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Supreme Court rules unanimously in favor of faith-affiliated health care systems

Facade of US Supreme court in Washington DC on sunny day
Facade of US Supreme court in Washington DC on sunny day
Steve Heap, Adobe Stock

SALT LAKE CITY — Religiously affiliated health care systems will continue to be exempt from federal retirement-benefit regulations, after a unanimous Supreme Court decision on Monday upheld the broad definition of "church" that has guided agencies like the Internal Revenue Service for the last 37 years.

The ruling, written by Justice Elena Kagan, overturned three federal appellate courts in finding that pension plans maintained for faith-based hospitals can be viewed as "church plans" under the Employee Retirement Income Security Act even when the pensions aren't established by a church. The "church plan" designation allows employers to avoid paying premiums to the government, but also keeps them from accessing the government-insured pension safety net.

Recounting the language of the Employee Retirement Income Security Act and a 1980 amendment to it that expanded what counts as a church plan, Kagan noted that the case hung on slippery semantics.

The act states that church plans, or plans "established and maintained for its employees … by a church," can also be plans "maintained by an organization … the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits … for the employees of a church."

"That is a mouthful, for lawyers and non-lawyers alike," Kagan wrote.

However, it's fair to conclude that Congress didn't intend to limit church plans to plans established by churches, as a group of hospital employees argued, and lower federal courts confirmed, in Advocate Health Care Network v. Stapleton, Kagan wrote. Doing so would have forced federal agencies to define religion, a problematic task.

"A church-establishment requirement necessarily puts the IRS in the business of deciding just what a church is and is not," she said.

Justice Neil Gorsuch, confirmed in April, did not participate in the case because it was argued before he was on the Supreme Court.

Becket, a religious liberty law firm that filed an amicus brief in support of the hospitals, celebrated Monday's ruling, arguing that it keeps lawmakers out of the business of religion.

"The Supreme Court got it right," said Eric Rassbach, deputy general counsel at Becket, in a statement. "Churches — not government bureaucrats and certainly not ambulance chasers — should decide whether hospitals are part of the church."

However, others decried the ruling, explaining that health care systems shouldn't be able to use loose ties to religion to avoid financial accountability.

"The court’s ruling will leave religious employers uniquely exempt from a longstanding federal regulation and religious employees without the protection of a much needed financial safeguard. We cannot allow religious belief to become a free pass from any laws an organization finds inconvenient or burdensome," said Larry Decker, executive director of the Secular Coalition for America, in a statement.

Justice Sonia Sotomayor, although agreeing with her fellow justices' interpretation of the Employee Retirement Income Security Act, shared similar concerns in her concurring opinion. Congress likely didn't anticipate the size of today's religiously affiliated health care systems when they crafted the broader definition of church plans in 1980, she wrote.

"It is not at all clear that Congress would take the same action today with respect to some of the largest health-care providers in the country," Sotomayor said.

The three hospital systems involved in the case — Advocate Health Care Network, Saint Peter's Healthcare System and Dignity Health — employ around 100,000 people, according to The Associated Press. All told, around a million people across the country work for hospital networks exempted from the act's regulations.

The success and reach of faith-related hospitals have made them vulnerable to legal challenges, a phenomenon explored recently by America magazine. Groups like the American Civil Liberties Union are challenging whether Catholic health systems have the right to live out the church's social teachings in the care they provide.

In other words, the Supreme Court's ruling on Monday settles only one battle in an ongoing war.