Dignity Health pays $ 100 million and makes mandatory retirement contributions in comparison
Dignity Health, San Francisco, will pay $ 100 million to resolve a longstanding class action lawsuit that challenges its status as a church plan.
The settlement, due for final approval on August 1, sees Dignity Health contributing $ 50 million in 2020 and $ 50 million in 2021. It also requires mandatory five-year funding for the plan and the payment of $ 1.49 million to a related group of eligible participants, according to filings filed in the US District Court in San Francisco on June 27.
The settlement notice filed by plaintiffs states that Dignity Health has made previous voluntary contributions to the plan, including $ 271 million in plan funding decisions. CommonSpirit Health is “unknown”.
Actuarial estimates for the Dignity Health Project required contributions of $ 162 million in 2021, $ 170 million in 2022, $ 178 million in 2023, and $ 187 million in 2024, so the court record.
The complaint in Rollins et al. vs. Would Health et al. was first filed in April 2013 by plaintiffs seeking more than $ 2 billion in lost pension contributions and other compensation claims. The lawsuit challenged, among other things, interpretations by the IRS and the Department of Labor that allowed Dignity Health Network hospitals, which have church associations of varying degrees, to be exempt from the Employee Retirement Income Security Act.
By December 2013, the district court ruled that Dignity Health was not eligible for an ERISA church plan exemption because only one church can support and maintain a church plan. After various petitions, this decision was upheld by the 9th US Court of Appeals in San Francisco in July 2016.
In August 2016, Dignity Health called on the US Supreme Court to review the 9th District decision and the case was consolidated with two similar church plan challenges against the Advocate Health Care Network and St. Peter’s Healthcare System.
The Supreme Court ruled in June 2017 that pension plans do not have to be established by a church in order to be exempt from ERISA, as long as they are controlled or affiliated with a church. The plaintiffs then filed an amended class action lawsuit in the 9th District in November 2017.