2012 regulation amendments that, according to the Plan's attorney, changed the reference to "Chuuk State employees and Chuuk State Government" to "'Public Sector' employers and employees." However, the Plan has not filed a copy of such amendments in this proceeding.
In its January 17, 2020 order, this Court indicated that it would take the motion to dismiss "under advisement and further review the parties' filings and take the arguments of counsel into account in issuing a decision at a later date." It also set an evidentiary hearing for April 8, 2020 on the 2012 amendments to the Plan regulations on April 8, 2020 (now August 22, 2023).
The Plan did not file a memorandum in opposition to the motion to strike or dismiss and thus may be deemed to have consented to the motion. FSM Civ. R. 6(d). Nevertheless, even where there is no opposition, this court will decline to grant a motion in the absence of good grounds for the motion. Berman v. Pohnpei, 17 FSM R. 360, 374 (App. 2011) (trial court denied unopposed cost request on ground of inadequate factual showing); Pacific Fin. Corp. v. David, 21 FSM R. 5, 6 (Chk. 2016) (motion for summary judgment failed to overcome statute of limitations defense); FSM Social Sec. Admin. v. Chuuk Public Utility Corp.,16 FSM R. 333, 334 (Chk. 2009) (failure to assert meritorious defense as grounds for denial of motion to vacate an entry of default); In re Parcel No. 046-A-01, 6 FSM R. 149, 152 (Pon. 1993) (unopposed motion that fails to comply with Civil Rule 7(b) is denied and thus may be deemed to have consented to the motion).
Legal Standard
A court evaluates a Rule 12(b)(6) motion to dismiss only on whether a plaintiff's claim has been adequately stated in the complaint and does not resolve the facts or merits of the case. A court's review is limited to the complaint's contents and the court must assume the facts alleged therein are true and view them in the light most favorable to the plaintiff. Dismissal can only be granted if it appears to a certainty that no relief could be granted under any facts which could be proven in support of the complaint. Ambros & Co. v. Board of Trustees, 11 FSM R. 17, 24 (Pon. 2002).
Application of Legal Standard
Good grounds exist if it appears to a certainty that FSMSSA could not be liable for assessments or premiums under the Act and related regulations on the facts as alleged in the complaint. For answers whether FSMSSA could be liable, I turn to the legal framework of the Act and regulations adopted pursuant thereto.
The Legal Framework
Health Care Coverage under the Act
Section 7 of Article X of the Chuuk State Constitution, which took effect in 1989, reads as follows:
The State Government shall provide for the establishment and administration of a comprehensive system of medical or health insurance which is mandatory for all employed residents of the State of Chuuk while present in the State. All revenues received under this system of medical or health insurance, and all other revenues received by the Health Department as payment for medicine and medical services, shall be separated from any general fund established by the Legislature and used only for medical purposes.
The Chuuk State Legislature enacted Chuuk State Law No. 2-94-06 (the "Chuuk Health Care Act of 1994" ("the Act")) to
improve the provision and quality of health to residents of the State of Chuuk, to establish a financial system to provide universal coverage of an essential level of health care for all eligible enrollees and to create a means for collection of health care premiums for additional coverage.
Chk. S.L. No. 2-94-06, § 1-2.
Section 3-1 of the Act mandates coverage for residents of Chuuk as follows:
Every resident of Chuuk shall be enrolled in and shall be eligible to receive benefits as provided under this Act, except that unemployed noncitizens residing in the State who are not dependents of enrollees are not eligible, except as provided in Section 3-2 of this Act.
Section 3-2 of the Act, in pertinent part as follows, permits the Plan, through its Board, to enter into agreements to cover persons who in Chuuk but are not employed Chuuk residents, as follows:
The Board is authorized to enter into agreements with the National Government, international organizations, or other entities to extend the benefits of this Act to persons within Chuuk not otherwise eligible therefor.
The plain meaning of Section 3-1 and 3-2 of the Act, read together, is that the Plan automatically covers all Chuuk residents, employed or not, except noncitizens who are not employed and are not dependents of enrollees. Chuuk Health Care Plan v. Department of Educ., 18 FSM R. 491, 496 (Chk. 2013). According to the clear terms of those provisions, the class of persons who are automatically enrolled includes persons stationed on Chuuk who are employed by a National Government entity, such as FSMSSA. Section 3-2 does not apply to resident employees of FSM entities who are already covered by operation of section 3-1. Rather section 3-2 is in the law to allow coverage to be extended, by agreement with other governments or entities, to otherwise ineligible persons, such as non-Chuukese who are not present on an ongoing basis (and thus aren't Chuuk residents) or non-citizen residents who are not employed, such as retirees.
Financing under the Act
While requiring near-universal coverage, the Act leaves it up to the Board, through regulations, as to from whom and how much it requires payment. For purposes of financing, the Act divides coverage into two levels: (1) universal coverage for essential care, as provided for by regulation, for which the Plan Board assesses the requisite amounts and sources and receives payments, and (2) additional levels of coverage, for which the Board determines the premium amounts to be charged by the Plan, bills and receives payments thereon. Chk. S.L. No. 2-94-06, §§ 4-7, 5-1, 5-2. The assessment and determination of premium amounts to be charged are done by regulation. Id. The Act contemplates that financing of the essential level of health insurance coverage would be pursuant to a proposal submitted by the Board to the legislature. Id. § 8-2. The Act further provides that "no level of coverage may be extended, no mandatory premiums may be imposed, nor obligation to provide benefits deriving therefrom may be undertaken prior to the enactment of a financing system for coverage of persons under the essential level of care pursuant to Title VII2 of this act." Chk. S.L. No. 2-94-06, § 10-1. In other words, the Plan is to be operative only on the enactment of the financing system for the essential level of health insurance mandated by the law.
