Stapleton v Advocate Healthcare Court Finds that Plan Fails AARP Foun
Stapleton v. Advocate Healthcare, Court Finds that Plan Fails ... - AARP Foun... Legal Advocacy
In its decision, the Seventh Circuit held that the clear language of ERISA requires that a church plan must actually be established by a church. Moreover, policy considerations counseled against a ruling in favor of the health care company. In particular, the court was concerned about the number of hospitals that treated their pension plans as church plans, allowed them to become underfunded, and then ran into financial troubles that left their employees out of luck. AARP’s brief, which was joined by the National Employment Lawyers Association, explained to the court all of the protections that employees would lose — including proper funding of benefits and loss of the insurance provided by the Pension Benefit Guaranty Corporation — if the court were to find that ERISA’s church plan exemption applies.
Court Finds That Plan Fails to Meet Plan Exemption
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A group of current and former employees of Advocate Health Care Network filed a class action against their employer’s pension plan. They alleged that the religiously affiliated hospital has improperly claimed that its pension plan is exempt from the requirements of the Employee Retirement Income Security Act (ERISA) as a church plan. They stated that the church plan exemption was intended to apply only to plans that were started or administered by churches themselves. Because Advocate claimed its pension plan was a church plan, the Advocate Pension Plan did not comply with many of the requirements to protect plan participants under ERISA. The U.S. Court of Appeals for the Seventh Circuit granted Advocate’s request for an immediate appeal from the district court’s decision. The district court had found that Advocate’s pension plan did not meet the church plan exemption requirements.In its decision, the Seventh Circuit held that the clear language of ERISA requires that a church plan must actually be established by a church. Moreover, policy considerations counseled against a ruling in favor of the health care company. In particular, the court was concerned about the number of hospitals that treated their pension plans as church plans, allowed them to become underfunded, and then ran into financial troubles that left their employees out of luck. AARP’s brief, which was joined by the National Employment Lawyers Association, explained to the court all of the protections that employees would lose — including proper funding of benefits and loss of the insurance provided by the Pension Benefit Guaranty Corporation — if the court were to find that ERISA’s church plan exemption applies.