EBSA on employers placing profit over fiduciary duty

“Employers placing profit over upholding their legal fiduciary responsibilities when managing health benefit plans will not be tolerated... [t]he Employee Benefits Security Administration remains committed to ensuring that those who knowingly break the law are held fully accountable.”
— Regional Director Ruben R. Chapa, EBSA

Last week, a New Jersey nursing home CEO pleaded guilty to healthcare fraud and tax conspiracy.

What did Kevin Breslin and his company do wrong?

A lot.
• Diverted Medicare and Medicaid funds away from patient care.
• Failed to pay vendors, leaving facilities underfunded.
• Ignored federal regulations designed to protect residents.

But here’s the part that should concern every employer and benefits professional:

He withheld employee contributions for health and retirement plans—and didn’t send them to the proper administrators.

That’s not just mismanagement. It’s a clear fiduciary failure and a massive breach of trust.

When employers deduct money from employees’ paychecks for benefits, that money isn’t theirs. Under TR 92-01, those funds must be remitted very quickly, otherwise they become plan assets.

Every so often, an employer goes to jail over this. If there’s one rule to take away, it’s this:

Never. Mess. With. The. Money.

DOJ Press Release here: https://lnkd.in/exdaQNMZ