An Illinois federal district court judge has approved an agreement for Jeffrey Bemoras and Apex Management Group I Inc. to pay $1.3 million into a settlement fund in a suit filed by the U.S. Department of Labor (DOL). The DOL has accused Bemoras and Apex, which operated a multiple employer welfare arrangement (MEWA), of breaching their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by commingling the assets of different plans and receiving excessive compensation.
According to a regional director for the DOL’s Employee Benefits Security Administration (EBSA), DOL officials allege that Apex inappropriately used funds designated for some employers in the MEWA to pay the claims of other employers. Daniel Aronowitz, EBSA’s administrator, has recently stated that the DOL intends to formally investigate any plan fiduciary who has been disloyal to plan participants, which is at odds with a previous EBSA vow to focus on educating employers rather than suing them.
Apex’s MEWA provided minimum essential coverage or solid major medical coverage under the Affordable Care Act (ACA) for about 11,000 people. The DOL filed its initial complaint against Apex in May 2024. Apex had asked that various DOL claims be dismissed on the grounds that neither Bemoras nor Apex constituted a health plan or acted as fiduciaries. Apex also argued that some commingling of funds occurred due to third-party administrators’ actions without their knowledge or approval.
The $1.3 million settlement fund is in addition to the civil penalties and $445,000 that Bemoras and Apex previously agreed to pay. Settlement funds will go to employers and plan participants who used the medical coverage.
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