Filed: May 20, 1992
Latest Update: Mar. 02, 2020
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT 91-1469 MD PHYSICIANS & ASSOCIATES, INC., Plaintiff-Appellant, versus STATE BOARD OF INSURANCE, A Body Politic of the State of Texas, ET AL., Defendants-Appellees. Appeal from the United States District Court for the Northern District of Texas Before GOLDBERG, JOLLY, and WEINER, Circuit Judges. GOLDBERG, Circuit Judge: This case involves the definition of an "employee welfare benefit plan" found in the Employee Retirement Security Act o
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT 91-1469 MD PHYSICIANS & ASSOCIATES, INC., Plaintiff-Appellant, versus STATE BOARD OF INSURANCE, A Body Politic of the State of Texas, ET AL., Defendants-Appellees. Appeal from the United States District Court for the Northern District of Texas Before GOLDBERG, JOLLY, and WEINER, Circuit Judges. GOLDBERG, Circuit Judge: This case involves the definition of an "employee welfare benefit plan" found in the Employee Retirement Security Act of..
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
91-1469
MD PHYSICIANS & ASSOCIATES, INC.,
Plaintiff-Appellant,
versus
STATE BOARD OF INSURANCE,
A Body Politic of the State
of Texas, ET AL.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Texas
Before GOLDBERG, JOLLY, and WEINER, Circuit Judges.
GOLDBERG, Circuit Judge:
This case involves the definition of an "employee welfare
benefit plan" found in the Employee Retirement Security Act of
1974. We confess that the parties seemed "bewitched, bothered and
bewildered"1 in attempting to apply the statute to the facts of
this case at oral argument -- the outset of our journey through
ERISA. The statutory map, along with statements of legislative
1
Title of song by Pal Joey (1940).
purpose by Congress, the map-maker, enables us to answer the issue
presented: Whether the MDPhysicians & Associates, Inc. Employee
Benefit Plan constituted an "employee welfare benefit plan" within
the meaning of ERISA. We hold that the plan is not an "employee
welfare benefit plan" and affirm the district court's dismissal for
lack of subject matter jurisdiction.
I.
MDPhysicians, Inc. ("MDPhysicians," also known as MDPhysicians
of Amarillo, Inc.) is an independent physician practice association
of over 130 doctors who work in the Amarillo, Texas area.
MDPhysicians, a Texas corporation, contracts its professional
services to health care providers. In 1988, MDPhysicians formed an
entity called MDPhysicians & Associates, Inc. ("MDP") and created
the MDPhysicians and Associates, Inc. Employee Benefit Plan ("MDP
Plan" or "Plan"). MDP adopted the Plan, served as Plan
Administrator, and funded the Plan through a trust established by
itself and three physicians. The same three doctors who control
MDPhysicians, the practice association, also control the MDP entity
and the MDP Plan -- not only are these three doctors officers of
MDP, but they also serve as trustees of the Plan. MDP entered into
a service agreement with a third-party administrator to provide
administrative claims services. The Plan is self-funded, which
simply means that it is not fully insured. Rather, it purchased
stop-loss insurance to protect the Plan only from losses exceeding
2
a certain amount per beneficiary.
The MDP Plan operated in the following manner. Through the
broadcast and print media, MDP advertised the Plan to employers
located in the Texas panhandle. Over 100 disparate employers
("Subscribing Employers") subscribed to the MDP Plan by executing
an Application and Subscription Agreement, paying a one-time fee,
and paying a small, monthly, per-employee fee. MDP administered
the Plan under the Trust Agreement and Summary Plan Description to
provide medical and health benefits to the Subscribing Employers'
employees and the employees' dependents (collectively, the
"Employees"). An Employee who needed medical or health care could
choose to obtain treatment from a network medical service provider
and pay only 10% of the medical expense or seek treatment from a
non-network provider and pay 20% of the charge. Under the Plan,
then, the Employees had a financial incentive to pursue treatment
from a network medical service provider, which included physicians
in the physicians practice association that formed MDP.
