🗞️ A Health Plan Administrator Misused Funds From Hundreds of Small Employers. A Federal Court Just Ordered Them to Pay.

For hundreds of small businesses across the country, a federally structured health arrangement was supposed to make coverage simpler and more affordable. Instead, according to the Department of Labor, it became a vehicle for self-dealing.

On April 28, 2026, the U.S. District Court for the Northern District of Illinois entered a consent order against Apex Management Group I Inc. and its owner, Jeffrey Bemoras, resolving a Department of Labor lawsuit that had been filed nearly two years earlier. The company had administered a Multiple Employer Welfare Arrangement, or MEWA, a federally regulated structure that allows small employers to pool resources for employee health coverage. In this case, the arrangement covered more than 700 separate employer-sponsored health plans and over 11,000 employees and beneficiaries.

The Labor Department's Employee Benefits Security Administration alleged that Apex and Bemoras exploited that structure for their own benefit. Rather than keeping each employer's plan assets separate, the company allegedly used funds from some plans to pay the claims of others, commingled assets across unrelated plans, and collected undisclosed, excessive compensation — all in violation of the Employee Retirement Income Security Act, the federal law governing private-sector benefit plans.

The court order requires Bemoras and Apex to pay $1.3 million into a settlement fund, with up to $445,000 more in additional assessed losses, plus civil penalties. An independent fiduciary was appointed to calculate total damages and distribute funds back to affected employers, plan sponsors, and participants. Apex and Bemoras are also prohibited from serving in any ERISA fiduciary or service-provider capacity unless they fully disclose all fees they receive, including those arranged for third parties. After the original complaint was filed in 2024, Apex reviewed and reduced its fees to the plans.

MEWAs have drawn federal scrutiny for decades. The Labor Department has long flagged mismanaged and fraudulent arrangements as a persistent concern, particularly because administrators can exploit the pooled structure to shift liabilities between plans or bury excessive compensation in opaque fee arrangements. The Apex case is a textbook example of those risks, and federal officials said they intend to keep pressing the issue.

"Employers and employees trusted Apex to manage their health plans by following the law," said EBSA Acting Regional Director Kelli Hammerl. "Apex broke that trust."

Key Points

• Apex Management Group I Inc. and owner Jeffrey Bemoras resolved DOL allegations of ERISA fiduciary duty violations in administering a MEWA serving more than 700 small employer health plans.
• Alleged violations included using one plan's assets to pay another plan's claims, commingling funds across unrelated plans, and charging undisclosed excessive fees.
• The consent order requires at least $1.3 million in restitution, up to $445,000 in additional assessed losses, and civil penalties.
• An independent fiduciary was appointed to calculate and distribute losses to affected employers, plan sponsors, and participants.
• Apex and Bemoras are barred from ERISA fiduciary or service-provider roles without full fee disclosure going forward.
• MEWAs are a widely used vehicle for small businesses to access group health coverage but carry well-documented risks of mismanagement and fraud.

Primary Source Author: U.S. Department of Labor, Employee Benefits Security Administration (EBSA)

Primary Source: Court Orders Health Plan Administrator, Owner to Pay More Than $1.3M to Restore Losses to Health Plans in Multiple Employer Welfare Arrangement

Primary Source Link: https://www.dol.gov/newsroom/releases/ebsa/ebsa20260429

Supplemental Links

• ERISA Overview, U.S. Department of Labor
• EBSA ERISA Enforcement, U.S. Department of Labor
• DOL Enforcement Alert: Protecting Employers from Mismanaged MEWAs
• MEWAs Under ERISA: A Guide to Federal and State Regulation (DOL PDF)
• EBSA Voluntary Fiduciary Correction Program
• Multiple Employer Welfare Arrangement Overview, Corporate Finance Institute