DoL Bars Health Plan Provider for Mismanagement of Benefits

According to a DoL press release, the consent order bars the Idaho company and its executives from serving as fiduciaries or service providers to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA) in the future.

The ePEO Link health plan provided health benefit services as a multiple-employer welfare arrangement (MEWA) to approximately 1,500 employees of participating employers in 22 states, according to the release. The department sued ePEO Link and Integrated Professional Insurance Services Inc. (IPIS) in 2005, alleging that the defendants failed to:

• properly evaluate and underwrite benefits,
• collect sufficient contributions to pay promised benefits,
• adequately fund the plan and maintain reserves,
• obtain appropriate reinsurance, and
• maintain plan reports and records required by the plan.

In addition, IPIS president Lon Olmstead was separately charged with receiving commissions from the plan’s contracts with re-insurers.

All parties reached a settlement that will result in payment of approximately $2.37 million toward the ePEO Link plan’s unpaid health claims. The settlement covers ePEO Link and its principals Roger Jeffrey, Jacqueline Holovka, and Frederick Roh, as well as IPIS and Olmstead.

“The defendants’ misconduct caused workers and their families to be burdened with millions of dollars in unpaid health claims,” Secretary of Labor Elaine Chao said in the release. “I am pleased that the court barred the defendants from ever again being in a position to harm workers by mismanaging employee benefit plans.”