MDP sued the Texas State Board of Insurance ("Board"), seeking
a declaratory judgment that the Board's attempts to regulate MDP
and the MDP Plan were inconsistent with the Employee Retirement
Security Act of 1974, 29 U.S.C. §§ 1001 - 1461 ("ERISA"), and a
permanent injunction restraining the Board from regulating MDP and
the MDP Plan. The Secretary of the United States Department of
Labor ("DOL"), as amicus curiae, filed a brief in the district
court and issued several opinions concerning the MDP Plan's status
under ERISA and its susceptibility to regulation by the Board. DOL
3
Op. No. 90-18a (July 2, 1990); DOL Op. No. 90-10a (May 3, 1990).
The district court concluded that the MDP Plan did not
constitute an "employee welfare benefit plan" under ERISA, and, in
dicta, noted that even if it did, ERISA did not preempt the
application of a Texas law requiring a certificate of authority as
a Texas insurance company because the regulation was not
inconsistent with Title I of ERISA. After finding that the Plan
was not an "employee welfare benefit plan" under ERISA, the court
granted the Board's motion to dismiss for lack of subject matter
jurisdiction under Federal Rule of Civil Procedure 12(b)(1).
MDPhysicians & Assocs. Inc. v. Wrotenbery, 762 F. Supp. 695 (N.D.
Tex. 1991).
Appellant MDP argues that the federal district court had
jurisdiction over this case because the MDP Plan qualified as an
"employee welfare benefit plan" within the meaning of ERISA. If
the MDP Plan did not constitute an "employee welfare benefit plan,"
however, the district court properly dismissed the case for lack of
subject matter jurisdiction. See Hansen v. Continental Ins. Co.,
940 F.2d 971, 976 (5th Cir. 1991). We conclude that the Plan is
not an "employee welfare benefit plan" under ERISA and affirm the
district court.
II.
Since a motion to dismiss for lack of subject matter
jurisdiction under Federal Rule of Civil Procedure 12(b)(1)
concerns the court's "very power to hear the case . . . the trial
4
court is free to weigh the evidence and satisfy itself as to the
existence of its power to hear the case." Williamson v. Tucker,
645 F.2d 404, 413 (5th Cir.) (quoting Mortensen v. First Fed.
Sav.and Loan Ass'n,
549 F.2d 884, 891 (3rd Cir. 1977)), cert.
denied,
102 S. Ct. 396 (1981). The district court dismissed the
case for lack of subject matter jurisdiction based on the
complaint, supplemented by undisputed facts and the court's
resolution of disputed facts.2 The court relied in part "on its
own determination of disputed factual issues" in resolving the
challenge to its jurisdiction; therefore, "we must then review
those findings as we would any other district court resolution of
factual disputes -- we must accept the district court's findings
unless they are 'clearly erroneous.'"
Id. (citations omitted).
A. The ERISA Map
Before we embark on our journey, we comment that our task as
judicial travellers is confined to following the ERISA map charted
by the Congressional cartographers. We travel to determine whether
the landmark called "MDP Plan" is located within that jurisdiction
marked "employee welfare benefit plan." Our logical path is dotted
with definitional markers, which we discuss in the order in which
2
Under Williamson, a court considering a motion to
dismiss under 12(b)(1) can consider either: 1) the complaint
alone; 2) the complaint supplemented by undisputed facts
evidenced in the record; or, as in this case, 3) the complaint
supplemented by undisputed facts plus the court's resolution of
disputed facts. Williamson, 645 F.2d at 413.
5
we encountered them.
The parties do not disagree that the MDP Plan is a "multiple
employer welfare arrangement" as defined by ERISA, commonly
referred to as a "MEWA." See DOL Op. No. 90-10A (May 3, 1990).
The term "MEWA" includes all arrangements "established or
maintained for the purpose of offering or providing" certain
benefits "to the employees of two or more employers . . . or to
their beneficiaries." 29 U.S.C. § 1002(40)(A) (defining MEWA and
listing exceptions irrelevant to this appeal). But ERISA does not
automatically govern all MEWAs. Congress's notion of a MEWA is
broader than its concept of an "employee welfare benefit plan"
("EWBP"). The statutory definition of a MEWA encompasses both
EWBPs and arrangements "other than . . . employee welfare benefit
plan[s]." Id. Some MEWAs locate themselves in the jurisdiction
known as "employee welfare benefit plans," while others remain
outside the borders of ERISA.
