The Future of ERISA’s Church Plan Exemption After Advocate Health: Abolition or Robust State Law Contract Remedies

Authors

Maria O'Brien, Boston University School of LawFollow
Sophie Esquier

Document Type

Book Chapter

Publication Date

2018

Publisher

Matthew Bender & Company

Language

en-US

Abstract

The Catholic Health Association (“the CHA”) of the U.S. is a professional umbrella organization for member hospitals which, collectively, employ hundreds of thousands of employees in myriad capacities.¹ Indeed, the CHA operates nearly 700 hospitals and 1614 continuing care facilities which, in 2015, collectively, accounted for more than 20 million emergency room visits, 105 million outpatient visits and 527,000 births.² A typical year sees about 5 million admissions to Catholic hospitals; one in six patients in the U.S. is cared for in a CHA member facility.³

Catholics are not alone in their operation of health care and nursing home facilities. Numerous other religious groups, including Southern Baptists⁴ and Jews⁵ own and operate large networks that employ thousands of individuals as nurses, custodians, technicians, security personnel, physicians, drivers and food service workers. In addition, many religiously affiliated organizations operate schools and agencies which provide services in both rural and urban communities and employ thousands of workers.⁶

Recently, the U.S. Supreme Court ruled in Advocate Health Care Network v. Stapleton⁷ that church affiliated nonprofits which operate hospitals and related health care facilities like the CHA and which offer defined benefit plans⁸are entitled to take advantage of ERISA’s church exemption.⁹ Although it is clear that the original exemption was to be narrowly construed and applied only to plans which covered clergy members and employees of a church as opposed to church affiliated entities,¹⁰ the Court ruled that subsequent amendments to ERISA in effect expanded the original exemption. Justice Kagan, writing for a unanimous Court held that first, under the best reading of ERISA, a plan maintained by a “principal purpose organization” qualifies as a church plan, whether or not it was established by a church; and, second, that the plain meaning of amendment resulted in the elimination of the requirement that a plan be established by a church in order to qualify for the exemption.

Recommended Citation

Maria O'Brien & Sophie Esquier, The Future of ERISA’s Church Plan Exemption After Advocate Health: Abolition or Robust State Law Contract Remedies , in 2018 NYU Review of Employee Benefits (2018).
Available at: https://scholarship.law.bu.edu/faculty_scholarship/2072