The opinion of the court was delivered by: Moran, Senior District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiff Dolores J. Russo filed this action alleging that her
employer, defendant B & B Catering, Inc. (B & B), violated
ERISA, 29 U.S.C. § 1022, 1024(b)(1), by failing to timely
notify her that her health insurance had been terminated.
Plaintiff also alleges that defendant Jeffrey Dziedzic, a B & B
employee, is individually liable as a plan fiduciary. The
parties have filed cross motions for summary judgment. Plaintiff
agrees to the dismissal of Dziedzic, leaving B & B as the only
remaining defendant. Subsequent to defendant's motion, plaintiff
filed an amended complaint adding a conversion claim. The
instant motions, however, only address the ERISA claims. For the
following reasons, we grant summary judgment for plaintiff with
respect to liability.
In September 1998, B & B contracted with Rush Presbyterian
(Rush) as its new group insurer. For a brief period it paid 100%
of the premiums. In January 1999, approximately four months
after the initiation of the policy, B & B informed its employees
that it would cease contributing to the insurance premiums
entirely — employees themselves would now be responsible for
100% of the premiums. However, the company would continue to
deduct the relevant premiums from weekly paychecks and pay the
insurer directly. Employees were given the option to decline
coverage. This they could do by notifying Rush directly, rather
than by going through B & B. Rush sent its materials, including
descriptions of the coverage, identification cards, and
termination forms, to covered employees at their homes, not
through B & B.
B & B's financial difficulties continued, and although it
continued to deduct insurance premiums from employees'
paychecks, several of its checks in payment for the premiums
were returned unpaid by the bank. As a result, Rush cancelled
the policy in June 1999. B & B claims it had no knowledge of the
cancellation until it was informed by its broker in September
1999, shortly after which time it informed its employees,
B & B reimbursed plaintiff for any medical expenses incurred
by her during gaps between insurance policies. However, because
of the time lapse following Rush's termination, plaintiffs
preexisting condition has prevented her from acquiring new
The court may only grant summary judgment when there are no
genuine issues of material fact and the moving party is entitled
to judgment as a matter of law. See Celotex Corp. v. Catrett,
477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We
must also draw all inferences and view all admissible evidence
in the light most favorable to the non-moving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct.
2505, 91 L.Ed.2d 202 (1986). This does not mean there must be
absolutely no evidence supporting the non-moving party, but
rather there is not enough to support a reasonable jury verdict.
Id. at 248, 106 S.Ct. 2505.
An ERISA employee welfare benefit plan must be "(1) a plan,
fund or program; (2) established or maintained; (3) by an
employer or employee organization or by both; (4) for the
purpose of providing medical, surgical, hospital care, sickness,
accident, disability, death, unemployment or vacation benefits
. . .; (5) to participants or their beneficiaries." Postma v.
Paul Revere Life Ins. Co., 223 F.3d 533, 537 (7th Cir. 2000).
The second element, whether plaintiffs health insurance plan was
established or maintained by B & B, is at issue here.
The critical factor is the employer's level of administrative
involvement in the plan. Defining which employees are eligible
to participate, contributing to premiums and performing some
administrative functions can all implicate ERISA. On the other
hand, allowing insurance carriers access to employees on a
neutral basis, or withholding the employees' premiums from
paychecks is generally not enough to bring a plan within ERISA's
coverage. See Brundage-Peterson v. Compcare Health
Services Ins. Corp., 877 F.2d 509, 510 (7th Cir. 1989). We
also consider a Department of Labor regulation that excludes
certain group insurance plans from ERISA, if
(1) No contributions are made by an employer or
(2) Participation the program is completely voluntary