June 06, 2019

A Missouri federal judge gave final approval Thursday to a $60 million settlement between SSM Health and a class of workers who accused the hospital system of exaggerating its connection to the Catholic Church to score a “church plan” exemption from the Employee Retirement Income Security Act.

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The settlement requires SSM Health Care Corp. to fully fund its employee retirement plan for 10 years, deposit $15 million per year in the plan from 2019 to 2022, and make $115 payments to workers who received their retirement savings in a lump sum.

The plan's funding status was a point of contention during the case's three years in court, with SSM Health workers saying the plan was underfunded by roughly $813 million due to its official classification as a church-affiliated plan, which allowed it to skirt ERISA's funding requirements.

The workers argued SSM Health wasn't sufficiently affiliated with the Catholic Church to qualify for the exemption, saying the hospital system was a medical facility, not a church, and the church didn't play a significant enough role in its operations.

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The employees are represented by Laura R. Gerber, Lynn Lincoln Sarko and Ron Kilgard of Keller Rohrback LLP, Mark K. Gyandoh of Kessler Topaz Meltzer & Check LLP, Karen L. Handorf, Michelle Yau and Mary J. Bortscheller of Cohen Milstein Sellers & Toll PLLC, Douglas P. Needham, Mark P. Kindall and Robert A. Izard of Izard Kindall & Raabe LLP, and Matthew H. Armstrong of Armstrong Law Firm LLC.

The full article can be accessed here.