Opinion ID: 3010629
Heading Depth: 2
Heading Rank: 2

Heading: The Individual Plans

Text: The Department of Labor holds the view that if an employer adopts for its employees a program of benefits sponsored by a group or association that does not itself constitute an `employer' or an `employee organization,' such an employer or employee organization may have established a separate, single-employer (or single employee organization) employee benefit plan covered by Title I of ERISA. DOL Op. No. 96-25A, 1996 WL 634362, at . Western World argues that because the individual employers in this case established single-employer EWBPs, ERISA preempts the plaintiff class members' state law claims. Although plaintiff-appellees do not explicitly contest the DOL's position, they argue that it is irrelevant whether the individual plans constituted employee welfare benefit plans under ERISA. Appellees are incorrect. As we have previously indicated, if each employer's individual plan constituted an employee welfare benefit plan, thenthe class plaintiffs' claims, by operation of the doctrine of complete preemption, can only be ERISA claims. Gruber v. HBKW, No. 96-3277, slip op. at 17 (3d Cir. July 18, 1997). Turning to the merits, we conclude that the district erred in granting summary judgment. An employer . . . can establish an ERISA plan rather easily. Credit Managers Ass'n, 809 F.2d at 625. An ERISA plan exists if `from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits.'  Deibler, 973 F.2d at 209. We have stated, moreover, that the crucial factor in determining whether a plan has been established is whether the employer has expressed an intention to provide benefits on a regular and long-term basis. Id. Although the district court correctly observed that an employer's mere purchase of health insurance for its employees is not in and of itself proof that an ERISA plan 15 does exist, such a purchase does raise a genuine issue of material fact as to the existence of an ERISA plan. D. Ct. Op. at 6. A number of courts have held that an employer's payment of insurance premiums, standing alone, is substantial evidence of the existence of an ERISA plan. Robinson v. Linomaz, 58 F.3d 365, 368 (8th Cir. 1995) (citing cases from Fourth, Seventh, Ninth, and Eleventh Circuits) (emphasis added). Even the district court itself conceded that a purchase of insurance is evidence that a plan does exist. D. Ct. Op. at 6. The district court found, however, that Western World presented no proof that the individual employers even `purchased' health insurance. D. Ct. Op. at 5-6. Appellee plaintiff class members, likewise, argue that the individual employers did not purchase insurance, that LEEA was not an insurer, and that the employers did not pay premiums to an insurer. Rather, [t]hey made contributions to the LEEA trustee pursuant to the terms of the LEEA selffunded benefit trust. These contributions were pooled together in a trustee account and disbursed by the trustee to pay eligible medical expenses in accordance with the governing trust documents. Appellee's Br. at 15. This distinction is irrelevant, however. Since the crucial factor is whether the employer has expressed an intention to provide benefits on a regular and long-term basis, Deibler, 973 F.2d at 209, it does not matter whether the employer did so by purchasing insurance or by subscribing to a multi-employer trust. See also 29 U.S.C.S 1002 (employer establishes EWBP through the purchase of insurance or otherwise) (emphasis added). We conclude that Western World has raised a genuine issue of material fact regarding whether the individual employer-members of LEEA established employee welfare benefit plans for ERISA purposes. As Western World argues, there was evidence that the individual employer plans satisfied the Deibler test for establishing an ERISA plan because each employee was given a copy of the summary plan description which indicated what benefits were available, which persons were eligible for coverage, the source of financing, and the procedures for receiving benefits. Moreover, it is clear that the individual employers 16 made contributions to the LEEA Plan on behalf of their employees. These contributions alone constituted sufficient evidence of the existence of an ERISA plan to survive summary judgment. The Ninth Circuit has explained why summary judgment is improper in this situation: Even if an employer does no more than arrange for a group-type insurance program, it can establish an ERISA plan, unless it is a mere advertiser who makes no contributions on behalf of its employees. This possibility should be explored in an appropriate manner before summary judgment is employed. We must remember that the existence of an ERISA plan is a question of fact, to be answered in the light of all the surrounding circumstances from the point of view of a reasonable person. Credit Managers Ass'n, 809 F.2d at 625. In this case, the individual employers arranged for a group-type insurance program by participating in the LEEA Plan. They were not mere advertisers, but rather made contributions to the Plan on behalf of their employees. Therefore, we will reverse the district court's grant of summary judgment on this issue.