Skip to main content

DOL Investigations - Sample Letter to Clients When DOL Says It's Coming to Audit You

Keep this page for reference when you need it! FYI to TPAs: In the "old days", TPAs who were audited or "investigated" by the DOL often ended up losing one or more clients who get spooked because they assumed the TPA must have been doing something illegal. SPBA members attending SPBA Spring Meetings interacting with DOL officials has made it a much friendlier process.

The optional sample letter below is to give your clients an upbeat "heads up" and turn a DOL "investigation" into a PR plus for you. This sample letter makes you seem like hero-of-the-year by explaining to the clients what's going on when/if DOL says its coming to pay a visit. You can decide whether to send it to all clients in advance or just have it ready to fax if the DOL indicates it is going to talk to one or more of your clients.

Dear Client, We are happy to inform you that XYZ TPA (or the specific client plan) has been selected for a random review as part of the Department of Labor's oversight of ERISA employee benefit plans and service providers. As you know, we are very proud of the extremely high standards of consumer protection ERISA demands of us and you. Our firm, with our national trade association, has been a leader working with all government agencies to assure review and compliance with all requirements...even when requirements of one program conflict with the demands of another agency. Thus, we are pleased to have been chosen as part of the review process. Like any audit process, they may wish to contact you as a routine cross-check of information. We urge you to cooperate. Let me explain some of the procedures and vocabulary.

First of all, they will probably use the word "investigation" or the person may identify himself as an "investigator". Do NOT be alarmed. "Investigation" is the standard word used for any kind of review or oversight. It does NOT mean anyone has done anything wrong. If they should ask to visit you, don't be alarmed if they flash a badge and say something about "...anything you say may be used in civil or criminal charges..." It is part of the standard introduction some use. Again, it does NOT mean you or anyone has done anything wrong, and there is no need for legal counsel or such. Also don't be alarmed if the investigator seems unfamiliar with employee benefits, innovations in health coverage funding, and general business operations.

There is considerable turnover of investigators, with many new ones each year. Unfortunately, in very rare cases, we have heard that a few model their behavior on gangster movies, asking about "bribes and kickbacks". (What they misunderstand are normal business commissions & fees we've disclosed to you.)

I have probably prepared you for the worst. However, overall, the Department of Labor enforcement process has been smooth and friendly, and serves a good purpose. We are happy to be involved in this project. Feel free to call me if you have any questions. Sincerely, (Your loving & loyal TPA)