Constitution Daily

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Supreme Court steps into new health care dispute

September 21, 2016 by Lyle Denniston


The Supreme Court, acting with no sign of dissent, moved on Wednesday to interrupt at least temporarily a series of lower court rulings that would bar employee-benefits companies from claiming that they operate “church plans” and thus are exempt from federal regulatory laws — including the one providing birth control access.  The Court’s order in Dignity Health v. Rollins (docket 16A241) is here.

640px-Inside_the_United_States_Supreme_CourtThe order blocks one federal appeals court ruling against such a company, until the  Supreme Court can decide whether to hear that firm’s pending appeal.  The  Court could decide within a matter of weeks whether to take on the controversy, which could affect the job benefits of many thousands of workers.

Some three dozen lawsuits have been filed across the country against non-profit companies that are affiliated with religious organizations — often, the Catholic Church — and that provide health and pension benefits to workers in hospitals and other facilities that they run and for their own staff employees.

On one side of the dispute is the claim that Congress has never intended to regulate the benefit programs of religiously affiliated plan operators. The other side is the claim that Congress could not have intended a broad exemption because that would be unconstitutional favoritism of religiously affiliated companies.

So far, three federal appeals courts have ruled that those firms must comply with the major federal law controlling employee benefit plans — the Employee Retirement Income Security Act of 1974 (or ERISA) — because their plans do not qualify as exempt “church plans.”  The Affordable Care Act, the broad new law regulating health insurance, exempts “church plans” that are under ERISA from its birth control mandate that other employee benefit plans must obey.

This controversy is moving forward in a broad group of lower federal courts.  Three appeals have already reached the Supreme Court, including the one involved in the Court’s action Wednesday — an appeal by Dignity Health, formerly named Catholic Healthcare West, that has been ranked as the first largest healthcare provider in the nation.

At issue in all of the cases is the reach of the ERISA, and, in particular, what kind of benefit plan can be exempt as a “church plan.” In the three appeals court rulings so far, each has decided that the exemption is available only to a benefit plan that was created in the first instance by a church or a group of churches.   Dignity Health and other firms that have been challenged have ties to religious organizations, but were not set up originally by a church or group of churches.

Lawyers for Dignity Health have contended in court filings that two other appeals courts have ruled in their favor, but that point is disputed by lawyers for the challengers, who contend that what qualifies as a “church plan” was not at issue in those two courts.

The Supreme Court on Wednesday gave no reason for blocking a ruling against Dignity Health by the U.S. Court of Appeals for the Ninth Circuit.  Usually, the Court will not take such an action unless there is a fair chance it will later agree to decide the issue at stake, and granting review often depends upon whether the lower courts are divided on the legal question.

The cases around the country have been between present and former employees of the religious affiliated plan providers, and the plans, but women’s rights groups have been taking an active interest in the controversy because they view it as a potential threat to health benefits for women workers covered by plans claiming to be exempt from ERISA.

The Court said that its order postponing the appeals court ruling against Dignity Health will remain in effect pending the Justices’ action on the company’s petition for review (docket 16-258).   If review is granted, the order will remain intact until the case is decided.  If review is denied, Wednesday’s order will be lifted.

Among the three cases already pending at the Court, Dignity Health’s is not the most recently filed.  The case that could be the first ready for the Court to consider involves Advocate Health Care Network, affiliated with the Lutheran Church and the United Church of Christ.  The Network operates 12 hospitals and more than 250 other healthcare facilities in Illinois.   Its case (docket 16-74), like the one involving Dignity Health, focuses on the scope of its plan’s pension benefits.

The third pending case involves Saint Peter’s Health System, controlled by the Catholic Diocese of Metuchen, N.J., which operates a hospital in New Brunswick, N.J.  Its pension plan is at the center of that case (docket 16-86).

It could be that the Court will wait until the papers are filed in all three cases, and then decide which, if any, to accept for review.  Combining them, however, is not required.

Legendary journalist Lyle Denniston is Constitution Daily’s Supreme Court correspondent. Denniston has written for us as a contributor since June 2011. Denniston has covered the Supreme Court since 1958. His work also appears on, where this story first appeared.

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