Whether an insurance plan falls under ERISA (Employee Retirement Income Security Act) or not, is a question routinely asked. However, it is not a question easily answered. A Southern District, Galveston Division opinion helps. The opinion is styled, Kirstin Walker v. Regence Blue Cross Blue Shield of Texas.
The is a summary judgment opinion dealing with the issue of whether or not the Blue Cross is an ERISA plan.
ERISA applies to any employee benefit plan if it is established or maintained (1) by an employer …; or (2) by an employee organization …; or (3) by both an employer and an employee organization according to 29 U.S.C 1003(a). Section 1102 defines an employee welfare benefit plan as any plan, fund, or program established or maintained by an employer or by an employee organization, or by both, for the purpose of providing its participants or their beneficiaries with certain benefits through the purchase of insurance or otherwise.
To determine whether an ERISA plan exists a three factor test is utilized. The court must determine whether (1) the plan exists; (2) the plan falls within the safe-harbor provision established by the Department of Labor; and (3) the employer established or maintained the plan with the intent to benefit employees.
In terms of the first factor, Blue Cross has offered ample evidence of the existence of a plan.
Additionally, Blue Cross had offered evidence which satisfies the third factor of the test. Specifically, the evidence reflects the plan was established for the intent of benefitting employees.
The only dispute in this case centers on whether the Plan falls within the safe harbor provision, in which case it would be exempt from ERISA. In order to fall within the confines of the safe harbor provision, all of the following criteria must be met: (1) the employer does not contribute to the plan; (2) participation is voluntary; (3) the employer’s role is limited to collecting premiums and remitting them to the insurer; and (4) the employer receives no profit from the plan.
The 5th Circuit has ruled that all the criteria must be met to fall under the safe harbor provision.