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EBSA News Release: [12/21/2005]
Contact Name: David James or Gloria Della
Phone Number: (202) 693-4676 or x8664
Release Number: 05-2339-SEA

Labor Department Sues Idaho Health Provider over Misuse of Plan Assets

SAN FRANCISCO —The U.S. Department of Labor has sued Idaho-based ePEO Link and its owners for mismanagement of the ePEO Link Inc. Group Accident and Health ERISA Medical Care Plan, failing to pay benefits when due and receiving illegal commissions from employers participating in the plan. The company provided payroll processing, human resources and health benefit services through a multiple employer welfare arrangement for employees of participating employers in 22 states.

"The company robbed workers of their health benefits and left families with millions of dollars in unpaid health claims," said Secretary of Labor Elaine L. Chao. "This is unconscionable and the department is seeking full restitution, plus interest, and lifetime bans that keep the defendants from ever again managing any federal pension plan."

The suit alleges that ePEO Link, Roger Jeffery, Jacqueline Holovka, Frederick Roh, Integrated Professional Insurance Services Inc. (IPIS) and Loh Olmstead violated the Employee Retirement Income Security Act (ERISA). The defendants are charged with failing 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 reports and records required by the plan. Olmstead was separately charged with receiving commissions from the plan's contracts with reinsurers.

At the time of the improper actions, ePEO Link was the plan's administrator, while Roh, Jeffery and Holovka were directors and owners of ePEO Link. IPIS and Olmstead provided claims administration services to the health plan. The plan provided medical, vision and dental benefits to approximately 1,500 employees of participating employers.

The suit seeks a court order to require the defendants to restore all plan losses with interest and return any illegal commissions received. In addition, the suit seeks to permanently bar the defendants from future service to any employee benefit plan governed by ERISA.

The suit, filed in federal district court in Oklahoma, resulted from an investigation conducted by the San Francisco regional office of the Labor Department's Employee Benefits Security Administration (EBSA). Tips on health benefits for small employers may be found at EBSA's Web site under www.dol.gov/ebsa/newsroom/fshlthinstips.html. Employers and workers can reach the San Francisco regional office at (415) 975-4600. Help with problems relating to private-sector retirement and health plans can also be obtained by calling EBSA's toll-free number, 1-866-444-EBSA (3272).

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