(ON REHEARING EN BANC)
GODBOLD, Chief Judge:
The Secretary of Labor pursuant to his authority under ERISA
Congress enacted ERISA to protect working men and women from abuses in the administration and investment of private retirement plans and employee welfare plans. Broadly stated, ERISA established minimum standards for vesting of benefits, funding of benefits, carrying out fiduciary responsibilities, reporting to the government and making disclosures to participants. See generally H.R. Rep. No. 93-533, 93d Cong. 2d Sess., reprinted in  U.S. Code Cong. & Ad. News 4639.
With a few specific exceptions not pertinent to this decision, Title I of ERISA applies to any "employee benefit plan" if it is established or maintained by any employer or employee organization engaged in commerce or in any industry or activity affecting commerce, or by both an employer and an employee organization. ERISA § 4(a), 29 U.S.C. § 1003(a). "Employee benefit plan" or "plan" means an "employee welfare benefit plan" or an "employee pension benefit plan" or a plan which is both a welfare plan and a pension plan. ERISA § 3(3), 29 U.S.C. § 1002(3).
UIT is a group insurance trust, commonly known as a multiple employer trust ("MET"), whose purpose is to allow employers of small numbers of employees to secure group health insurance coverage for their employees at rates more favorable than offered directly by an insurer. UIT obtained a group health insurance policy from Occidental Life Insurance Company of California to furnish specified insurance benefits. Employers and various employee organizations "subscribe" to UIT to receive the coverage of the blanket Occidental Life policy. Appellees contend that ERISA does not apply because there is involved only the "bare purchase of health insurance" and that no employee welfare benefit plans are implicated. The parties have debated whether UIT is a fiduciary and how that status or lack thereof bears on the presence of an employee welfare benefit plan. We agree with the Secretary that whether UIT merely sells insurance or is a fiduciary does not determine whether employee welfare benefit plans exist. Likewise, we agree with appellees that the existence of appellees' management of the trust or their falling within ERISA's fiduciary definition (which they challenge) does not necessarily mandate a finding that employee welfare benefit plans exist.
ERISA § 3(1), 29 U.S.C. § 1002(1), defines "employee welfare benefit plan" or "welfare plan" as
By definition, then, a welfare plan requires (1) a "plan, fund, or program" (2) established or maintained (3) by an employer or by an employee organization, or by both, (4) for the purpose of providing medical, surgical, hospital care, sickness, accident, disability, death, unemployment or vacation benefits, apprenticeship or other training programs, day care centers, scholarship funds, prepaid legal services or severance benefits (5) to participants or their beneficiaries.
Prerequisites (3), (4) and (5) are either self-explanatory or defined by statute. A plan, fund, or program must be established or maintained "for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise," health, accident, disability, death, or unemployment or vacation benefits or apprenticeship or other training programs, day care centers, scholarship funds, prepaid legal services or severance benefits.
The gist of ERISA's definitions of employer,
Not so well defined are the first two prerequisites: "plan, fund, or program" and "established or maintained." Commentators and courts define "plan, fund, or program" by synonym — arrangement, scheme, unitary scheme, program of action, method of putting into effect an intention or proposal, design — but do not specify the prerequisites of a "plan, fund, or program." At a minimum, however, a "plan, fund, or program" under ERISA implies the existence of intended benefits, intended beneficiaries, a source of financing, and a procedure to apply for and collect benefits.
"Established or maintained" appears twice in the definition of an employee welfare benefit plan: first, an employer or employee organization or both must establish or maintain a plan, fund, or program, and, second, the plan, fund, or program must be established or maintained for specified purposes. In many instances a plan is established or maintained, or both, in writing. It is obvious that a system of providing benefits pursuant to a written instrument that satisfies ERISA §§ 102 and 402, 29 U.S.C. §§ 1022 and 1102, would constitute a "plan, fund or program."
ERISA does not, however, require a formal, written plan. ERISA's coverage provision reaches "any employee benefit plan if it is established or maintained" by an employer or an employee organization, or both, who are engaged in any activities or industry affecting commerce. ERISA § 4(a), 29 U.S.C. § 1003(a) (emphasis added). There is no requirement of a formal, written plan in either ERISA's coverage section, ERISA § 4(a), 29 U.S.C. § 1003(a), or its definitions section, ERISA § 3(1), 29 U.S.C. § 1002(1). Once it is determined that ERISA covers a plan, the Act's fiduciary and reporting provisions do require the plan to be established pursuant to a written instrument, ERISA §§ 102 and 402, 29 U.S.C. §§ 1022 and 1102; but clearly these are only the responsibilities of administrators and fiduciaries of plans covered by ERISA and are not prerequisites to coverage under the Act. Furthermore, because the policy of ERISA is to safeguard the well-being and security of working men and women and to apprise them of their rights and obligations under any employee benefit plan, see ERISA § 2, 29 U.S.C. § 1001, it would be incongruous for persons establishing or maintaining informal or unwritten employee benefit plans, or assuming the responsibility of safeguarding plan assets, to circumvent the Act merely because an administrator or other fiduciary failed to satisfy reporting or fiduciary standards. Accord, Dependahl v. Falstaff Brewing Corp., 491 F.Supp. 1188, 1195 (E.D. Mo. 1980), aff'd 653 F.2d 1208 (8th Cir. 1981).
