Bloomberg said that seven former and current employees, including a retired doctor, of Novant Health Inc has sued their employer over allegations that the nonprofit hospital operator charged excessive fees amounting to millions of dollars in the latter's employee retirement plan. According to the complaint filed at the Greensboro, North Carolina federal court, the investment options of the retirement plan include around 20 mutual plans. Among the plaintiffs in the lawsuit include the former chief of staff and doctor Karolyn Kruger at Novant's Thomasville Medical Center in North Carolina.
According to the company's website, the Winston-Salem, North Carolina-based healthcare provider operates 14 medical centers along with various facilities like clinics, outpatient surgery centers, medical plazas, rehabilitation programs, imaging centers and community health programs. The company's services aim to cater the North Carolina, Virginia, South Carolina and Georgia markets.
Legal representatives for all the plaintiffs said in the complaint, "Given the massive bargaining power of a plan at or near $1 billion in total plan assets, a ‘large' plan in industry terms, prudent fiduciaries consider far lower cost investments that are accessible to institutional investors."
The complaint alleges that all 25,000 employees of Novant had been automatically enrolled by the company in the retirement plan beginning 2009. The plaintiffs claimed that the assets of the plan has ballooned from $612 million in 2008 to double the amount at $1.42 billion.
Bloomberg said the plaintiffs are looking to gain an order from the court that will remove the committee assigned by Novant to oversee the retirement plan and install an independent administrator. Moreover the plaintiffs are also seeking unspecified restitution, damages, interests and have also asked the court for the defendants to cover the legal costs they have spent for the lawsuit. The plaintiffs are looking to obtain class-action status for the complaint as well, Bloomberg said.