The parties disagree whether the MDP Plan, admittedly a MEWA,
constitutes an EWBP under ERISA. Not only does resolution of the
ERISA coverage issue decide whether this case belongs in federal
court, but, if resolved against ERISA coverage, determines whether
the Texas State Board of Insurance can regulate MDP and the MDP
Plan. We detour from our course to explain this phenomena. Only
MEWAs that also constitute statutory EWBPs are governed by and
regulated under federal law -- ERISA. These EWBP-MEWAs qualify for
the limited preemption from state insurance regulations found in
ERISA. 29 U.S.C. § 1144(b)(6)(A)(ii) (preempting application of
6
state insurance regulations "inconsistent with" Title 1 of ERISA).3
Non-EWBP MEWAs, however, are subject to state regulation. See
Wisconsin Educ. Ass'n Ins. Trust v. Iowa State Bd., 804 F.2d 1059,
1061 (8th Cir. 1986). We thus make no diversion to the path marked
"possible ERISA preemption of state law" unless we first decide
that the MDP Plan constitutes an EWBP-MEWA within the meaning of
ERISA.
The driving force of our journey remains whether this lawsuit
belonged in federal court or whether the district court properly
dismissed it for lack of subject matter jurisdiction. ERISA
extends federal jurisdiction to cases brought by a "fiduciary" of
an "employee welfare benefit plan" to enforce the provisions of
ERISA. 29 U.S.C. 1132(a)(3). We assume, without deciding, that
MDP qualifies as a "fiduciary" under ERISA with respect to the MDP
Plan.4 See 29 U.S.C. § 1002(21)(A). We must discover, then,
3
Congress amended ERISA in 1983 and added the definition
of a MEWA, 29 U.S.C. § 1002(40), and 29 U.S.C. § 1144(6)(A)(ii),
which provides that
[n]otwithstanding any other provision in this
section--(ii) in the case of any other employee welfare
benefit plan which is a multiple employer welfare
arrangement, in addition to this subchapter, any law of
any State which regulates insurance may apply to the
extent not inconsistent with the preceding sections of
this subchapter.
If the MDP Plan qualified as an EWBP, subsection (6)(A)(ii) would
apply because the MDP Plan is not fully insured. Subsection
(6)(A)(i) is directed to "employee benefit plan"-MEWAs that are
fully insured.
4
We emphasize that we merely decide the narrow issue
presented on appeal: Whether the multiple employer welfare
arrangement, the MDP Plan, constitutes an EWBP governed by ERISA.
We do not decide whether any of the Subscribing Employers
7
whether the multiple employer welfare arrangement, the MDPlan,
constitutes an "employee welfare benefit plan" under ERISA, giving
the district court original jurisdiction over the action as one
"arising under the . . . laws of the United States." 28 U.S.C. §
1331. Whether the MDPlan constituted an "employee welfare benefit
plan" is a question of fact. Hansen v. Continental Ins. Co., 940
F.2d 971, 976 (5th Cir. 1991) (citing Gahn v. Allstate Life Ins.
Co.,
926 F.2d 1449, 1451 (5th Cir. 1991)).
We continue to traverse the lexicographic topography charted
by Congress. 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. 29 U.S.C. § 1003(a).5 ERISA defines an
directly established or maintained "single employer" EWBPs
covered by ERISA -- that is, "whether each employer who
subscribed to the [MDP Plan] thereby established its own
individual ERISA plan." Credit Managers Ass'n v. Kennesaw Life
and Accident Ins. Co., 809 F.2d 617, 625 (9th Cir. 1987)
(emphasis added); see International Resources, Inc. v. New York
Life Ins. Co.,
950 F.2d 294, 297-98 (6th Cir. 1991); Hansen v.
Continental Ins. Co.,
940 F.2d 971, 977-78 (5th Cir. 1991);
Kidder v. H & B Marine, Inc.,
932 F.2d 347, 352-53 (5th Cir. 1991
(per curiam); Donovan v. Dillingham,
688 F.2d 1367, 1375 (11th
Cir. 1982) (en banc). The Board attempted to regulate the MDP
Plan, not single employer plans. MDP alleged "fiduciary" status
only with respect to the MDP Plan, not with respect to distinct
plans possibly established by individual Subscribing Employers.
