Thursday, June 22, 2017
As anyone who has represented a house of worship knows, they are subject to many legal exceptions and special rules. One of the more obscure but also more important ones is the exemption of church benefit and pension plans from the incredibly complex requirements of the Employee Retirement Income Security Act of 1974 (ERISA). At issue in Advocate Health Care Network v. Stapleton was whether this statutory "church plan" exemption extends to pension plans offered by church-affiliated nonprofits that run hospitals and other healthcare facilities, as had been longstanding interpretation of the IRS, the Department of Labor, and the Pension Benefit Guaranty Corporation. The plaintiffs in these consolidated cases were current and former employees of the nonprofits who had successfully argued in the lower courts that the exemption is limited to plans established by churches and so the plans established by these church-affiliated nonprofits were subject to ERISA.
In a unanimous opinion (Justice Gorsuch not participating), the Supreme Court reversed the lower court decisions. Based on a careful reading of the statutory text, as well as consideration of the congressional intent with respect to the amendments to that text at issue in the case, the Court concluded that plans maintained by church-affiliated entities for their employees fell within the exemption, regardless of what type of entity had established the given plan. The case therefore resolved the uncertainty created by the lower court decisions in these consolidated cases, which had thrown the scope of the church plan exemption into doubt. While Justice Sotomayor wrote separately to highlight her concerns about the effect of the decision, she agreed with the Court's reading of the statute and so joined the Court's opinion in full. For more detailed coverage, see SCOTUSblog.