U.S. Labor Department Sues Board of Trustees of Rhode Island Electrical Workers Union Health Plan to Recover Improper Benefit Payments

Archived News Release — Caution: Information may be out of date.

Boston, Massachusetts - The U.S. Department of Labor has filed suit in the U.S. District Court for Rhode Island to recover nearly $30,000 in improper benefit payments from the trustees of the International Brotherhood of Electrical Workers Local Union 99 Health and Welfare Fund.

The suit, filed May 31, 2001, charges Board of Trustees members Ernest W. Audet, Jr., G. Thomas Chabot, Raymond J. Lambert, James W. Crandall, Normand L. Jodoin, Thomas J. Lynch, and John I. McGee with violations of the Employee Retirement Income Security Act (ERISA), the federal law that protects private employee pension and welfare benefit plans.

The suit alleges that, between January 1994 and December 31, 1995, those named individuals who were trustees during that period failed to adequately review, monitor and ensure the accuracy of employee eligibility information which they provided to Provident Life and Accident Insurance Company, which was serving as a third party administrator of the health and welfare plan. Under its agreement with the plan, Provident received and processed employee claims in accordance with the terms of the plan. Eligible employees worked for various employers who had collective bargaining agreements with IBEW Local Union 99.

The suit alleges that the plan paid approximately $29,424.60 in medical benefits on behalf of seven employees who were ineligible to participate in the plan, and that the trustees, aware that benefits were paid to ineligible participants, failed to take appropriate action to recover the monies.

ERISA requires that employee benefit plan assets be used and administered solely for the benefit of the plan’s participants, according to James Benages, regional director in Boston for the Labor Department’s Pension and Welfare Benefits Administration, which administers ERISA.

Therefore, the department’s suit seeks a court order requiring the trustees to restore to the plan any and all losses incurred as a result of their actions or inactions; and prohibiting them from future violations of the law.

The Labor Department’s legal action followed an investigation by the Boston Regional Office of the Pension and Welfare Benefits Administration. That office is located in Room 575 of the John F. Kennedy Federal Building in Boston. The telephone number is 617.565.9600.

(Chao v. Ernest Audet, Jr., et al
Civil Action No. 01-270-L)

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