Holcomb v. Hospital Sisters Health System
United States District Court for the Central District of Illinois
Case No. 16-3282
Defendant Hospital Sisters Health System (“HSHS”) is a non-profit healthcare conglomerate in Illinois and Wisconsin. The company is headquartered in Illinois and through Hospital Sisters Services, Inc. owns and operates fifteen hospitals that provide inpatient and outpatient healthcare services. HSHS employs more than 14,600 people.
This class action lawsuit is brought on behalf of all participants and beneficiaries of the defined benefit pension plan, the Hospital Sisters Health System Employees’ Pension Plan (the “HSHS Plan” or “Plan”).
Plaintiffs allege that Defendants improperly claim that the HSHS Plan qualifies as a “church plan” under the Employee Retirement Income Security Act (“ERISA”). Plaintiffs allege that in operating its Plan as a “church plan,” HSHS does not comply with many protections afforded to pension beneficiaries under ERISA, by, among other things:
- under-funding the Plan and failing to follow ERISA’s funding rules for the Plan;
- failing to furnish Plaintiffs or any member of the proposed Class with Summary Plan Descriptions, Summary Annual Reports, Notifications of Failure to Meet Minimum Funding, or Funding Notices;
- improperly calculating lump sum options, so that participants received lower lump sum offers than they were entitled to receive under ERISA; and
- failing to file annual reports with respect to the Plan with the Secretary of Labor.
In addition, Plaintiffs allege that the application of ERISA’s “church plan” exemption to the HSHS Plan is an unconstitutional violation of the Establishment Clause.
On January 18, 2017, the Court appointed Cohen Milstein Sellers & Toll, PLLC and Keller Rohrback L.L.P., as interim co-lead counsel. Plaintiffs filed the Master Consolidated Complaint on February 16, 2017. The parties entered into a class action settlement agreement on May 31, 2018, pending court approval. Plaintiffs filed an Unopposed Motion for Preliminary Approval of Settlement Agreement on June 8, 2018. On October 30, 2018, the Court preliminarily approved the Settlement; directed that Class Notice be sent to each person within the Settlement Class; and scheduled a Fairness Hearing for Friday, February 22, 2019 at 1:30 p.m.