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Release Date: August 16, 2007
Release Number: 07-1208-ATL
Contact Name: Gloria Della/Richard Manning
Phone Number: 202.693.8664/202/693/4676
Atlanta – The U.S. Department of Labor has
obtained a consent judgment and order requiring the Mississippi State
Medical Association (MSMA), Ridgeland, Mississippi, to reimburse
participants and beneficiaries for unpaid health claims resulting from
the termination of the Mississippi State Medical Association Benefit
Plan and Trust. The welfare plan, established by MSMA in the 1980s to
provide health benefits to member physicians of MSMA, their employees
and beneficiaries, had more than 1,800 participants prior to its
termination on January 1, 2004.
“The mismanagement of this benefits plan left
workers and their families on the hook for unpaid medical bills,” said
U.S. Secretary of Labor Elaine L. Chao. “The department’s legal
action will ensure that the plan sponsor meets its responsibility by
paying the medical bills of these workers and their families.”
The judgment appoints Receivership Management Inc. as
an independent fiduciary to manage the distribution of plan assets.
Participants and beneficiaries may contact the company at 615.370.0051.
The judgment also removes the association as a fiduciary to the health
plan and protects participants from creditors’ claims by medical
providers resulting from the plan’s failure to pay providers for
services. Finally, MSMA is enjoined from providing health, disability or
other welfare benefits through any self-funded arrangement in the future
and may be liable for a civil money penalty.
The Labor Department’s lawsuit alleged that MSMA
knew the plan was underfunded, did not take steps to remedy the unsound
funding and failed to inform participants of the actuarially unsound
financial condition of the plan. As a result, the plan had more than $5
million in outstanding claims when it was terminated.
In addition, the department alleged that MSMA failed
to protect plan participants from claims by creditors that resulted from
the plan’s termination. Although MSMA advised the department that it
had requested its members and other medical care providers in
Mississippi refrain from referring plan participants to collection
agencies and consider waiving payment of claims, a survey of
participants performed at the department’s direction revealed that
participants continued to pay Mississippi medical care providers, had
been referred to collection agencies and had suffered damage to credit
as a result of the plan’s termination.
The judgment, entered in the U.S. District Court for
the Southern District of Mississippi, resulted from an investigation
conducted by the Atlanta Regional Office of the department’s Employee
Benefits Security Administration (EBSA). EBSA’s Web site includes
health benefits tips for small employers at www.dol.gov/ebsa/newsroom/fshlthinstips.html.
Employers and workers can reach EBSA’s Atlanta office at 404.302.3900
or toll-free at 1.866.444.EBSA (3272) for help with problems relating to
private sector retirement and health plans.
Chao v. Mississippi State Medical Association
Civil Action Number 3:07cv440 DPJ-JCS
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placing your request at 202.693.7828 or TTY 202.693.7755. The U.S.
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