Labor Department Recoups $166,666 For Teamsters 348 Health Plan In Akron, Ohio

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has obtained a consent order and judgment against the Teamsters Local Union 348 Health and Welfare Fund in Akron which requires the fund’s trustees and its insurance company to restore $166,666.67 to the fund.

Named as defendants were the fund, its trustees Dan F. Darrow and Carl Reagan, and Anthem Life Insurance Company of Indiana.

A lawsuit filed simultaneously by the department alleged that the fund paid excessive administrative fees from March 1993 to April 1995 and that Darrow and Reagan failed to adequately monitor the fees which the fund paid to Anthem during that period. The fund paid administrative fees to Anthem equaling 8 percent of the total medical and disability claims paid each month and retained all interest earned on the fund’s checking account. Anthem provided administrative services to the fund and was a party-in-interest.

The defendants neither admitted nor denied the department’s allegations. There were 878 participants in the fund as of Dec. 31, 1998.

The consent order and judgment resulted from an investigation conducted by the Cincinnati Regional Office of the department’s Pension and Welfare Benefits Administration, which administers the Employee Retirement Income Security Act.

In announcing details of the case and its resolve, Regional Director Joseph R. Menez said, “The consent order and judgment represent not only the restoration of assets to a union health fund, but also should serve as an incentive for fund fiduciaries to perform effectively and in a manner that will safeguard the health plan assets for providing benefits to participants and beneficiaries.” Plan officials, participants and beneficiaries can reach the Cincinnati office at (859)578-4680 for help with any problems relating to private-sector pension and health plans.

The complaint and consent order were filed simultaneously in the federal district court in Cleveland on May 15. The consent order and judgment were entered in the court on May 19.

(Herman v. Teamsters Union Local 348 )
Civil Action No. 5:00CV-1224

Archived News Release — Caution: Information may be out of date.