SSM Health in Cross Hairs of Latest Church Plan Lawsuit

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By Jacklyn Wille

April 5 — The recent influx of lawsuits challenging hospitals' pension funding levels doesn't appear to be slowing down, with the latest one accusing SSM Health Care Corp. of a $723 million pension shortfall in violation of ERISA.

The lawsuit is the third class action filed in as many weeks that takes aim at a religious health-care company's decision to treat its pension plan as a church plan exempt from federal funding requirements. More than a dozen similar lawsuits have been filed over the past three years, with two federal appellate courts ruling against the hospitals.

According to the instant complaint, filed April 4 in the U.S. District Court for the Eastern District of Missouri, SSM's failure to comply with the Employee Retirement Income Security Act's pension funding and disclosure rules is jeopardizing the retirement savings of thousands of workers.

Wave of Litigation

The lawsuit against SSM follows a nationwide litigation effort dating to 2013 and led by plaintiffs' firms Cohen Milstein Sellers & Toll PLLC and Keller Rohrback LLP. After a lull in new filings in 2015, the wave of litigation picked up steam last month with a pair of complaints against two Cincinnati hospitals affiliated with the Catholic Church .

The district judges hearing such challenges have been evenly split, issuing decisions in favor of Ascension Health, Catholic Health Initiatives and Trinity Health Corp. Other rulings have gone against Saint Peter's Healthcare System, Advocate Health Care Network and Dignity Health.

Despite disagreement among district judges, the hospitals lost both cases that went before federal appellate courts. In 2015, the Third Circuit barred Saint Peter's from using ERISA's church plan exemption . The Seventh Circuit followed suit in March 2016 in a case against Advocate .

In February, the Ninth Circuit heard arguments in a similar case against Dignity Health and is expected to issue the next appellate decision on this topic. The Tenth Circuit recently agreed to hear a similar appeal, and cases are pending in district courts within the Second, Sixth and Eleventh circuits.

The complaint against St. Louis-based SSM is noteworthy for bringing the Eighth Circuit into the fray. That court is uniquely positioned among the circuits, because the only significant decision interpreting ERISA's church plan exemption prior to this litigation effort was issued by a district judge within the Eighth Circuit in 2011 (Thorkelson v. Publ'g House of the Evangelical Lutheran Church in Am., 764 F. Supp. 2d 1119, 50 EBC 2154 (D. Minn. 2011) ).

Dysart Taylor Cotter McMonigle & Montemore PC, Kessler Topaz Meltzer & Check LLP and Izard Nobel LLP filed the lawsuit against SSM.

SSM employs more than 31,000 employees and operates 20 hospitals and 62 outpatient care sites across Illinois, Missouri, Oklahoma and Wisconsin.

SSM didn't immediately respond to Bloomberg BNA's inquiry about the lawsuit.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com