U.S. District Court Finds ERISA Does Not Apply to Hospital Employees

Tacoma, WA

U.S. District Court Judge Ronald B. Leighton ruled today that FR’s client, Edward Rinehart, an employee of Providence St. Peters Hospital, a division of Providence Health & Services (PH&S), is not subject to ERISA limitations which would have precluded his state law claims brought to seek redress for alleged mishandling of his disability claim by Life Insurance Company of North America.

Judge Leighton ruled that the long term disability (LTD) plan sponsored by PH&S is a “church plan” and that PH&S did not effectively elect to have the LTD Plan Governed by ERISA. This decision has important implications for employees with disabilities at all facilities run by PH&S.

PH&S was founded and continues to be sponsored by the Sisters of Providence, a religious order of the Catholic Church. PH&S includes 26 hospitals, more than 35 non-acute facilities, physician clinics, a health plan, a liberal arts university, a high school, approximately 45,000 employees and numerous other health, housing and educational services. The system office is located in Seattle, Washington.

The court’s decision permits Mr. Rinehart to pursue his state law claims including breach of the implied covenant of good faith and fair dealing. The decision will undoubtedly be relied upon by other LTD claimants with pending claims. To see a copy of the Judge Leighton’s decision, click¬†here.

Mr. Rinehart is represented by Ken Friedman and Lincoln Sieler of Friedman | Rubin.