Date of action: Dec. 12, 2024Type of action: Consent judgmentEmployers: MSES Consultants Inc., Lawrence RineAllegations: The U.S. Department of Labor filed suit against MSES Consultants Inc. and owner Lawrence Rine after the department’s Employee Benefits Security Administration found fiduciary breaches related to the MSES Consultants Inc. Employee Health Plan. Investigators found the parties failed to pay more than $187,000 in adjudicated health claims, resulting in harm to the plan’s participants and beneficiaries, who were entitled to benefits under the plan as MSES employees. The engineering consulting company is now defunct.Resolution: The department negotiated and entered a consent judgment that provided all its sought relief in the lawsuit. Among other things, it requires the company and Rine to pay for an independent fiduciary to investigate unpaid plan claims and remit money to pay any remaining money due for those claims. The consent judgment also removes the company and Rine as fiduciaries and permanently forbids them from future ERISA violations or from holding authority over ERISA plan assets.Quote: “Fiduciaries are required by law to always act in the best interest of plan participants and beneficiaries. When they fall short of this obligation, the U.S. Department of Labor will use all available tools to hold them legally accountable,” said Regional Solicitor of Labor Samantha Thomas in Philadelphia. Court: U.S. District Court for the Northern District of West Virginia in Clarksburg.Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Learn more about EBSA.Docket Number: 1:23-cv-00055-TSK-MJA
Brief
On Dec. 12, 2024, the U.S. Department of Labor obtained a consent judgment against MSES Consultants Inc. and owner Lawrence Rine for fiduciary breaches related to their Employee Health Plan. The department found that the company failed to pay over $187,000 in adjudicated health claims, harming plan participants and beneficiaries.
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Purpose
The U.S. Department of Labor filed a lawsuit against MSES Consultants Inc. and its owner, Lawrence Rine, on December 12, 2024, alleging fiduciary breaches related to the MSES Consultants Inc. Employee Health Plan. The investigation found that the parties failed to pay over $187,000 in adjudicated health claims, resulting in harm to participants and beneficiaries.
Effects on Industry
The consent judgment entered by the U.S. Department of Labor has significant implications for the employee benefits industry. It highlights the importance of fiduciary responsibility and the consequences of failing to act in the best interest of plan participants and beneficiaries. The removal of MSES Consultants Inc. and Lawrence Rine as fiduciaries and their permanent prohibition from future ERISA violations serves as a deterrent to other employers who may be tempted to ignore their fiduciary duties.
Relevant Stakeholders
The affected stakeholders include:
- Employees of MSES Consultants Inc., who were entitled to benefits under the plan but did not receive them due to the company’s and Rine’s failure to pay adjudicated health claims.
- The U.S. Department of Labor, which took action against MSES Consultants Inc. and Lawrence Rine for their fiduciary breaches.
- Other employers in the employee benefits industry, who must take note of the consequences of failing to meet their fiduciary responsibilities.
Next Steps
To comply with or respond to this update, employers must:
- Review their own employee benefit plans to ensure they are meeting their fiduciary responsibilities.
- Verify that all claims are being properly adjudicated and paid in a timely manner.
- Consider hiring an independent fiduciary to investigate unpaid plan claims and remit money to pay any remaining claims.
Any Other Relevant Information
The consent judgment entered by the U.S. Department of Labor also includes provisions for an independent fiduciary to be appointed to investigate unpaid plan claims and remit money to pay any remaining claims. This demonstrates the department’s commitment to holding employers accountable for their actions and ensuring that plan participants and beneficiaries receive the benefits they are entitled to.
