HSHS faces pair of pension lawsuits - SCOTUS to hear challenge to religious exemption in related cases

By Patrick Yeagle

Hospital Sisters Health System in Springfield faces a pair of lawsuits over alleged pension underfunding, but the cases are really about challenging an exemption to a federal pension law which religious hospitals nationwide enjoy.

The U.S. Supreme Court today announced it will hear three separate but related cases against different religious health care providers based in Illinois, New Jersey and California.

Holly Mollet, a former employee of Hospital Sisters Health System, filed a lawsuit against the Springfield-based health care group in September, alleging HSHS had more than $410 million in unfunded pension assets in 2012. Mollet alleged that HSHS had violated the federal Employee Retirement Income Security Act, known as ERISA. That law requires companies to maintain specific funding levels in their pension systems, but it exempts "church plans," which is currently interpreted to include any religious group. Mollet contends that the church plan exemption applies only to churches themselves - not religious hospitals.

A separate lawsuit against HSHS was filed in October by former HSHS employees Mary Holcomb and Mary Grovogel, making substantially similar allegations. The two cases were consolidated in November by U.S. District Court Judge Sue Myerscough in Springfield.

A spokeswoman for St. John’s Hospital in Springfield, part of Hospital Sisters Health Systems, couldn't comment for this story, but HSHS has communicated to employees that its pension plan is not at risk of underfunding. In an Oct. 5 memo from David Beach, chief people officer for HSHS and Michael Yost, director of compensation and benefits, HSHS told employees that lawsuits against it and other Catholic healthcare systems are "a coordinated attack on religious based health entities." The memo assured employees that the pension system is secure and urged employees to bring forth any questions or concerns.

Separate lawsuits with similar allegations were previously filed against Illinois-based Advocate Health Systems, New Jersey-based St. Peter’s Healthcare System and California-based Dignity Health. Those lawsuits were allowed to proceed in court, and the hospital systems involved are now asking the U.S. Supreme Court to throw them out. The high court agreed to take all three cases, although a hearing date has not been set.

Attorneys for Hospital Sisters Health System have not filed an answer to the complaints against the system for the consolidated case pending in Springfield. With the Supreme Court agreeing to weigh in, it's likely that case will be postponed until the Supreme Court rules.

Contact Patrick Yeagle at [email protected].

This article has been edited to clarify that the lawsuits are against HSHS, not St. John's Hospital in Springfield, part of the HSHS family.


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