The U.S. Department of Labor has initiated legal action against two Puerto Rico-based service providers and their executives, alleging excessive fees and self-dealing related to employer-sponsored health benefit plans. The complaint, filed on November 5, 2024, targets Suffolk Administrative Services LLC and Providence Insurance Co., both located in San Juan, along with executives Alexander Renfro, William Bryan, and Arjan Zieger.

According to the department's Employee Benefits Security Administration (EBSA), since at least 2016, these companies and their current and former executives have been involved in marketing, selling, and servicing health benefit plans while collecting significant fees for themselves. These actions are said to be in violation of the Employee Retirement Income Security Act.

The complaint accuses Suffolk Administrative Services and its affiliates of approving millions in unreasonable fees for themselves and other service providers. EBSA's investigation revealed that more than half of the money paid by the plans was directed towards administrative costs rather than health claims.

Klaus Placke, EBSA Regional Director in San Francisco, stated: "The U.S. Department of Labor acted to stop this excessive fee arrangement and recover as much as $40 million in unjust profits on behalf of plan participants. We want to ensure these plans are administered properly and that their participants have access to affordable healthcare benefits."

This case is being heard in the U.S. District Court of Puerto Rico under docket number 3:24-cv-01512. It is important to note that this complaint does not address plans established by "limited partnerships," which are subject to separate litigation in an ongoing case known as Data Marketing Partnership LP v. U.S. Department of Labor.

For further information about EBSA's activities, interested parties can learn more through their official channels.