MDPhysicians, 762 F. Supp. at 698 (noting that MDP did not plead
or prove "that it [wa]s bringing suit as the fiduciary of
numerous single-employer plans"); cf.
Donovan, 688 F.2d at 1372
n.10 (noting that multiple employer trust, "even though it is not
an employee benefit welfare plan, may nonetheless be subject to
ERISA's fiduciary responsibilities if it is a fiduciary to
employee benefit plans established or maintained by other
entities.").
5
Two types of "employee benefits plans" exist:
"Employee welfare benefit plans" and "employee pension benefit
8
"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 medical and
health benefits] through the purchase of insurance or otherwise."6
29 U.S.C. § 1002(1). MDP does not contend that it constitutes an
"employee organization" because employers, not employees, composed
its membership. Rather, MDP argues that it established and
maintained the MDP Plan as an "employer." So, following the
statutory trail, we look to ERISA's characterization of an
"employer": "[A]ny person acting directly as an employer or
indirectly in the interests of an employer in relation to an
employee benefit plan; . . . includ[ing] a group or association of
employers acting for an employer in such a capacity." 29 U.S.C. §
plans." 29 U.S.C. § 1002(3). In this appeal, we concern
ourselves only with "employee welfare benefit plans."
6
In full, ERISA defines "employee welfare benefit plan"
and "welfare plan" as
any plan, fund, or program which was heretofor 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
maintianed for the purpose of providing its
participants or their beneficiaries, through the
purchase of insurance or otherwise, (A) medical,
surgical, or hospital care or benefits, or benefits in
the event of sickness, accident, disability, death or
unemployment, or vacation benefits, apprenticeship or
other training programs, or day care centers,
scholarship funds, or prepaid legal services, or (B)
any benefit described in section 186(c) of this title
(other than pensions on retirement or death, and
insurance to provide such pensions).
29 U.S.C. § 1002(1).
9
1002(5). ERISA does not, however, define the term "group or
association of employers."
B. The Place Called "Employee Welfare Benefit Plans"
A court deciding whether a particular arrangement constitutes
an EWBP under ERISA "must first satisfy itself that there is in
fact a 'plan' at all." Hansen, 940 F.2d at 977. Only then will
the court consider the two primary elements of an ERISA "employee
welfare benefit plan" as defined in the statute: 1) whether an
employer established or maintained the plan; and 2) whether the
employer intended to provide benefits to its employees. Id.; see
Donovan, 688 F.2d at 1371 (setting out five elements of an EWBP).
We assume, without deciding, that the MDP Plan itself "is a
reality."
Hansen, 940 F.2d at 977 (quoting
Donovan, 688 F.2d at
1373). Just because "a 'plan' exists, however, does not
necessarily mean that the plan is an ERISA plan."7
Id. (emphasis
7
MDP argues that the MDP Plan constitutes a "plan, fund
or program" because it crafted the Plan to comply with ERISA
requirements. It painstakingly drafted the required documents
and agreements, which all stated that ERISA controlled the terms
of the particular document. MDP filed the requisite annual
report with the IRS and distributed the required Summary Annual
Report to Employees of Subscribing Employers. See
Donovan, 688
F.2d at 1372 (A "'plan, fund or program' under ERISA implies the
existence of intended benefits, intended beneficiaries, a source
of financing, and procedure to apply for and collect benefits").
MDP fervently argues that because MDP intended ERISA to cover the
MDP Plan, ERISA governs the Plan. We find this logic flawed.
ERISA protection and coverage turns on whether the MDP Plan
satisfies the statutory definition of "employee welfare benefit
plan," not whether the entity that established and maintained the
MEWA intended ERISA to govern the MEWA. See Matthew 25
Ministries, Inc. v. Corcoran,
771 F.2d 21, 22 (2d Cir. 1985).
10
added). The district court found that MDP did not constitute an
"employer" within the meaning of ERISA. Of course, if MDP is not
an "employer," then the MDP Plan is not an EWBP within the
territory we know as ERISA.
As we read the definition of "employer," MDP had to prove that
it acted in one of two ways to fall within the scope of the term:
Either MDP acted directly as an employer in relation to an employee
benefit plan or MDP acted indirectly in the interests of an
employer in relation to an employee benefit plan. 29 U.S.C. §
1002(5). The latter characterization of conduct that transforms a
"person" into an "employer" "include[s] a group or association of
employers acting [indirectly] for an employer" in relation to an
employee benefit plan. Id.
