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Ascension Health Deemed a Church Plan in Settlement

By NTSA Net Staff • May 18, 2015 • 0 Comments
A federal district court judge in Michigan has given preliminary approval to a settlement of the Ascension Health class action litigation. Under the terms of the settlement in Overall v. Ascension Health, the nonprofit Catholic health care system remains able to avail itself of the church plan exemption under ERISA.

Judge Avern Cohn of the U.S. District Court for the Eastern District of Michigan issued an order granting preliminary approval to a settlement in the case and to notice procedures, as well as confirming a final settlement hearing.

In the case, Marilyn Overall sued multiple defendants associated with pension plans provided by Ascension Health Alliance, which operates hospitals throughout the United States through subsidiaries, claiming that defendants violated ERISA. The key issue was whether the pension plans qualify as church plans and thus are exempt from ERISA.

Judge Cohn on May 13, 2014 granted Ascension Health’s motion to dismiss the case, holding that a plan does not need to be established by a church in order to qualify as a church plan. He also held that the plans in question are church plans as a consequence of the management structure of Ascension Health Alliance, which is controlled by and associated with the Roman Catholic Church.

Overall appealed to the 6th U.S. Circuit Court of Appeals. The parties reached a settlement and filed a motion to suspect the appeals court proceedings and send the case back to the district court so it could approve the settlement. This the court did on May 11.

The final settlement hearing will be held on Sept. 17.

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