THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, October 4, 1996 TAG: 9610040539
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: 36 lines
The U.S. Department of Labor on Thursday sued a Norfolk-based health-care plan, alleging that federal contract workers were overcharged at facilities such as Langley Air Force Base and NASA's Wallop's Island facility.
The plan was sponsored by District Lodge 74 of the International Association of Machinists and Aerospace Workers.
Defendants in the lawsuit are former plan administrator Charles Lascola and his company Group Benefit Resources Inc., along with current and former trustees Ronald Ault, Robert Hewes, Russell Hurdle, Elmo Lawrence, Stephen Miller, Glen Rotella, Willis A. Shearin and Paul Wicker.
The lawsuit alleges that from mid-1989 through mid-1992 Lascola and Group Benefit Resources increased the amount of money the plan spent on insurance. Instead of obtaining one stop-loss policy for the plan, Lascola bought separate stop-loss policies for each employer, the lawsuit alleges. A stop-loss policy is a type of insurance used to protect the plan from excessive losses over a specified amount.
Lascola and his company received commissions for placing the stop-loss policies, the lawsuit says, so by overinsuring the plan they received more money.
Attorneys for the defendants and the Labor Department were unavailable for comment.
The lawsuit was filed under the Employee Retirement Income Security Act, or ERISA. Under that 1974 law, the trustees are responsible because they turned the plan over to Lascola and he committed the violations, the lawsuit says.
The trustees hired Lascola because they knew nothing about running a health-care benefit plan, the lawsuit says, but they turned over their responsibilities to Lascola to the extent that they were unaware of many policy decisions and ``merely rubber-stamped'' others. by CNB