Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
April 19 — Seven class actions have been filed in the past month challenging how religious hospitals fund their pension plans, with the latest lawsuit accusing Bon Secours Health System Inc. of having a $390 million pension funding shortfall in violation of ERISA.
Since March 17, lawsuits have targeted two Cincinnati hospitals, St. Elizabeth Medical Center and Mercy Health, and Illinois-based Wheaton Franciscan Services. Maryland-based Bon Secours and Missouri's SSM Health Care Corp. each have been sued twice.
These lawsuits ask the same question that has fueled 20 proposed class actions over the past three years: Can a religiously affiliated hospital treat its pension plan as a “church plan” exempt from the Employee Retirement Income Security Act, or must the hospital comply with the statute's funding, vesting and disclosure requirements?
Nearly all of these lawsuits have been filed by two pairs of plaintiffs' law firms, which are increasingly targeting the same hospital defendants.
Working together, plaintiffs' firms Cohen Milstein Sellers & Toll PLLC and Keller Rohrback LLP spearheaded the church plan litigation effort in 2013, ultimately scoring victories in both the Third and Seventh Circuits.
The Cohen-Keller team represents the workers who sued Bon Secours on April 11, along with workers in a dozen similar lawsuits (Hodges v. Bon Secours Health Sys., Inc., D. Md., No. 1:16-cv-01079-RDB, complaint filed 4/11/16).
The other firms active in this area, Kessler Topaz Meltzer & Check LLP and Izard Nobel LLP, jointly represent the Bon Secours workers who filed their lawsuit on April 18, along with Baltimore-based Janet, Jenner & Suggs LLC.
The Kessler-Izard team has been increasingly active in church plan litigation in recent months. The two firms jointly represent workers in cases against Baptist Health System Inc., St. Elizabeth and Mercy Health.
Over the past month, the two litigation teams have targeted some of the same defendants. In addition to Bon Secours—which was sued by each team in the span of a week—both teams filed separate lawsuits against Missouri-based SSM Health within five days of each other.
Diana F. Stager, director of marketing and communications for Bon Secours, told Bloomberg BNA in an April 19 statement that the company intends to vigorously defend this most recent lawsuit.
“ The Internal Revenue Service has issued rulings over the past 20 years finding that the Bon Secours plans are church plans,” the statement said.
“Bon Secours is committed to the secure retirement of its current and former employees. The Organization has always met its pension obligations, and carefully oversees and monitors its plans to ensure that it will continue to meet its obligations in the future.”
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Text of the complaint is at http://www.bloomberglaw.com/public/document/Miller_v_Bon_Secours_Health_System_Inc_et_al_Docket_No_116cv01150.
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