Tale of a DOL Investigation.

• Author: PHILLIPS, JOHN
• Position: United States. Department of Labor - Brief Article

When an "official business" letter arrived from the U.S. Department of Labor for CaICPA's Group Insurance Trust in August 1997, we had no reason to suspect that it would represent the opening salvo of a more than three-year-long investigation. Its target, GIT, has been in place since 1959, providing group medical, dental, vision, disability and life plans to CalCPA member-owned public accounting firms, and had always diligently maintained proper business practices.

In March 1997, GIT reconfigured itself to become a Multiple Employer Welfare Arrangement to operate within the various California rules and regulations governing association-sponsored health-care plans covering employers with less than 50 employees. When the California Department of Insurance licensed GIT to offer medical plans to members in public practice, we proceeded to issue the California CPA ProtectPlus plans that a significant percentage of CalCPA member-owned firms now use. As a welfare plan provider, GIT also is governed under the provisions of the 1974 federal legislation known as ERISA, which the DOL oversees.

ONLY THE BEGINNING

The DOL's letter didn't specify what they wanted to investigate. The letter asked for numerous forms and documents, including plan documents, summary plan descriptions, tax returns, annual reports, audited financial statements, board and committee minutes, fidelity bonds, service provider agreements and more. A phone call to the assigned investigator only elicited the response that they could not tell us what they were specifically looking for or why we were selected for review. In September 1997, we sent the DOL a large package of materials.

A year passed, and in October 1998, a new investigator called to say that he needed additional documents. Over the next two years we sent the DOL packages that included a seven-year history of our individual trustees, cost-reimbursement agreements, supporting documents for all payments made to CalCPA, various marketing pieces and contracts, actuarial reports, job descriptions for all of our staff, staff time records, payroll records, trust agreements, health plan contracts, premium rate schedules, firm enrollment records, plan-related correspondence, rental agreements, descriptive brochures of GIT, CPA Focus newsletters, our Y2K plan and more.

Also, during this period the DOL extensively interviewed current and prior staff members, board of trustees members, key CalCPA officers and our key vendors.

In...