U.S. Department of Labor Secretary Thomas Perez is reportedly investigating PartnerSource, a company that provides “opt-out” plans to large employers in Texas and Oklahoma. Calling opt-out a “disturbing trend” and saying that the system exists primarily to reduce benefits, NPR reports that Secretary Perez has been in contact with Sherrod Brown, D-Ohio, confirming the probe. Texas and Oklahoma have a total of about 1.5 million workers covered by opt-out, which has faced several constitutional challenges in Oklahoma where it was implemented several years ago as part of a system overhaul.
Secretary Perez urged caution in an interview with NPR, as his agency has limited authority to force employers to match state-run benefit levels. However, in both Oklahoma and Texas, PartnerSource and employers cite the fact that opt-out plans are governed by the federal Employee Retirement Income Security Act, or ERISA. ERISA is regulated by the Labor Department, and the agency’s investigation focuses on whether employers are violating ERISA with plans that restrict access to benefits. Secretary Perez reportedly referenced plans that require mandatory arbitration for benefits disputes as an example.
Read more via NPR here.