The district court considered the definitional language of
ERISA and judicial interpretations of that statutory language. The
court first found that MDP did not act directly as an employer in
relation to the MDP Plan because no employment or economic
relationship existed between the doctors who established the MDP
Plan and the employees of the Subscribing Employers.
MDPhysicians,
762 F. Supp. at 697 (citation omitted). Second, the court found
that MDP did not act indirectly in the interests of the Subscribing
Employers. It determined that MDP was merely an entrepreneurial
MDP also contends that it "established and maintained" the
Plan to provide health benefits for its participants and their
beneficiaries. Appellees do not dispute that MDP "established or
maintained" a "system of providing benefits pursuant to a written
instrument that satisfies ERISA . . . , 29 U.S.C. §§ 1022 and
1102." Donovan, 688 F.2d at 1372.
11
venture formed to market the MDP Plan to unrelated employers and,
further, that the Subscribing Employers did not "participate in the
day-to-day operation or administration" of the MDP Plan. Id. at
698 (citations omitted).
MDP argues that it constitutes an "employer" within the plain
language of the statute and that the MDP Plan qualifies as an
"employee welfare benefit plan." MDP insists that the definitional
language interpreted by the district court is clear and
unambiguous. Thus, the argument continues, the court erred in
subjecting the language to statutory construction, inserting
language into the definitions that modified the plain meaning of
the statute, looking to interpretive case law, and relying on DOL
opinions.8
We suspect that MDP urges this position because the
indications of the Congressional map-makers and the helpful legends
supplied by judicial interpreters on journeys similar to ours all
counsel against locating the MDP Plan within the borders of ERISA.
Cf. Donovan, 688 F.2d at 1371 ("[C]ourts, congressional comittees,
and the Secretary have uniformly held that [a multiple employer
trust -- the enterprise -- is] not an employee welfare benefit
plan."). As we noted in our initial trek over the statutory
ground, ERISA does not define the term "group or association of
employers." This void injects ambiguity into the statute. In the
8
Nothing substantiates MDP's conclusion that the
district court relied on DOL opinions regarding the MDP Plan;
rather, it cited the relevant statutory provisions and case law
interpreting those provisions. But see infra n.9 (describing
persuasive value of DOL opinions).
12
absence of any statutory elucidation as to the meaning of the
phrase "group or association of employers acting [indirectly] for
an employer" in relation to an employee benefit plan, we look to
the intent of the Congressional cartographers in determining
whether we can locate the MDP Plan on the ERISA map.
In reaction to the broad range of "persons" claiming
"employer" status to gain the protection of ERISA's broad
preemption against application of state regulations, Congress
evidenced its intent shortly after the passage of ERISA. The
Activity Report of the Committee on Education and Labor revealed
that
certain entrepreneurs have undertaken to market insurance
products to employers and employees at large, claiming
these products to be ERISA covered plans. For instance,
persons whose primary interest is in profiting from the
provision of administrative services are establishing
insurance companies and related enterprises. The
entrepreneur will then argue that [its] enterprise is an
ERISA benefit plan which is protected, under ERISA's
preemption provision, from state regulation. . . . [W]e
are of the opinion that these programs are not 'employee
benefit plans'. . . . [T]hese plans are established and
maintained by entrepreneurs for the purpose of marketing
insurance products or services to others. They are not
established or maintained by the appropriate parties to
confer ERISA jurisdiction . . . . They are no more ERISA
plans than is any other insurance policy sold to an
employee benefit plan.
. . . .
. . . [W]e do not believe that the statute and
legislative history will support the inclusion of what
amounts to commercial products within the umbrella of the
['employee benefit plan'] definition. . . . [T]o be
properly characterized as an ERISA employee benefit plan,
a plan must satisfy the definitional requirement of
section 3(3)[, which defines "employee benefit plan",] in
both form and substance.
H.R. Rep. No. 1785, 94th Cong., 2d Sess. 48 (1977). "While not
contemporaneous legislative history," we, like other courts, find
13
the Report "'virtually conclusive' as to legislative intent."
