January 16, 2018

An Illinois federal judge gave the final nod on Tuesday to a $29.5 million settlement in a class action accusing Ascension Health of violating the Employee Retirement Income Security Act, calling the deal a good result for the class despite a recent adverse U.S. Supreme Court ruling.

U.S. District Judge Gary Feinerman told attorneys for Accretive Health and a class of participants and beneficiaries of the Wheaton Franciscan Retirement Plan — sponsored by Ascension after it acquired Wheaton’s health care subsidiaries in 2016 — that the settlement provided significant benefits for the class to resolve its claims Wheaton improperly used ERISA’s “church plan” exemption.

The settlement requires Ascension to guarantee $29.5 million of benefits to class members in the event that trust assets in the plan dip below that number.

Judge Feinerman noted that the settlement came after the Supreme Court issued its decision in Advocate Health Care Network v. Stapleton, which extended ERISA’s “church plan” exemption to any benefit plan maintained by a church affiliate even if it wasn’t originally established by a church.

“In the midst of the case, plaintiffs’ hand got significantly worse,” Judge Feinerman said, adding that in deeming the settlement fair and reasonable, he took into account the risk they faced in litigating the case further.

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The class is represented by Carol Gilden, Karen Handorf, Michelle Yau, Julie Goldsmith Reiser and Julia Horwitz of Cohen Milstein Sellers & Toll PLLC, and Lynn Lincoln Sarko, Ron Kilgard, Chris Graver and Laura Gerber of Keller Rohrback LLP.

The full article can be read here.