Wednesday, September 17, 2014

Court Says Hospital's Retirement Plan Is "Church Plan," Rejecting Magistrate's Recommendation

In Medina v. Catholic Health Initiatives, (D CO, Aug. 26, 2014), a Colorado federal district court disagreed with the interpretation of ERISA in a federal magistrate judge's recommendation (see prior posting) and held that a Catholic health system's retirement plan is an exempt "church plan." This is one of a series of cases filed around the country claiming an IRS 2002 Private Letter Ruling was legally incorrect in allowing plans that were not "created" by a church to claim the exemption. The suits seek to require the religiously-affiliated hospital plans to meet ERISA's funding and other requirements. The court held that it is enough under the relevant statutory provision that the retirement plan is "maintained by an organization controlled by or associated with a church...." BNA Daily Report for Executives (Aug. 28) [subscription required] reports that with this decision, federal district courts are split 2-2 on the issue, with four more cases pending.