The Supreme Court again tackled ERISA in a wordy opinion based more on a “canon of construction” (interpretive tools Courts use to analyze statutes and regulations and glean Congressional intent) than substantive employee benefits law. The Court’s holding in Dignity Health v. Rollins clarifies a split amongst the federal Courts of Appeals regarding ERISA’s reach into church-affiliated benefits plans.

Generally, ERISA obligates private employers offering pension plans to adhere to an array of rules designed to ensure plan solvency and protect plan participants. These sometimes costly rules do not apply and have never applied to a “church plan”, or an employee benefit plan “established and maintained” for church employees.  In 1980, Congress expanded the definition of “church plan” to include church-affiliated plans that have the primary purpose of funding or administering benefits for church employees.  In this case, non-profits that run hospitals and other healthcare facilities held themselves out a church-affiliated plans exempt from ERISA. The question presented to the Supreme Court was this: does a church-affiliated plan need to have been established by a church to qualify as a “church plan” (and therefore exempt from ERISA’s reporting, financial, and disclosure obligations, among other requirements)? Using a common tool of statutory interpretation which states that Congress means every word it includes in its statutes, the Court ruled in favor of the church-affiliated plans.  When congress amended ERISA in 1980 it meant to include non-profit healthcare entities like Dignity Health in the definition of a plan “established and maintained” by a church, whether or not they were established by a church.  The result is that non-profit healthcare entities that affiliated with churches will continue to be exempt from ERISA’s rules and regulations that typically apply to other benefit plans.

Find the opinion here.