Hamberlin v. VIP Ins. Trust, 434 F. Supp. 1196, 1199 (D. Ariz.
1977) (quoting Sioux Tribe v. United States,
62 S. Ct. 1095, 1101
(1942)) (footnote omitted), cited in Taggart Corp. v. Life and
Health Benefits Admin., Inc.,
617 F.2d 1208, 1210 (5th Cir. 1980),
cert. denied,
101 S. Ct. 1739 (1981) and Bell v. Employee Sec.
Benefit Ass'n,
437 F. Supp. 382, 392 (D. Kan. 1977).
We glean several guiding principles from this passage, but we
are not the first judicial travellers to make this same statutory
journey. Other courts, examining similar terrain, provide certain
descriptive attributes that characterize statutory "employers." We
do not attempt to formulate or ascertain a comprehensive,
definitive test for determining whether an entity constitutes an
"employer" for the purposes of ERISA. Rather, we survey the
interpretive legend and confine our travel to that required to
decide whether this particular entity, MDP, is a statutory
"employer." We located several principles in our search that
convince us that the MDP Plan does not belong on the ERISA map.
First, we know that the MDP Plan, as a MEWA, offered or
provided certain medical and health benefits to the Employees of
the multiple Subscribing Employers. See supra p.6 (explaining
definition of MEWA). But we also understand that the Subscribing
Employers did not establish the MDP Plan, nor did they "participate
in the day-to-day operation or administration of the plan"; rather,
MDP established and maintained the MDP Plan, at least in terms of
the Plan's status as a "multiple employer welfare arrangement."
14
MDPhysicians, 762 F.2d at 698; 29 U.S.C. § 1002(4)(A) (defining a
MEWA as an EWBP or "any other arrangement . . . established or
maintained" to offer or provide certain benefits to employees of
two or more employers); see Matthew 25
Ministries, 771 F.2d at 22
(holding that a trust that solicited "disparate and unaffiliated"
employer-enrollees that evidently played no role in management of
the trust was not "established or maintained" by a statutory
"employer");
Taggart, 617 F.2d at 1210 (holding that a multiple
employer trust, a "proprietary enterprise" that acted "as a mere
conduit for hundreds of unrelated subscriber customers," which did
not participate in the "day-to-day operation or administration" of
the trust, was not "established or maintained" by an "employer"
under ERISA), cited in Memorial Hospital System v. Northbrook Life
Ins. Co.,
904 F.2d 236, 241-42 (5th Cir. 1990). So, assuming that
MDP established and maintained the MDP Plan to offer and provide
these benefits to the Subscribing Employers' Employees, the
appropriate question is whether MDP did so "in the interests of"
the Subscribing Employers. 29 U.S.C. § 1002(5).
We hold that MDP did not act indirectly "for the [Subscribing
Employers]" in relation to the MDP Plan. Id. Rather, it acted for
itself in relation to the MDP Plan. MDP advertised the MDP Plan as
a "commercial product" to "employers at large" in the Texas
panhandle. House Report 1785. The record indicates that MDP
sometimes used insurance agents to sell the Plan to employers for
a commission. MDP established, marketed, and maintained the MDP
Plan to enable the physician practice association, MDP Physicians,
15
to compete with other exclusive providers of medical and health
services. MDP's "primary interest" was in profiting from the
provision of medical and administrative services. Id. The MDP
Plan helped doctors in the practice association, MDPhysicians,
retain current patients and recruit new patients. Further, MDP's
Executive Director personally profited from his position as sole
shareholder of the entity that exclusively precertified all
hospitalization of Employees; the Plan covered hospitalization
charges only if the Employee obtained precertification. To allow
an entrepreneurial venture to qualify as an "employer" by
establishing and maintaining a multiple employer welfare
arrangement without input by the employers who subscribe to the
plan would twist the language of the statute and defeat the
purposes of Congress. See
Taggart, 617 F.2d at 1210, cited in Gahn
v. Allstate Life Ins. Co.,
926 F.2d 1449, 1452 (5th Cir. 1991); cf.
Bell, 437 F. Supp. at 392 (operation of the plan "provided by a
third-party entrepreneur" afforded "profit-making opportunities"
for a marketing agency and administrative services provider, who
retained "substantial ties" to the organizers of the plan);
Hamberlin v. VIP Ins. Trust,
434 F. Supp. 1196, (D. Ariz. 1977)
(trustees not acting on behalf of "employers" in promoting and
selling insurance policies directly to individual employees, but
acting "on behalf of the business of . . . their employer," an
insurance broker who established a self-funded multiple employer
trust).
