Is Your Insurance Plan Governed By ERISA?

How does an insurance lawyer know whether or not his insurance plan is governed by the Employee Retirement Income Security Act of 1974?

Here is a November 2022 opinion that discusses how to determine whether or not an insurance plan is governed by ERISA.  The opinion is from the Western District of Texas, Austin Division, and is styled, Robert Abraham v. Blue Cross And Blue Shield of Texas.

This case is in this Federal Court after being removed there by BCBS.  The lawsuit was originally filed in a Justice of the Peace Court.

A defendant may remove any civil action from state court to a district court of the United States that has original jurisdiction. 28 U.S.C. Section 1441(a).  The party seeking removal bears the burden of showing that federal jurisdiction exists and that removal was proper.  This showing must be made by a preponderance of the evidence.  The removal statute must be strictly construed, and any doubt about the propriety of removal must be resolved in favor of remand.

ERISA is one such federal statute with the “extraordinary preemptive power” to convert an ordinary state common law complaint into one stating a federal claim for purposes of the
wellpleaded complaint rule.  ERISA was enacted by Congress in relevant part to protect “the interests of participants in employee benefit plans and their beneficiaries” pursuant to 29 USC Section 1001(b)  ERISA applies to “any employee benefit plan . . . established or maintained” by “any employer engaged in commerce” pursuant to 29 USC Section 1003(a).

ERISA defines an employee welfare benefit plan as:

any plan, fund, or program which was heretofore or is hereafter
established or maintained by an employer or by an employee
organization, or by both, to the extent that such plan, fund, or
program was established or is maintained for the purpose of
providing for its participants or their beneficiaries, through the
purchase of insurance or otherwise . . . medical, surgical, or hospital
care or benefits, or benefits in the event of sickness, accident,
disability, death or unemployment.
  29 U.S.C Section 1002(1).

With the above in mind, the Court conducted an analysis of the plan language and the facts of the case and determined the Plan qualifies as an ERISA plan.

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