When is an employee benefit plan established for purposes of Title I of ERISA?

Normally, employee benefit plans are established by adoption of a board resolution if the employer is a corporation; the plan document is then typically signed by an officer of the corporation. Noncorporate entities usually adopt employee benefit plans by executing a plan document. In large corporations welfare plans are sometimes adopted without board approval by officers who have been delegated the authority to take such action or have it as part of the duties of their office. Formal adoption of a plan document is not the only way that Title I coverage can be established, however. Informal actions may result in the creation of a plan subject to Title I of ERISA. For instance, the purchasing of insurance and the paying of insurance premiums directly to an insurance company has been held to be sufficient actions to establish a plan. [Memorial Hosp System v Northbrook Life Ins Co, 904 F 2d 236 (5th Cir 1990)] The Seventh Circuit has decided that an ERISA plan is established when the decision to extend benefits has become a reality. [Ed Miniat, Inc v Globe Life Ins Group, Inc, 805 F 2d 732 (7th Cir 1986)]