January 16, 2015
The Department of Labor recently secured $2 million in restitution payments from a self-insured employer for violating the Affordable Care Act's preventive services requirement after its third party administrator under an "administrative services only" contract denied such claims from employees. The enforcement action raises serious questions about what fiduciary responsibility third parties may have when they administer health care benefits. The employer voluntarily restored $2 million to 4,564 plan participants after reprocessing all adult preventive care claims, notifying participants to submit all claims that were previously denied by the TPA. Under ERISA, as amended by the ACA, annual limits on health benefits are prohibited. The case vividly illustrates DOL's intent to aggressively prosecute ACA violations against employers, even violations that result from noncompliance by the plan's TPA. Assistant Secretary for Employee Benefits Security Phyllis Borzi said she was "pleased" the employer took "steps to resolve the issue" because it is important for employees to be "able to fully take advantage of preventive care services."