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Robert L. Abramowitz, Esq.
Morgan, Lewis & Bockius.
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
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2000-05A
ERISA Sec. 3(33)
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Dear Mr. Abramowitz:
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This responds to your correspondence on behalf of the Catholic Health
System. You request an advisory opinion concerning whether certain employee
benefit arrangements described in your letter are “church plans” within
the meaning of § 3(33) of Title I of the Employee Retirement Income
Security Act of 1974, as amended (ERISA).
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You represent that the Catholic Health System (a.k.a. Mercy Health System of
Western New York), was incorporated by the Buffalo Regional Community of the
Sisters of Mercy of the Americas, a religious congregation of women within
the Roman Catholic religious order known as the Religious Sisters of Mercy.
You describe retirement and welfare benefit arrangements (collectively, the
Plans) of three health institutions that are participating members of the
Catholic Health System, namely, Mercy Hospital of Buffalo, New York (Mercy
Hospital); Mercy Home Care of Western New York (Mercy Home Care); and
Kenmore Mercy Hospital. The benefit arrangements that are the subject of
your request include the following: for Mercy Hospital, a pension plan, two
health plans, a life insurance benefit arrangement, disability benefit
arrangements, and a flexible spending account plan; for Mercy Home Care, a
tax-sheltered annuity program and two health plans; and for Kenmore Mercy
Hospital, a pension plan, a tax- sheltered annuity program, a health plan, a
life insurance benefit arrangement, and a flexible spending account plan.
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You submitted to the Department of Labor documentation about the Plans,
including private letter rulings issued by the Internal Revenue Service
(IRS) concerning the Plans’ status under § 414(e) Internal Revenue Code
(Code). In those private letter rulings, the IRS concluded, based on
representations provided by Mercy Hospital, Mercy Home Care and Kenmore
Mercy Hospital, that the Plans constituted church plans within the meaning
of Code § 414(e). As you know, Code § 414(e) defines the term “church
plan” using language that is virtually identical to ERISA § 3(33).
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To the extent that the Plans are currently operated in substantially the
same manner as was described to the IRS for purposes of obtaining private
letter rulings, we see no reason to disagree with the conclusion reached by
the IRS concerning the Plans’ status. Accordingly, we conclude that, to
the extent the Plans’ private letter rulings accurately describe the
structure and operations of the Plans, the Plans meet the church plan
definition in § 3(33) of ERISA. Section 4(b)(2) of ERISA therefore excludes
the Plans from coverage under Title I of ERISA, provided that, as you
represent, none of the Plans, if entitled to do so, has made any election
pursuant to Code § 410(d). In light of the view expressed above regarding
the status of the Plans as “church plans” under Title I of ERISA, it is
not necessary for us to determine whether each of the Plans would be an
“employee benefit plan” within the meaning of ERISA § 3(3).(1)
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This letter constitutes an advisory opinion under ERISA Procedure 76-1.
Accordingly, it is issued subject to the provisions of the procedure,
including section 10 thereof relating to the effect of advisory opinions.
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Finally, we note that benefit booklets included in your submission state
that ERISA gives certain rights to participants of the Plans and imposes
duties on fiduciaries of the Plans. We believe it is important that
participants and beneficiaries of the Plans have accurate information
concerning the law that governs the plan and the conduct of plan
fiduciaries. We expect that appropriate actions will be taken to remove all
erroneous references to rights and status under Title I of ERISA from plan
documents and literature and that the Plans will promptly notify affected
participants and beneficiaries that Title I of ERISA does not apply to the
Plans.
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Sincerely,
John J. Canary
Chief, Division of Coverage, Reporting & Disclosure
Office of Regulations and Interpretations
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The view expressed in this opinion
applies solely to the above-named health institutions' employee
benefit arrangements, as described in this letter, and should not be
read as expressing any view on the “church plan” status of any
other benefit arrangement, including benefit arrangements offered by
associations of hospitals and benefit arrangements of affiliates or
successors of the above-named health institutions.
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