NU Online News Service, April 20, 2004, 5:44 p.m. EDT – The U.S. Department of Labor has accused a Tennessee executive of mismanaging the Section 125 cafeteria health plan of a staff-leasing firm.[@@]
The firm, International Staff Management Inc., Memphis, Tenn., operated a multiple employer welfare arrangement, or MEWA, that failed and left participants with about $535,000 in unpaid health claims, the department says.
The suit, filed in the U.S. District Court in Memphis, accuses Don Starkey, the former president of ISM, of violating the Employee Retirement Income Security Act of 1974 by failing to take reasonable action to ensure that the plan had adequate reserves to pay claims, the Labor Department says in a notice announcing the suit.
The suit also alleges that Starkey did not ensure that the plan was covered by stop-loss insurance between May 1999 and the plan’s Sept. 30, 2001, termination date.