On December 31, 2014, the court in Stapleton v. Advocate Health denied the defendants’ motion to dismiss holding that the church affiliated hospital pension plan at the heart of the case is subject to ERISA. Ruling in line with the courts in Rollins v. Dignity Health and Kaplan v. Saint Peter’s, the court here finds that only a church may establish a church plan. Because Advocate Health acknowledges that it is not a church, it therefore cannot sponsor a plan that falls within the church plan exemption to ERISA.
As we’ve previously reported, there are now nine cases challenging the interpretation of the church plan exemption. Decision in the cases are in various states, but currently there are three cases that have made it to the appellate level but only one of which is actually being heard. The first case, Overall v. Ascension, is on appeal to the 6th Circuit after the district court agreed with the defendants and long standing IRS interpretations that a plan sponsor affiliated and controlled by a church can establish and maintain a church plan. Briefs have been filed and oral argument will be held soon. In the other two cases, the district courts in Rollins and Kaplan certified interlocutory appeals to the 9th Circuit and 3rd Circuit, respectively. In both cases, the defendants have asked the circuit courts to hear the appeal but neither has yet had their motion ruled on.
These cases continue to inspire passionate arguments on both sides. As we’ve stated before, this issue will ultimately be resolved by one of two avenues: the Supreme Court or an act of Congress. I’d bet on the first, but wouldn’t be surprised to see the second.