Supreme Court will decide if religious organizations qualify for IRS church exemption.
Today the US Supreme Court heard a trio of lawsuits on pension plans at Christian hospital systems. So far, the panel of justices seems torn over whether religiously affiliated employers fall under federal requirements for pension benefits.
Churches are exempt from the US Employee Retirement Income Security Act (ERISA). But the current cases challenge whether such standards apply to employers that are merely affiliated with churches: hospitals, schools, and daycares, for example.
Employees who filed the suits argue that the hospitals should comply and, in some cases, pay billions to make up for benefits their workers have missed out on.
The Supreme Court’s eventual ruling on the issue, which Religion Clause picked as the No. 4 church-state development of 2016, will impact dozens of similar cases as well as the budgets of a significant slice of America’s healthcare system. (For example, the American Civil Liberties Union found that last year, Catholic hospitals alone provided 1 in 6 patient beds available.)
The hospitals involved in the litigation include Dignity Health, which operates Catholic hospitals and employs 60,000 people in 20 states; Advocate, which is affiliated with the Evangelical Lutheran Church in America and the United Church of Christ and employs 33,000 people in Illinois; and Saint Peter’s Health Care System, which is affiliated with the Catholic Church and located in New Jersey, according to Bloomberg News.
The Internal Revenue Service has allowed the Christian hospitals—and hundreds of other religious affiliated institutions—to claim ERISA exemptions. Because of decades of federal approval, the institutions believed they were “proceeding in good faith with the assurance of …
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