Insurance
Home›Insurance›Health Insurance›Albany launches fraud probe into deferred comp TPA aft…
Albany launches fraud probe into deferred comp TPA after benefit cards declined
Albany County has halted payments to Preferred Group Plans and expects new benefit cards for affected employees to be mailed within about a week.
Albany County, New York, officials have launched a fraud investigation into third-party administrator Preferred Group Plans after hundreds of county employees reported their pre-tax employee benefits cards were declined, with law enforcement partners across the state now involved, Insurance Business reports. The plan administrator managed a flexible spending arrangement that allowed public workers to set aside pre-tax dollars for eligible medical expenses, including co-pays and prescription drugs.
Albany County Executive Dan McCoy said the company appears to have shut down operations, prompting the county to halt all payments and terminate its contract. A replacement administrator is being sourced, and McCoy said new benefit cards are expected to be mailed to affected employees within approximately one week.
The investigation is not limited to Albany County. Albany County District Attorney Lee Kindlon said his office is coordinating with law enforcement statewide and that the potential victim pool extends to public employees at other municipalities and school districts across New York.
McCoy said the county intends to pursue legal action to recover funds withheld from employees. He also noted that public-sector benefit plans in New York operate outside ERISA, so affected government workers lack the federal enforcement framework available to private-sector plans, leaving outcomes dependent on state law and contractual protections.