Churches, ERISA and the Supreme Court: A question of exemptions

On behalf of Stephen G. Nagle & Associates posted in ERISA Claims on Friday, April 14, 2017.

The Employee Retirement Income Security Act of 1974 (ERISA) is essentially a statute that regulates the management of pension plans and imposes a federal fiduciary duty to those tasked with their management. This federal statute is designed to help better ensure that workers’ interests are protected.

ERISA applies to most insurance plans that are offered by employers. However, like most laws, there are some exceptions. One currently under scrutiny is an exemption involving churches.

Generally, churches qualify for an exemption from these requirements. A recent case questions the extent of the exemption. The question has risen to the highest level and will be decided upon by the Supreme Court of the United States (SCOTUS).

What are the details of the ERISA issue? The case, Advocate Health Care Network v. Stapleton, questions whether or not the church exemption to ERISA requirements extends beyond church employees to also cover organizations that are affiliated with the church.

More specifically, do these exemptions apply to hospitals that are affiliated with churches?

How has this exemption been handled thus far? Over the past three decades the Internal Revenue Service (IRS), Department of Labor and Pension Benefit Guaranty Corporation, the three federal agencies that administer this statute, have treated hospitals that are affiliated with churches as exempt from ERISA.

What are the arguments for and against the exemption extending to church affiliated organizations? The hospitals argue that a 1980 extension to the original ERISA plan covers affiliated groups. The language of the extension states that a “plan established and maintained for its employees … by a church … includes a plan maintained by an organization … controlled by or associated with a church.” The hospitals point specifically to the “established and maintained” language to support their argument.

Hospital employees counter that this language was set out to relax the requirement that churches must establish and maintain the pension plans while still keeping the exemption within the confines of the church employees.

What will the court decide? SCOTUS has yet to rule on the case, but experts in the field expect the high court to focus on the specific language of ERISA to continue the current extension of the exemption and encourage Congress to change the statute if it disagrees with the interpretation.

What does this mean for those with ERISA claims? If SCOTUS rules as experts expect, it will likely not impact ERISA claims. However, if SCOTUS decides that hospitals are not part of the exception it could result in an increase in ERISA based claims from hospital employees.

This case provides an example of the intricate nature of ERISA claims. Not only can the claims themselves be difficult, but the law governing the claims can change. As such, those who believe they may have an ERISA issue are wise to seek legal counsel to better ensure their interests are protected.


Do you work for a church-affiliated medical facility?

On behalf of Stephen G. Nagle & Associates posted in ERISA Claims on Thursday, January 12, 2017.

More than 30 states have allowed companies to make changes to their workers’ compensation coverage in recent years. Those changes put employees in difficult positions when they suffer injuries at work.

Texas requirements for workers’ compensation coverage

The basic idea of workers’ compensation is a trade-off. Employees can’t easily sue their employers for job-related injuries. In return, injured employees are supposed to get timely medical care and partial payments for their wages.

In Texas, employers can opt out of using workers’ compensation insurance and provide the care needed by their employees directly. These private employee plans mean that if you are injured while working for a self-insured company, you must rely on your employer to pay your medical bills and lost wages. This can lead to fewer protections for workers who suffer injuries or workplace illnesses.

Employee rights advocates claim that employers who self-insure have too much power to deny injured employee claims. Fortunately, the Employee Retirement Income Security Act (ERISA) sets minimum insurance coverage standards for employers. Even private employee plans that cover health, dental and retirement are supposed to meet basic funding standards established by ERISA.

Do you work for a church-affiliated medical facility?

The IRS, Pension Benefit Guaranty Corp. and U.S. Department of Labor provide health coverage exemptions for medical facilities with religious associations. This means that certain health care providers do not need to comply with the minimum standards established by ERISA. A number of lawsuits between health organizations and their employees have brought the issue to the forefront.

Will the High Court side with employers or employees?

Later this year, the U.S. Supreme Court will be hearing arguments on both sides for a lawsuit between church-affiliated hospitals and their workers. Three health organizations want to overturn lower court decisions that forced them to follow ERISA standards.

If the U.S. Supreme Court agrees with the lower courts, the employers will have to follow minimum regulations set by federal law. This would be a win for workers. However, if the court reverses the lower courts, employees of church-affiliated medical facilities have a lot to lose.

If you are an employee who has suffered a job-related loss, seek the advice of an experienced ERISA attorney.

Related Posts: Making a claim against your employer-provided on the job insurance?