A U.S. district court judge in Cincinnati has approved a settlement in the class action lawsuit challenging Mercy Health’s Defined Benefit Church plan status.
The case stems from consolidated class actions filed in March 2016 that were suspended in January 2018 while the parties worked on a settlement. The settlement, approved on Wednesday, received preliminary approval in August.
The plaintiffs, participants in five defined benefit plans that include more than two dozen small healthcare company plans taken over by Mercy Health, challenged the plan’s exemption from the Employees Retirement Income Security Act in because of its affiliation with the Roman Catholic Church. According to the complainants, this exemption violated ERISA’s rules on reporting and disclosure, minimum funding and fiduciary obligations.
Cincinnati-based Mercy Health has denied that the exemption was misused, arguing that it is part of the Roman Catholic Church, court documents show.
Mercy Health spokeswoman Maureen Richmond said in an emailed statement: “While the law is on our side and our plans are well funded, we are happy to have agreed to a settlement for end a litigation that would result in expense for our ministry. This settlement ends the litigation over the “church plan” and maintains the legal status of our pension plans as church plans. “
The settlement requires Mercy Health to guarantee accrued benefits for plan members for nine years. If there is a merger within those nine years, plan members will be entitled to the same or better benefits under the settlement.
Mercy Health will also pay $ 625,000, or $ 450 each, to certain class members who received voluntary lump-sum distributions from several of the plans from January 2011 to February 2018.
The terms of the settlement agreement are subject to change if the Internal Revenue Service or a court determines that the plans do not qualify for the church plan exemption, if the Roman Catholic Church disassociates itself from the sponsors. plan or if Mercy Health chooses ERISA coverage. for plans, according to the settlement agreement.
Comments are closed.