The Secretary contends that "establish" means no more than an ultimate decision
In determining whether a plan, fund or program (pursuant to a writing or not) is a reality a court must determine whether from the surrounding circumstances a reasonable person could ascertain the intended benefits, beneficiaries, source of financing, and procedures for receiving benefits. Some essentials of a plan, fund, or program can be adopted, explicitly or implicitly, from sources outside the plan, fund, or program — e.g., an insurance company's procedure for processing claims, cf. 29 C.F.R. § 2520.-102-5 (qualified health maintenance organization) — but no single act in itself necessarily constitutes the establishment of the plan, fund, or program. For example, the purchase of insurance does not conclusively establish a plan, fund, or program, but the purchase is evidence of the establishment of a plan, fund, or program; the purchase of a group policy or multiple policies covering a class of employees offers substantial evidence that a plan, fund, or program has been established.
In summary, a "plan, fund, or program" under ERISA is established if from the surrounding circumstances a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits. To be an employee welfare benefit plan, the intended benefits must be health, accident, death, disability, unemployment or vacation benefits, apprenticeship or other training programs, day care centers, scholarship funds, prepaid legal services or severance benefits; the intended beneficiaries must include union members, employees, former employees or their beneficiaries; and an employer or employee organization, or both, and not individual employees or entrepreneurial businesses, must establish or maintain the plan, fund, or program.
Without inquiring into other assets or purposes of the subscribers, the purpose stated in the Agreement and Declaration of Trust establishing UIT and thus the purpose of those who subscribed to UIT, was "to provide, through policies issued by insurers, life, accident-and-health, sickness-and-health, disability-income, hospital benefits, surgical-benefits, dental-care, and pre-paid-legal-expenses insurance for the use and the benefit of insured employees and of their families and dependents." The group health insurance policy UIT obtained from Occidental Life Insurance Company of California may provide less benefits than those listed in the UIT trust agreement, but clearly employers and employee organizations subscribe to UIT with the intent to provide health insurance, which is covered by ERISA § 3(1), 29 U.S.C. § 1002(1). It is equally clear from participation agreements found in the record that the persons benefiting from the group hospitalization are employees of employers or members of the employee organizations that subscribed to UIT and are financing the participation.
Many of the subscriptions were methods of fulfilling collective bargaining agreements between employers and unions to furnish health insurance benefits to employees.
Finally, as stipulated in the Articles of Trust of UIT, the subscribers, the beneficiaries, and UIT itself looked to the group health insurance policy and insurer to determine the eligibility requirements to receive benefits and "all other terms, conditions, limitations, restrictions, and provisions applicable to a policy of group insurance." This common sense approach adequately serves the needs of most employers and unions seeking to provide health insurance to employees at an ascertainable cost; they can agree to furnish only what the insurer contracts to furnish and avoid any unforeseen liability for, or denial of, benefits to employees. For the same reasons employers and unions normally will not require any procedures in addition to those required by the insurer.
Thus, it appears that employers or unions that subscribed to UIT to furnish health insurance for employees or members (either pursuant to an agreement or pursuant to a continuing practice of purchasing the insurance for a class of employees) established
The former Fifth Circuit in Taggart Corp. v. Life & Health Benefits Administration, 617 F.2d 1208 (5th Cir. 1980), cert. denied sub nom. Taggart Corp. v. Efros, 450 U.S. 1030, 101 S.Ct. 1739, 68 L.Ed.2d 225 (1981), held that the MET, which was providing group insurance to employers too small to qualify for group rates on their own, was not itself an employee welfare benefit plan and that Taggart Corporation's subscription to the MET to furnish insurance coverage to Taggart Corporation's sole employee did not constitute a "plan, fund, or program" within the meaning of ERISA § 3(1), 29 U.S.C. § 1002(1).
We agree with the holding and reasoning of the former Fifth that the MET itself was not an employee welfare benefit plan, see Taggart, 617 F.2d at 1210. We also agree that there was no employee welfare benefit plan in Taggart. Plaintiffs Kansas and Taggart Corporation alleged that the MET was the welfare plan. Neither party argued that Taggart Corporation had a plan, fund, or program. Taggart, 617 F.2d at 1211.
Although we agree with the holding in Taggart, we find the reasoning of the opinion that Taggart Corporation did not have a "plan, fund or program" encourages too broad an interpretation. If Taggart is interpreted to mean ERISA does not regulate purchases of health insurance when there is no welfare plan, we agree. The purchase of insurance is only a method of implementing a plan, fund, or program and is evidence of the existence of a plan but is not itself a plan. If Taggart implies that an employer or employee organization that only purchases a group health insurance policy or subscribes to a MET to provide health insurance to its employees or members cannot be said to have established or maintained an employee welfare benefit plan, we disagree. To that extent Taggart shall no longer be binding in the Eleventh Circuit.
We hold only that the district court had subject matter jurisdiction over this case.