Fiduciary to Syncor LLC Group Health Plan agrees to repay funds that were improperly withheld from employees

Date of action: Dec. 8, 2015

Type of action: Complaint, Consent Judgment and Order

Names of defendants: William W. Bibb and Syncor LLC, doing business as Specprint Group Health Plan

Allegations: Syncor, of Mount Juliet, Tennessee sponsored a group health plan for its employees. William W. Bibb was Syncor’s owner and the fiduciary to the group health plan. The plan was partially funded by participant contributions. In 2011, Bibb and Syncor failed to refund $8,892 in health insurance premiums deducted from participant paychecks to plan participants, as required, after going out of business in late 2011. Before going out of business, Syncor began to have financial troubles and failed to timely pay its insurance premium, resulting in the termination of the group health plan. After terminating the plan, Blue Cross refunded the unused, late-paid premium to Syncor. Syncor failed to refund the unused portion of the premiums paid by the employees prior to the plan’s termination and used the refund for its own purposes.

Resolution: The department filed a complaint on Dec. 4, 2015, seeking to restore the plan’s losses, offset any accounts held by the fiduciaries, enjoin the defendants from acting as a fiduciary, and appoint a successor fiduciary for the plan. On Dec. 8, 2015, the court approved a consent judgment in which Bibb agreed that he should be removed as the plan’s fiduciary, that he should be enjoined from acting as a fiduciary in the future, that the employees’ unreimbursed contributions should be repaid, and that AMI Benefits of Youngstown, Ohio, should be appointed as the plan’s successor fiduciary.

Prior to the civil court filings, the department filed a proof of claim in the amount of $8,892 with the U.S. Bankruptcy Court, Middle District of Tennessee, in Bibb’s personal Chapter 7 bankruptcy case (3:15-bk-03375). On Sept. 15, 2015, the bankruptcy judge approved an agreed judgment in which Bibb agreed that the $8,892 debt was non-dischargeable in bankruptcy, that he would repay the amount owed to the employees, and, in addition, would pay the successor fiduciary to collect the funds repaid and reimburse them to the employees.

Courts: U.S. District Court for the Middle District of Tennessee, Nashville Division

Docket Numbers: 3:15-cv-01437V