WEST VIRGINIA (WTRF)- The U.S. Department of Labor is suing a former West Virginia hospital CEO because he allegedly failed to forward contributions to the company’s healthcare plan.
This apparently led to the plan’s cancellation and left employees with benefits with many unpaid claims and without health coverage.
Charles Hatfield was the CEO of Williamson Memorial Hospital in Williamson, West Virginia when he withheld voluntary employee premium contributions and failed to forward them to the plan for payment of medical costs incurred by the employees, according to U.S. District Court for the Southern District of West Virginia.
“Fiduciaries have a legal obligation to operate employee benefit plans solely in the interest of participants and beneficiaries,” said Employee Benefits Security Administration (EBSA) Acting Regional Director Cristina O’Brien in Philadelphia. “We will hold them accountable whenever they fall short of that obligation.”
EBSA found that despite warnings to Hatfield from the plan administrator about nearly constant funding concerns and the danger of the plan’s termination, the former hospital CEO and fiduciary did not notify employees that their coverage was in jeopardy.
Hatfield also failed to alert employees that a significant amount of healthcare claims were unpaid and that the provider ultimately canceled their contract and stopped processing claims on Oct. 31, 2019. Unaware of the cancellation, employees continued to incur unpaid medical expenses until Dec. 11, 2019, when they were notified of the termination of their health plan.
“The U.S. Department of Labor is committed to protecting the employment benefits earned by America’s workers, and we will aggressively pursue and hold legally accountable those that fail to fulfill their fiduciary obligations and misuse Employee Retirement Income Security Act -protected health plan assets,” said Regional Solicitor Oscar L. Hampton III in Philadelphia.
The 76-bed hospital filed a bankruptcy petition on Oct. 21, 2019.