Dallas Fort Worth Insurance Lawyer BlogERISA lawyers will tell you that sometimes determining whether or not a plan is an ERISA plan or not can be confusing. The U.S. Southern District, Houston Division, issued an opinion that needs to be read on this issue. The style of the case is, Williams v. United Healthcare of Texas, Inc.
Williams had medical coverage under her employer plan for Retirees and Other Eligible Individuals (“the Plan”) with United Healthcare of Texas, Inc. and administered through UMR, Inc. Williams suffered from serious acid reflux pain and was diagnosed with esophageal diverticulum and hiatal hernia. Williams’s doctors determined that her condition would require surgery. On September 8, 2014, Williams entered the hospital and was released the following day. Five days later, Williams suffered complications from surgery and returned to the hospital. Williams remained under doctor’s care from September 13, 2014, to October 13, 2014. On September 17, 2014, and October 3, 2014, Williams received confirmation from Defendants that additional surgery was medically necessary. Williams was later transferred to the hospital. On November 3, 2014, Williams received correspondence from Defendants authorizing the additional medical procedures in Houston. Williams alleges that Defendants later denied her coverage under the Plan despite authorizing the treatment on multiple occasions.
Williams filed a lawsuit. Defendants removed the case to Federal Court based on Williams claims being pre-empted by ERISA.
Williams sought remand and argued that the Magistrate Judge applied the incorrect standard when deteriming whether the plan fell under ERISA. Williams asserts that the Magistrate Judge based her recommendation on whether or a reasonable person could find that an ERISA plan existed. Williams contends that the correct standard is whether a reasonable person could ascertain the intended benefits, beneficiaries, sources of financing, and procedures for receiving benefits. Williams maintains that a reasonable person could not ascertain the intended benefits, beneficiaries, sources of financing, and procedures for receiving benefits because the Defendants have not even produced the plan.
This Court found that the Magistrate applied the correct standard. To determine whether a particular plan qualifies as an “employee welfare benefit plan” under ERISA, the court asks “whether a plan: (1) exists; (2) falls within the safe-harbor provision established by the Department of Labor; and (3) satisfies the primary elements of an ERISA employee benefit plan–establishment or maintenance by an employer intending to benefit employees. If any part of the inquiry is answered in the negative, the submission is not an ERISA plan.” As Williams points out, “to determine whether a plan exists, a court must determine whether from the surrounding circumstances a reasonable person could ascertain the intended benefits, beneficiaries, sources of financing, and procedures for receiving benefits. This is the exact standard quoted and applied by the Magistrate Judge in reaching her conclusion that a plan exists. Further, the court agrees that a reasonable person could “ascertain the intended benefits, beneficiaries, sources of financing, and procedures for receiving benefits” based on the Summary Plan Description (“SPD”) provided by Defendants. The SPD provides a sufficient basis for the court to make this determination and to identify which plan applies and who administers the Plan. The Defendants were not required to produce the Plan itself.
This case goes on to discuss the decision in more depth and is worth reading for ERISA lawyers.
ERISA Or Not
