The Republican lawsuit targets reinsurance that helps insurance companies provide universal coverage without accounting for pre-existing conditions.
Aug. 16--The bankrupt remodeling chain owned by former U.S. Sen. Rudy Boschwitz and his family has resolved a federal suit by agreeing to repay employee contributions that were not properly used for their health, dental, life insurance and other plans.
Friday, company officials and the U.S. Department of Labor filed legal documents in U.S. District Court that detail their agreement.
Home Valu Interiors, begun by Boschwitz and his wife, Ellen, 50 years ago, shut down in 2010 during a depressed real estate market and lagging economy. The former senator was chairman of the company, long known by its original name of Plywood Minnesota, whose TV commercials became part of the state's popular culture. It sold home and remodeling products at retail store locations in Minnesota, Wisconsin, Iowa and Indiana, and also provided installation services.
The couple's son, Gerald Boschwitz, was the CEO of the Fridley-based chain, which had six stores when it shut down. Gerald and another relative, Thomas Boschwitz, vice president, are named in the suit, as is the business and the various employee plans.
A civil complaint filed in December by the U.S. Department of Labor alleged a fiduciary breach of trust by company officials regarding plans that were partly funded through employee contributions.
The company had been withholding contributions from employees' paychecks but held onto the money in its corporate accounts while failing to use it for ongoing health-plan and dental coverage, as well as for group life insurance, court papers say.
The legal action also involved a flexible-reimbursement plan that involved pretax contributions to cover eligible medical, dental and dependent-care expenses. Court papers say nearly $28,000 of employees' claims were not paid for the flex plan alone.
Under the agreement, the company is enjoined from future activity with the plans and has agreed to repay the contributions to employees.
Toward that end, on July 1, Gerald and Thomas Boschwitz deposited in their attorney's account $19,023 for the benefit of the health plan.
They also deposited $2,479 for the benefit of the dental plan; $814 for the life insurance plan; and $27,678 for the flex plan.
Within 45 days of Friday's consent order and judgment, Gerald and Thomas Boschwitz are to pay the money directly to plan participants. They've agreed to try to identify and locate each participant of the plans eligible to receive payment under agreement terms.
For the next 18 months, Gerald and Thomas Boschwitz also are removed from any positions they now hold as fiduciaries to the health, dental, life insurance and flex plans, except for the purpose of restoring and allocating the money owed to the participants, the court papers say.
Joy Powell -- 612-673-7750
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