2 F.3d 1 (2nd Cir. 1993), 1542, Atlantic Healthcare Benefits Trust v. Googins

Docket Nº:1542, Docket 92-7955.
Citation:2 F.3d 1
Party Name:ATLANTIC HEALTHCARE BENEFITS TRUST, Jeffry C. Neal, Trustee of Atlantic Healthcare Benefits Trust, United Healthcare Association of America, Inc. and National Insurance Consultants, Inc., Plaintiffs-Appellants, v. Robert R. GOOGINS, Commissioner, Department of Insurance of the State of Connecticut and the Department of Insurance of the State of Con
Case Date:August 02, 1993
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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2 F.3d 1 (2nd Cir. 1993)

ATLANTIC HEALTHCARE BENEFITS TRUST, Jeffry C. Neal, Trustee

of Atlantic Healthcare Benefits Trust, United Healthcare

Association of America, Inc. and National Insurance

Consultants, Inc., Plaintiffs-Appellants,

v.

Robert R. GOOGINS, Commissioner, Department of Insurance of

the State of Connecticut and the Department of

Insurance of the State of Connecticut,

Defendants-Appellees.

No. 1542, Docket 92-7955.

United States Court of Appeals, Second Circuit

August 2, 1993

Argued May 18, 1993.

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Michael D. Singer, Manhattan Beach, CA for plaintiffs-appellants.

John G. Haines, Hartford, CT (Richard Blumenthal, Atty. Gen., State of Conn., of counsel), for defendants-appellees.

Judith E. Kramer, Washington, DC (Mark I. Machiz, Karen L. Handorf, Gail Perry, U.S. Dept. of Labor), for amicus curiae, Secretary of Labor.

Before: WINTER and JACOBS, Circuit Judges, and MUKASEY, District Judge. [*]

JACOBS, Circuit Judge:

Plaintiffs are a group of individuals and entities that arrange with employers to provide employee health care benefits. When the State of Connecticut began taking steps to subject the benefits arrangement to regulation as an insurance company, the plaintiffs sued the Connecticut Commissioner of Insurance (the "Commissioner") and the Connecticut Department of Insurance. Plaintiffs seek (a) a declaration that the health care benefits they supply are furnished through a multiple employer welfare arrangement ("MEWA") that is subject to regulation under the Employee Retirement Income Security

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Act of 1974 ("ERISA"), 29 U.S.C. Sec. 1001 et seq (1988), and that the preemption provisions of ERISA preclude Connecticut from regulating a MEWA as an insurance company; and (b) an injunction barring the Commissioner from requiring them to register as an insurance company.

The United States District Court for the District of Connecticut (Dorsey, J.) granted defendants' motion for summary judgment relying upon a 1983 amendment to the preemption provision of ERISA that permits State insurance departments to regulate MEWAs. Plaintiffs now appeal. We affirm the district court's dismissal on the merits of the claim against the Connecticut Commissioner of Insurance. The claim against the Department of Insurance is barred by the Eleventh Amendment, and we therefore dismiss that claim sua sponte for lack of subject matter jurisdiction.

BACKGROUND

Defendants in this action are Robert Googins, Connecticut's Commissioner of Insurance and the Department of Insurance of the State of Connecticut.

Plaintiff Atlantic Healthcare Benefits Trust ("Atlantic") is a self-funded trust organized under the laws of the Commonwealth of Virginia. United Healthcare Association of America ("United") is a Virginia corporation that (according to the complaint) "offers health and welfare benefits through [Atlantic] to participating employers and their covered employees and dependents." United established Atlantic so that employers who are "members" of United can provide medical benefits to their employees. The Atlantic trust is "self-funded", meaning that each member pays money into the trust which then pays the claims submitted by the employees of each member in accordance with the employer's health benefits plan. The cost of operating Atlantic is borne by the members who are also subject to assessments for the payment of claims.

According to the complaint, Atlantic is an employee welfare benefit plan under 29 U.S.C. Secs. 1002(1), (3) and 1003 and a MEWA under Sec. 1002(40). Sometime in 1991, Atlantic began to market its services in the state of Connecticut. Shortly thereafter, the Department of Insurance commenced an investigation of Atlantic's activities in the State. By letter dated December 13, 1991, Jon E. Arsenault, Counsel to the Department of Insurance, informed Edward Zinner, President of Plaintiff National Insurance Consultants, that the Department was investigating Atlantic's marketing activities, and requested information. As indicated by subsequent correspondence and the affidavit of Arsenault, none of the plaintiffs provided the information. By letter dated January 10, 1992, the Department of...

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