U.S. Labor Department Sues Leesburg, Ga., Professional Employer Organization for Health Plan Mismanagement

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - The U.S. Department of Labor has sued National Workforce Inc., Leesburg, Georgia, and two of its executives for mismanagement of the firm’s employee health plan.

“The law clearly requires those who administer health plans to do so in a careful, prudent and honest manner solely for the benefit of participants,” said Howard Marsh, director of the department’s Atlanta regional office of the Employee Benefits Security Administration (EBSA).

Filed in U.S. District Court in Albany, Georgia, the department’s legal action alleges that the company, its chief executive officer, Charles Kirkpatrick, and its chief operating officer, Sandra Kirkpatrick, violated provisions of the Employee Retirement Income Security Act (ERISA).

The suit charges that the defendants imprudently selected plan service providers, administrators and reinsurers, which resulted in the non-payment of claims to participants. The suit also alleges that the defendants caused or allowed plan assets to be transferred outside of the jurisdiction of U.S. district courts, and that they engaged in prohibited transactions.

The suit seeks a judgment ordering the defendants to restore to the plan all losses, including interest or lost earnings, which occurred due to their alleged ERISA violations. The department is also asking the court to remove the defendants from their positions as fiduciaries and appoint a successor to take over operation of the plan.

Employers with similar problems, who are not yet the subject of an investigation by EBSA, may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to correct violations of the law but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

The case resulted from an investigation conducted by EBSA’s Atlanta regional office. 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.

(Chao vs. National Workforce, Inc.)
Civil Action File Number 1:06-cv-4

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Archived News Release — Caution: Information may be out of date.

Contact Name: Dan Fuqua/Jo Anne Burgoyne
Phone Number: 404.562.2078/404.562.2076