November 04, 2016

Three religious-affiliated, nonprofit health care systems are asking the U.S. Supreme Court to step into a multimillion-dollar battle with two plaintiffs firms that claim the pension plans of the medical networks are not exempt from federal law.

Plaintiffs lawyers began suing nonprofit religious employers in 2013, arguing that their pension plans did not qualify as “church plans” that are exempt from the insurance premiums, requirements and protections of the federal Employee Retirement Income Security Act.

Cohen Milstein and Keller Rohrback have urged the justices not to review lower court decisions. The three federal appeals courts—the Third, Seventh and Ninth circuits—agreed with the plaintiffs’ interpretation that only pension plans “established by a church” are entitled to the church-plan exemption under the Employee Retirement Income Security Act, or ERISA. Advocate Health Care is based in Illinois, Dignity Health in California and Saint Peter’s in New Jersey.

The plaintiffs firms contend that “hundreds of church-associated hospital conglomerates, often at the urging of ‘gotcha’ benefit consultants, have in recent decades exploited a misreading of ERISA to lower their costs by claiming church-plan status for plans that had been operated—correctly—as ERISA plans.” Those plans, Cohen Milstein’s Karen Handorf said in a brief, now are often substandard, underfunded—and no church stands behind them.

The full article can be read here