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Release Date: 06/24/2003
Release Number: ATL 03-140
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Miami, Florida - The U.S. Department of Labor
sued the principals of Well America Group, Inc. of Coral Gables, Florida,
on June 12 for mismanagement of 38 health plan clients, which left
participants in Georgia and Florida with more than $10 million in unpaid
medical claims. The health plans cover approximately 5,400 participants in
Florida and Georgia. |
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“The Department of Labor is taking legal action
against the principals of Well America Group, Inc. to protect employers
and their workers. Employers purchased health coverage for their employees
in good faith but unscrupulous operators mismanaged premium payments and
did not pay workers’ health claims,” said Secretary of Labor Elaine L.
Chao. “If Congress passes the Association Health Plan legislation, the
department will have a greater ability to oversee these types of plans and
combat abuse of health plans.“ |
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The department’s lawsuit names Geoffrey A. Cole, Sr.,
president and chief executive officer of Well America Group, and Vivian V.
Lehman, executive vice president and chief operating officer for the
company. Well America Group was not named as a defendant in the lawsuit
because the corporation has been dissolved. The participating employers
and their agents have paid many of the outstanding claims. |
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The suit alleges that Cole and Lehman imprudently used
premiums contributed by participants of one plan to pay claims of
participants in another plan without knowledge of employers. The
defendants also failed to procure and/or maintain letters of credit to
protect each plan from the possibility that premiums and stop-loss
insurance would be insufficient to pay all covered claims, to keep
separate bank accounts for each plan, and to provide monthly statements of
each account to employers. The suit also alleges that Cole inappropriately
received commissions from stop-loss insurers and from Vision Select, a
provider of discounted vision-related products to participants in the
plans. |
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Cole and Lehman established the Well America program in
1998 to provide services to employers seeking health insurance coverage
for their workers. Each plan included a schedule of health benefits, a
preferred provider network, a prescription drug benefit and a worksite
health management program. Eligible employees could participate in the
plan in exchange for monthly premiums, with Well America guaranteeing
premium rates for plan participants for the first 24 months of the
management agreements. |
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The suit, filed in federal district court in Miami,
seeks to restore to the plans all losses with interest, remove Cole and
Lehman from their positions with the plans and permanently bar them from
serving or having control over assets of any ERISA-governed employee
benefit plan. The suit also asks the court to appoint a successor
fiduciary to take over and terminate the plans. |
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Employers and workers can contact the regional office
at 404.562.2156 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for
help with problems relating to private-sector pension and health plans. |
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(Chao v. Cole)
Civil Action No. 03-21576 |
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |
