WILLIAMSON – The United States Department of has filed a lawsuit against former Williamson Memorial Hospital CEO and current Williamson Mayor Charlie Hatfield, according to a news release from the agency.
In the release, the agency said it has taken legal action after an investigation by its Employee Benefits Security Administration found Hatfield, who was a fiduciary of the company’s healthcare plan, allegedly failed to forward contributions to the plan leading to the plan’s cancellation and leaving employees with a significant number of unpaid claims and without healthcare coverage.
“Fiduciaries have a legal obligation to operate employee benefit plans solely in the interest of participants and beneficiaries,” said Cristina O’Brien, Employee Benefits Security Administration Acting Regional Director. “We will hold them accountable whenever they fall short of that obligation.”
Filed in U.S. District Court for the Southern District of West Virginia, the agency’s suit seeks to restore all losses incurred by former employees of Williamson Memorial Hospital as a result of fiduciary breaches by Hatfield. The hospital additionally filed a bankruptcy petition on Oct. 21, 2019, according to the release.
The court action follows an investigation that reportedly found – from at least July 1, 2018 through Oct. 31, 2019 – Williamson Memorial Hospital offered a self-insured health plan to provide medical benefits to full-time employees and their eligible dependents.
According to the release, the plan was funded by employee payroll deductions and employer contributions. Investigators determined that while acting as plan fiduciary, Hatfield reportedly withheld voluntary employee premium contributions and failed to forward them to the plan for payment of medical costs incurred by the employees.
The agency also reportedly learned 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 reportedly 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 finally 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 ERISA-protected health plan assets,” said Regional Solicitor Oscar L. Hampton III.
The violations of the Employee Retirement Income Security Act prompted the agency’s filing, which also seeks for Hatfield to “be removed permanently as fiduciary and barred from serving in a fiduciary capacity to any ERISA-covered employee benefit plan.”
The Employee Benefits Security Administration’s office in Washington, D.C. investigated the case, and the Philadelphia Regional Solicitor’s office is litigating the case.
