5 The Employee Retirement Income Security Act ("ERISA") governs qualified health plans offered by private employers and pre-empts state laws that "relate to" any employee benefit plan that is governed by ERISA. 29 U.S.C. §§ 1003(a), 1144(a). 6 Pharm. Care Mgmt. Ass'n v. Rutledge, 240 F. Supp. 3d 951 (E.D. Ark. 2017). 7 852 F.3d 722 (8th Cir. 2017).
The plaintiff, an employee of the Brooklyn Public Library, filed a disability claim in New York state court, which the defendant insurer removed to federal court. The plaintiff moved to remand the case to state court, arguing that no federal question existed to support federal jurisdiction because the Brooklyn Public Library's disability plan was a "governmental plan" within the meaning of 29 U.S.C. § 1003(b)(1) and was therefore exempted from ERISA's ambit. The court disagreed, rejecting the plaintiff's argument that the library had "undertaken the governmental function of educating the citizens of Brooklyn."
on his disability discrimination and retaliatory discharge claims)*Pittman v. American Airlines, Inc. (10th Cir., June 8, 2017) (affirming summary judgment in favor of American Airlines on Pittman's race and disability discrimination and retaliation because she failed to draw any causal connection or pretext)*Burke v. State of New Mexico (10th Cir., June 8, 2017) (affirming dismissal of 1983 and certain equal pay and whistleblower claims, reversing dismissal of whistleblower claim against one of the defendants in his official capacity, and remanding violation-of-privacy, wage discrimination, and whistleblowing claims)ERISAAdvocate Health Care Network v. Stapleton (U.S. Supreme Court, June 5, 2017) (reversing judgment in favor of Stapleton respondents: church plans include plans maintained by organizations whose principal purpose is the administration of such plans, regardless of who established them, churches or church-affiliated nonprofit organizations. These plans fall under ERISA's 29 USC s. 1003(b)(2) exemption) The Pioneer Centres Holding Company Employee Stock Ownership Plan v. Alerus Financial, N.A. (10th Cir., June 5, 2017) (affirming summary judgment for Alerus: it is the duty of the plaintiff asserting a breach of fiduciary duty claim under ERISA to prove losses to the plan)*Cases marked with an asterisk are cases the 10th Circuit does not consider binding precedent except under the doctrines of law of the case, res judicata, or collateral estoppel. They may be cited, however, for persuasive value under Fed.R.App.P. 32.1 and 10th Cir.R. 32.1.
So-called “church plans,” however, are exempt from ERISA’s requirements. 29 U.S.C. § 1003(b)(2). When originally enacted, ERISA defined a “church plan” as a plan “established and maintained” for its employees by a church.
ERISA provides such an exemption for “church plans,” which includes certain plans for the employees of churches or church-affiliated nonprofits even though not actually administered by a church. 29 U.S.C. §1003(b)(2). Respondents are current and former employees of the petitioner hospitals, who filed separate class actions alleging that their pension plans do not fall within the church plan exemption because those plans were not established by a church.
The plaintiffs countered by pointing out that to be a church plan – and thus, exempt from ERISA – a plan still had to be established by a church, which Advocate Health Care’s plan was not. Congress explicitly exempted certain types of plans from the scope of ERISA, including those set up by federal, state, local or tribal governments, under 29 U.S.C. sections 1002(32) and 1003(b)(1), as well as any “church plan,” 29 U.S.C. section 1003(b)(2). As defined by section 1002(33)(A), a church plan is “a plan established and maintained … for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax.”
It is a deceptively simple statement: Governmental employee benefit plans are exempt from ERISA. 29 U.S.C. § 1003(b)(1). But what about an employee benefit plan of an entity affiliated with a governmental entity, but whose employees are not government employees?
For the right religious organizations, church plans can offer significant advantages. But the considerations relevant to offering a church plan and qualifying one as such are complex matters that you should discuss with knowledgeable counsel with employee benefits and church-state experience.Key CasesHospital System's Pension Plan Exempt from ERISA as "Church Plan" In Overall v. Ascension, No. 13-11396, 2014 WL 1908428 (E.D. Mich. May 13, 2014), the court ruled that a "church plan" offered by Ascension Health Alliance and a member hospital qualified as such (pursuant to 29 U.S.C. §1003(b)(2)); therefore, the court dismissed the plaintiff's claims under the ERISA church plan exemption. First, the court ruled that a "church plan" need not be established by a church or place of "worshipful activity."