By David McFarlane, partner at Crowell & Moring’s Corporate, Health Care, Tax, and Labor & Employment groups in Los Angeles
In a surprising unanimous decision on June 4, the U.S. Supreme Court ruled that the pension plans of religious-affiliated non-profit hospital and health care systems are exempt from the stringent funding and other requirements of the Employee Retirement Income Security Act. The ruling reversed the decisions of the U.S. Court of Appeals for the Third, Seventh and Ninth Districts which held that the hospital and health care systems were bound by ERISA and, in particular, had to comply with ERISA’s heightened funding, reporting and disclosure provisions. The ruling had the potential to impact billions of dollars in additional pension plan costs for many large hospital systems and other religious-affiliated organizations such as schools that had long believed they could rely on what is commonly known as ERISA’s “church exemption.”
David McFarlane will be speaking at LexisNexis’ July webinar, Ethics Rules to Consider When Using Free Web Research Sources & Social Media. Read more about this CLE-accredited event.
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