U.S. Department of Labor sues defunct Sparks, Maryland, company to protect health plan participants

Archived News Release — Caution: Information may be out of date.

Sparks, Maryland — The U.S. Department of Labor has sued Integrated Health Services Inc. of Sparks, Maryland, for violating its fiduciary duties under the Employee Retirement Income Security Act (ERISA) to the company’s health plan. The company filed for bankruptcy in February 2000.

Integrated Health Services, a nationwide health care service company, provided health benefits to the employees of its subsidiary, Symphony Health Care. Employees contributed to the plan through payroll deductions of 28.4 percent toward insurance premiums for coverage from Anthem Insurance Cos. Inc. IHS/Symphony was listed as the policy holder by Anthem, a mutual insurance company. In 2001, Anthem – now WellPoint – became a stock company, issuing stock to all policy holders including IHS/Symphony.

An investigation conducted by the department’s Employee Benefit Security Administration (EBSA) found that IHS failed to claim these stock proceeds on behalf of the plan and to ensure that they were returned to the plan. Nobody is currently administering the plan.

“Fiduciaries have a responsibility to act in the best interest of plan participants by properly managing plan assets,” said Mabel Capolongo, director of EBSA’s Philadelphia Regional Office.

Filed in the U.S. District Court for the District of Maryland, the suit seeks to remove Integrated Health Services as fiduciary of the IHS/Symphony Health Plan; direct WellPoint to register 797 of the shares held in the name of IHS/Symphony with the plan; and appoint an independent fiduciary to manage the plan and distribute its assets to plan participants and beneficiaries.

Employers and workers can reach EBSA’s Philadelphia office at 215.861.5300 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement and health plans. Information is also available from the agency’s Web site at www.dol.gov/ebsa. In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. Integrated Health Services Inc.
Civil Action Number: 07-1689

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Archived News Release — Caution: Information may be out of date.