Advocate Health Care Network v. Stapleton

In this consolidated case, employees of religiously affiliated hospital systems sued their employers, alleging that the hospital pension plans were severely underfunded and violated the Employee Retirement Income Security Act (ERISA). The defendant health care networks argued that their plans qualified as "church plans" exempt from ERISA's funding and insurance requirements, even though they were established and maintained by internal hospital committees rather than directly by a church. The Supreme Court ruled 8-0 on June 5, 2017, that a pension plan maintained by a principal-purpose organization controlled by or associated with a church is exempt from ERISA, regardless of who originally established it. The decision reversed lower court rulings that had narrowed the exemption.

The Supreme Court held unanimously that the ERISA church plan exemption applies to plans maintained by church-affiliated organizations whose principal purpose is administering or funding the plan, regardless of whether a church originally established the plan. The judgments of the lower courts were reversed and the cases remanded.

Whether the church plan exemption under ERISA requires that a pension plan be originally established by a church itself, or whether plans established and maintained by church-affiliated organizations also qualify.

The ruling preserved the ERISA-exempt status of pension plans covering hundreds of thousands of employees at religiously affiliated hospitals, shielding billions of dollars in plan assets from federal oversight. It raised concerns about the retirement security of workers but affirmed the broad scope of religious exemptions under federal law.