What Is a “Church Plan”? Supreme Court to Decide

Wherever you live in the U.S., your health care and hospital systems are likely to have a church-affiliated provider. If so, it is probably a vast organization with thousands of employees. These organizations are non-profits that adhere to religious tenets for treating the poor. At the same time, they are also sophisticated business organizations.

Many, if not all, sponsor retirement plans.

The private sector retirement law known as ERISA exempts “church plans.” It’s clear that Congress did not want to burden a church, synagogue, mosque, and other places of worship with a complicated and potentially expensive retirement law.

But do these large health care systems qualify as “church plans”?

Illinois-based Advocate Healthcare Network, New Jersey’s Saint Peter’s Healthcare System, and Dignity Health in California say they qualify as "church plans." 

Federal appeals courts disagree.
Now, the Supreme Court will decide. My hunch, based on recent rulings, is that the Court will say these are "church plans."

This is a big issue that could affect the public. The employees who are suing allege that their retirement funds do not meet federal contribution minimums (plans must be funded at 90% of the benefits they have promised, though the law gives employers freedom to decide what benefits-- if at all--they will provide).
If their plans go bankrupt, they would be a burden to other employers and also taxpayers. 

However, if the workers prevail, the health care systems will likely need to make massive contributions to make up for deficits. 

That has potential to add to everyone’s health care costs, or, if the entities go bankrupt, to strain the limited resources for health care.

See the picture above: If these plans are “church groups,” why aren’t they living up to the promises they made to their thousands of employees? Federal law didn't require them to make these promises-- they did so to be competitive in their labor market. St. Peter's, when you say you are treating people better for life, does this include your employees?