Next, we consider the relationship between the provider of
16
benefits, MDP, and the recipients of those benefits under the Plan,
the Employees of Subscribing Employers. We agree with the Eighth
Circuit, which reads the pertinent definitions as requiring "that
the entity that maintains the plan and the individuals that benefit
from the plan [be] tied by a common economic or representation
interest, unrelated to the provision of benefits." Wisconsin Educ.
Ass'n Ins. Trust v. Iowa State Bd., 804 F.2d 1059, 1063 (8th Cir.
1986). The most common example is the economic relationship
between employees and a person acting directly as their employer.
See
Hansen, 940 F.2d at 978; supra n.4. The representational link
between employees and an association of employers in the same
industry who establish a trust for the benefit of those employees
also supplies the requisite connection. See National Business
Ass'n Trust v. Morgan,
770 F. Supp. 1169, 1174-75 (W.D. Ky. 1991)
(holding that trust established by employers in the bottling and
canning business constituted an EWBP). This special relationship
protects the employee, who can rely on the "person acting directly
as an employer" or the person "acting indirectly in the interests
of" that employer to represent the employee's interests relating to
the provision of benefits. Cf. Wisconsin Educ.
Ass'n, 804 F.2d at
1063.
Outside the provision of medical and health benefits under the
MDP Plan, MDP had no relationship with the Employees of Subscribing
Employers. DOL persuasively contends that the "relationship
between the plan sponsor and the participants . . . distinguishes
an employee welfare benefit arrangement from other health insurance
17
arrangements."9 We agree: Absent the protective nexus between the
entity providing the benefits and the individuals receiving the
benefits, we cannot consider MDP a "group or association of
employers" acting indirectly for the Subscribing Employers in
relation to the MDP Plan.
Our final destination in the jurisdiction of ERISA leaves us
without doubt that we cannot locate MDP as an "employer" within
ERISA. MDP established and maintained the MDP Plan to generate
profits. The Subscribing Employers, the entities with economic and
representational ties to the individuals that benefitted from the
MDP Plan, were not involved in the establishment or maintenance of
the MDP Plan. We hold that MDP did not act as "group or
association of employers" in the interest of the Subscribing
Employers in relation to the MDP Plan.
9
The DOL uses six criteria to determine whether an
"association of employers" exists under 29 U.S.C. § 1002(5): 1)
the process by which the association was formed and the purposes
for which it was formed; 2) the existence, if any, of
pre-existing relationships among the employer/members; 3) whether
employer/members were solicited; 4) who is entitled to
participate and who actually participates in the association; 5)
the powers, rights, and privileges of employer/members; and 6)
whether employer/members actually control and direct the
activities of the benefit plan. DOL Op. No. 86-08a at 4 (Feb. 3,
1989); DOL Op. No. 84-11 at 3 (Feb. 22, 1984); DOL Op. No. 82-59
at 2 (Nov. 10, 1982). Although we ground our decision on the
statutory language of ERISA and the intent of Congress, we
recognize that DOL opinions "constitute a body of experience and
informed judgment to which courts and litigants may properly
resort for guidance." Cf. Skidmore v. Swift & Co., 65 S. Ct. 161,
164 (1944) (determining precedential value of the Administrator's
"rulings, interpretations and opinions" under the Fair Labor
Standards Act). We consider the opinions of the Department of
Labor of persuasive value in making our decision, and pause
merely to note that it appears that none of these factors favor
MDP's interpretation of the term "employer."
18
III.
Based on our excursion through the definitional topography of
ERISA, we conclude that the district court correctly found that MDP
did not constitute an "employer" within the meaning of 29 U.S.C. §
1002(5), nor did the MDP Plan qualify as an "employee welfare
benefit plan" under 29 U.S.C. § 1002(1). We AFFIRM the district
court's grant of the Board's motion to dismiss for lack of subject
matter jurisdiction.
19