Financing Provisions in the 2001 Regulations
On May 16, 2001, the Governor of the State of Chuuk signed regulations approved by the Plan Board,3 which included a provision taxing private sector employers, private sector employees, Chuuk State, and Chuuk State employees on the employees' gross wages at the rate of 2.5%for the employer's share and 2.5% for the employee's share. This financing mechanism is in Chapter III, part 1.3.8 of Chuuk State Health Care Plan Regulations ("the 2001 Regulations"). The funds received from the tax are to be deposited in the Trust Fund established by the Act. Part 1.3.3 of the Regulations and the Act, section 6-1(1) and (2). In the 2001 Regulations, the Board, with the Governor's approval, also set premiums for additional coverage. Part 2.0.3(3).
The financing mechanism in Chapter III, Part 1.3.8 of the 2001 Regulations, by its express terms, is only imposed on private sector employers and employees and Chuuk State government and its employees. By its terms, that provision fails to impose charges on FSM entities or their employees.4 As FSMSSA is not a state or private entity, the provision does not apply to it
The question for this Court is whether it should read Chapter III, Part 1.3.8 of the 2001 Regulations to apply the tax to all employers and employees, noting the intent of Article X, section 7 of the Constitution and the Act to provide universal coverage to Chuuk employees and their dependents.
Article X, section 7 does not speak to who pays for the program it requires to be established, only that the program must be provided to all employed residents present in Chuuk and funds received must be kept separate:
The State Government shall provide for the establishment and administration of a comprehensive system of medical or health insurance which is mandatory for all employed residents of the State of Chuuk while present in the State. All revenues received under this system of medical or health insurance, and all other revenues received by the Health Department as payment for medicine and medical services, shall be separated from any general fund established by the Legislature and used only for medical purposes.
Id.
In sections 5-1 and 5-2, the Act sets certain requirements for billing for premiums for additional coverages, which premiums are provided for in Chapter III, Part 2.0.3 of the Regulations. Given the precise wording of the Act and its differentiation between assessments for the essential level of coverage and premiums for additional coverage, I find that the references to premiums in sections 5.1 and 5.2 do not apply to assessments for the essential level coverage.
On the other hand, there are requirements that the amount necessary to fund the essential level coverage be assessed by regulation and that "[t]he aggregate of all universal coverage payments and premium amounts, along with other sources of income for the Plan, shall be sufficient to pay all costs of benefits under the Plan, the costs of administering the Plan and unexpected demands on the Plan for payment and other purposes." Chk. S.L. No. 2-94-06, § 5-1(1).
These requirements do not justify this Court in rewriting Chapter III, Part 1.3.8 of the 2001 Regulations to reach beyond what its plain meaning provides. Courts apply the plain meaning whenever possible to the interpretation of statutes. Rodriguez v. Bank of the FSM, 11 FSM R. 367, 378 (App. 2003); FSM v. Wainit, 12 FSM R. 105, 111 (Chk. 2003) (when the statute's language is plain and unambiguous, it declares its own meaning and there is no room for construction). So it is with regulations as well. FSM v. Nifon, 14 FSM R. 309, 313 (Chk. 2006). Unable to construe Chapter III, Part 1.3.8 of the 2001 Regulations to apply to FSMSSA and its employees in Chuuk, I find that the Plan is not entitled to hold FSMSSA liable under the Complaint for the period in which the 2001 Regulations were and are in effect without amendment.
The 2012 Regulation Amendment
In oral argument before this Court on November 6, 2019, counsel for the Plan mentioned for the first time in this proceeding that a regulation amendment purportedly adopted in 2012 changed the applicable law as to whether National Government entities were liable for the taxes sought by the Plan to be recovered in this proceeding. If, as described at hearing, such an amendment were in place, it would be a basis for denying the motion for dismissal, as it would not be a certainty that no relief could be granted to the Plan on the set of facts it has alleged.
In its order dated January 17, 2020, this Court deferred action on FSMSSA's motion to dismiss because it did not know whether the 2012 Regulation Amendment was the law, and, without so knowing, it could not determine whether good grounds exist for the motion. As the evidentiary hearing on the 2012 Regulation Amendment has not been held, my decision on the motion to dismiss will await that the outcome of that process. I therefore defer ruling on the motion to dismiss.
On November 17, 2022, the Plan filed a "renewed" motion for partial summary judgment. That filing included a certificate of service signed by the Plan's counsel, indicating that it was served that day by mail on "Nora Sigrah Esq. Kolonia, Pohnpei FM 96941"; without any indication of service on the counsel for record for FSMSSA, Michael Sipos. This motion is denied for noncompliance with FSM Rule of Civil Procedure 5(a) (motions served on other parties) and (d) ("[a]ll papers after the complaint required to be served upon a party shall be accompanied by certificate of service of copies upon all other parties"). There is no indication (such as a response) in the record that FSMSSA's correct counsel received the motion. I therefore deny the motion.
Ruling on FSMSSA's motion to dismiss is deferred, and the Plan's motion for partial summary judgment is denied. The Court will receive evidence and hear argument as to the 2012 Regulation Amendment at the evidentiary hearing on August 22, 2023, at 10:00 am.
_______________________________Footnotes:
1 The motion was titled as a "Renewed Motion for Partial Summary Judgment," although there does not appear to be an initial motion for partial summary judgment.
2 This appears to be a typo, and should instead be Title VIII.
3 FSMSSA excerpted portions of the 2001 regulations, which can be found at http://fsmlaw.org/chuuk/regulations/index.htm.
4 Note that the Plan claims reimbursement rights as to other coverage of FSM National Government employees residing in Chuuk (such as through MiCare). See 2001 Regs. ch. V, pt. 3.0.1 (coordination of benefits).
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