Supreme Court to weigh in on religiously affiliated hospitals and pension exemption issue

Several religious media outlets reported this week that on March 27 the Supreme Court heard oral arguments in Advocate Health Care Network v. Stapleton, a case that involved legal challenges to the pension plans of several Catholic or Christian hospital systems.

According to Religion News Service (March 27, 2017), religious institutions are now exempt from federal law that protects pensions. The law is called the Employee Retirement Income Security Act (ERISA).

The employees who sued the hospitals, two with Catholic ties and one with a Lutheran affiliation, say they deserve the same pension protections afforded to other workers not employed by churches, which both defendants and plaintiffs agree are exempted by ERISA.

The case has implications for Catholic institutions in that if the hospitals lose they could face retroactive penalties totaling billions of dollars. Ultimately, the ruling would affect an estimated 1 million employees working in religious ministries.

According to the National Catholic Register (March 30, 2017), the case hinges on dueling interpretations of Congress’ intent when it passed the Employee Retirement Income Security Act, which set standards for funding and insurance for corporate pensions. When a group of religious orders challenged the law, Congress approved a limited exemption for church plans.

The Register report goes on to note, the Supreme Court is being asked to decide whether ERISA’s “1974’s church-plan exemption applies so long as a pension plan is maintained by an otherwise-qualifying church-affiliated organization, or whether the exemption applies only if, in addition, a church initially established the plan.” The Catholic and Christian hospitals claim that ERISA’s religious exemption includes church pension plans initiated by houses of worship as well as those established by religious agencies.

For the RNS report, click here.

For the National Catholic Register report, click here.