The Freedom From Religion Foundation has weighed in on two federal court cases that deal with large companies taking advantage of an exemption to retirement plan regulations for churches. In amicus briefs, FFRF makes the unique argument that the "church plan exemption" itself is unconstitutional under the First Amendment because it treats churches preferentially.
The Employee Retirement Income Security Act (ERISA) regulates retirement plans, but exempts church plans from requirements such as paying insurance premiums, meeting minimum funding standards, and disclosing funding levels to plan participants.
In several similar cases around the country, plaintiffs who work at religious health facilities, such as New Jersey's Saint Peter's Healthcare System, filed class-action suits against their employers for claiming the church plan exemption. These large non-profit hospital systems have been able to contravene ERISA and underfund employees' retirement plans by claiming the church exemption.
The plaintiffs argue the employers are not churches, and are not operated or funded by religious organizations, so their employers should not be able to claim the church plan exemption.
FFRF takes the argument further in a brief submitted to the Third Circuit Court of Appeals on Monday and one submitted today to the Seventh Circuit. FFRF says that the problem isn't just that large companies are claiming this church plan exemption, it's that the exemption exists at all.
FFRF argues the church plan exemption is unconstitutional because it "advances religion by giving churches financial and regulatory freedoms not available to similarly situated secular organizations." This special treatment is not necessary, says FFRF, and only serves to give religious organizations a benefit that nonreligious organizations cannot get, which violates the Establishment Clause.
The AARP also filed an amicus brief in support of the plaintiffs at the Third Circuit, and points out that five of the top ten largest healthcare systems in the nation are multi-million dollar corporations that fail to operate their pension plans in compliance with ERISA, claiming they are exempt church plans.
Americans United for Separation of Church and State and the American Civil Liberties Union also filed a joint brief supporting the Third Circuit plaintiffs, as did the Pension Rights Center.
The plaintiffs won at the lower courts in both cases. Kaplan v. Saint Peter's Healthcare System, No. 3:13-CV-02941 sits at the Third Circuit, while Stapleton v. Advocate Healthcare Network, No. 1:14-CV-01873 awaits a ruling at the Seventh Circuit.
FFRF thanks legal extern Jarvis Idowu for researching and drafting FFRF's amicus briefs.