Supreme Court: Pension Plans of Religiously Affiliated Hospitals Are ERISA "Church Plans"

Giving a major win to religiously affiliated health care systems, the U.S. Supreme Court today in Advocate Health Care Network v. Stapleton, (Sup. Ct., June 5, 2017), held that their retirement plans qualify as exempt "church plans" under ERISA.  Interpreting ambiguous language in the statute, Justice Kagan writing for a unanimous court (Gorsuch, J. not participating) said:

ERISA provides (1) that a “church plan” means a “plan established and maintained . . . by a church” and (2) that a “plan established and maintained . . . by a church” is to “include[] a plan maintained by” a principal-purpose organization. Under the best reading of the statute, a plan maintained by a principal-purpose organization therefore qualifies as a “church plan,” regardless of who established it. We accordingly reverse the judgments of the Courts of Appeals.

Justice Sotomayor filed an opinion saying that she joins the Court's opinion, but has questions whether if Congress were reconsidering the issue today it would grant the church-plan exemption to some of the largest health-care providers in the country, which is the result of the Court's decision.