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ERISA ployer or employee organization with the plan is limited to permitting the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues check-off s and to remitting them to the insurer, but without endorsing the plan itself; and (4) the employer or employee organization receives no consideration in connection with the program, other than reasonable compensation, excluding any profi t, for very limited administrative services. 29 C.F.R. § 2510.3-1(j). Reported decisions, however, show this exception to be diffi - cult to meet, especially where the employer involved itself even in the slightest in assisting employees in procuring the insurance. In this regard, an employer can “establish and maintain” an ERISA plan even if it never had any intent of doing do. See Anderson, 369 F.3d at 1263-64. Equally uncommon is having a benefi t scheme that qualifi es not as an ERISA plan, but as simply a “payroll practice,” which Department of Labor regulations exclude from ERISA’s application. 29 C.F.R. § 2510.3-1(b). Employee benefi ts of this nature include, naturally, compensation the employee receives for things like overtime and also vacation pay. Th ey also include, however, compensation paid to an employee on account of his or her inability to work due to disability or other medical reasons, as long as the compensation is paid out of the employer’s “general assets.” See generally Stern v. International Business Machines, Corp., 326 F.3d 1367 (11th Cir. 2003). Th e most successful means to escape ERISA’s clutches is based on the kind of entity the employer is. For instance, ERISA does not govern welfare benefi t plans established and maintained by governmental entities. 29 U.S.C. § 1003(b) (1); 1002(32). Neither does ERISA apply diction to both state and federal courts, ERISA cases may land in federal court if defendants want them there due to the existence of “federal question” jurisdiction. So, you may fi nd the fi rst notice you receive that your claim implicates ERISA is when you receive notice of removal from state court. Many lawyers are also often surprised that in ERISA litigation, courts often suspend the normal rules of civil procedure, especially in the realm of discovery. Under ERISA, a claimant typically must present all of his or her evidence to the insurance company before fi ling suit. Th e claimant may also be required to pursue internal appeals with the insurance company and “exhaust” administrative remedies before a court will entertain suit. Once suit is fi led, in the vast majority of cases the court will prohibit all merits related discovery, limit the scope of review to the materials before the claim administrator who denied the claim and review that claim decision under a highly deferential “abuse of discretion” standard. Th e court then will decide the case based on briefs or, in rare circumstances, upon conducting a bench trial; in ERISA there are no jury trials. Th e unusual degree of diffi culty inherent to most ERISA claims is not insurmountable if the attorney is knowledgeable about ERISA’s procedures. Th e subject of ERISA litigation strategies, however, is a more advanced topic that is beyond the scope of this article. Identifying an ERISAGoverned Plan An “employee welfare benefi t plan” under ERISA includes any insurance plan “established or maintained by an employer or by an employee organization, or by both….” 29 U.S.C. § 1002(1). Although 29 U.S.C. § 1102(a)(1) requires plans to be “established and maintained pursuant to a written instrument,” the Eleventh Circuit nevertheless has held that ERISA plan may exist even without a “formal, written plan.” Donovan v. Dillingham, 688 F.2d 1367, 1372 (11th Cir. 1982)(en banc) . In Dillingham, the Court held this “established and maintained” requirement can be satisfi ed “if from the surrounding circumstances a reasonable person can ascertain the intended benefi ts, a class of benefi ciaries, the source of fi nancing, and procedures for receiving benefi ts.” Id. at 1373. Th is same test is used in all other circuits. See Williams v. WCI Steel Co., Inc., 170 F.3d 598, 602 n.3 (6th Cir. 1999) (reporting that “every other circuit” has adopted the Dillingham test). Importantly, not all employee insurance plans are ERISA-governed plans. Th e Department of Labor has clarifi ed through the issuance of regulations that some policies made available through work are not ERISA plans because they fall under ERISA’s “safe harbor” provisions. See 29 C.F.R. § 2510.3- 1(j); see also, e.g., Anderson v. Unum Provident Corp., 369 F.3d 1257, 1262 (11th Cir. 2004). Th is “safe harbor” exception applies if: (1) the employer or employee organization does not make any contributions to the plan; (2) the employee’s participation in the plan is voluntary; (3) the involvement of the em- Birmingham Bar Bulletin/ Spring 2013 15


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