June 13, 2017

Supreme Court Opines in Church Plan Exemption Matter (article)

On June 5, 2017, the Supreme Court rendered a unanimous opinion, with Justice Sotomayor concurring, that plans sponsored by church-affiliated organizations, such as the hospital-petitioners in this case, are exempt from ERISA.  The challenge in this case surrounded the issue of whether participants of a defined benefit plan sponsored by a church-affiliated nonprofit hospital claim should be covered by ERISA’s funding rules, applicable to plans subject to ERISA (see Church Plans and ERISA Caught in the Crosshairs, Benefit Beat, 3/06/2017).  Generally, a church plan is exempt from ERISA unless it elects to be covered by ERISA.  In her concurring opinion, Justice Sotomayor suggests that this might not be the outcome intended in today’s world order, but given the statutory construction, it is the appropriate conclusion.

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