Supreme Court again tackles religious employment issues

Religious Liberty | Case questions how faith-based hospitals run their pension plans
by Mary Reichard
Posted 4/10/17, 01:09 pm

A Supreme Court case involving three hospital systems once again brought up the ongoing legal question about just what counts as a church. The court heard arguments in the case at the end of March. The decision could effect millions of workers at religiously affiliated hospitals, schools, and other organizations.

Advocate Health Care, Dignity Health, and St. Peter’s Healthcare System want to keep running their employee pension plans as they have for decades, with IRS approval. Federal law gives the religiously affiliated hospitals an exemption from a requirement that they fully fund and insure employee pension plans.

But employees say their retirements are at risk and the hospitals shouldn’t be exempt from the Employee Retirement Income Security Act (ERISA).

The employees’ lawyer, James Feldman, said while churches should have an ERISA exemption, church-affiliated agencies should not.

“This line between churches and church agencies is one that gets drawn throughout the law,” Feldman said. 

But the hospitals’ attorney, Lisa Blatt, said the law clearly is meant to protect church agencies like the hospitals: “We know Congress had in mind a hospital plan. The word hospital appears on every page of the legislative history.”

A ruling against the hospitals in this case could affect many religiously affiliated organizations such as schools and charities. Most of those organizations don’t see church as the four walls of a sanctuary but as vocations where the work of Christ is put into action. Getting rid of the ERISA exemption could cost those church agencies billions of dollars.

“The respondents are seeking $11 billion” from the hospitals, Blatt said. “I am not kidding—$11 billion per year.”

Justice Ruth Bader Ginsburg suggested such an enormous payout could be avoided by not making a ruling for the employees retroactive. The federal government sided with the hospital systems in this case, saying the law clearly intended to exempt them.

A ruling in the case is expected sometime before end of June.

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Mary Reichard

Mary is co-host, legal affairs correspondent, and dialogue editor for WORLD Radio. She is also co-host of the Legal Docket podcast. Mary is a graduate of World Journalism Institute and St. Louis University School of Law. She resides with her husband near Springfield, Mo.

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