The Employment Retirement Income Security Act of 1980 was a logical attempt to structure and organize employee retirement plans to take pressure off social security, improve employee confidence sufficiently to encourage savings, and to regulate the tax sheltered nature of retirement savings.  Like all federal mandates that are also entangled with the federal income tax it is complicated and regulations it spawned were more so.

From inception ERISA exempted churches.  Church employers could create less regulated employment retirement plans.  The question then became whether para-church organizations could do so.  In Medina v Catholic Health Initiatives, Slip Op. (10th Cir. 2017), the United States Court of Appeals for the Tenth Circuit affirmed a Colorado trial court.  The question was whether Catholic Health Initiatives (“CHI”), a para-church organization of the Roman Catholic Church was a “principal-purpose organization” that would be exempt from ERISA.  CHI operated 92 hospitals, had 90,000 employees in its retirement plan, and the plan had $3 billion in assets.  While the historic connection between churches and hospitals is becoming lost in the mists of time, it remains, and many hospitals in existence would not have existed in the author’s life time had no church stepped up to found them.  But, in the post-modern era, the church hospitals, those that have not been bought or replaced by secular ownership, have grown to proportions that obscure the roots.  Because of the size of these institutions, they must be managed by modern methods and that tends to make them look less like para-church organizations.  Nevertheless, the 10th Circuit upheld the ruling that CHI was a para-church organization, i.e., a principal-purpose organization, and therefore, exempt from ERISA.

The opinion omits a discussion of why the Plaintiff was aggrieved by an employee retirement plan that was not subject to ERISA.  The Plaintiff sought class action status so the compliant had to be the same for many participants to meet the numericity requirement.

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