Bogus 'government entity' claim by Atrium Health cheats employees on benefits, lawsuit says

Former Atrium Health employees have filed a federal class-action lawsuit against the Charlotte, N.C.-based, nonprofit system, charging that it incorrectly identifies as a government entity to exempt itself from legal protections for participants in the company's pension, 401(k) and healthcare plans.

The lawsuit — announced Nov. 19 by Cohen Milstein Sellers & Toll, the Chicago-based law firm representing the plaintiffs — claims this exemption threatens healthcare and retirement of more than 65,000 Atrium Health employees by decreasing the security of the system's retirement and healthcare benefits and forcing participants to pay more.

According to the firm, the lawsuit states Atrium claims to be a governmental entity as it relates to compliance with the federal Employee Retirement Income Security Act. The act establishes minimum guidelines for pension plans and health plans.

Former employees said Atrium Health claims the "government plan" exemption as it relates to the act, allowing the system's retirement and healthcare plans to participate in activities that would be barred for plans governed by the act.

"Atrium Health has jeopardized the well-being of its employees and their families for far too long," said lead plaintiffs' attorney Karen Handorf, partner at Cohen Milstein Sellers & Toll, and chair of the firm's employee benefits practice group. "Plainly and simply, Atrium Health is not nor ever has been a government entity. Atrium is a healthcare behemoth trying to get away with spending money to expand its operations rather than on its employees.

"We are confident that the court will hold Atrium accountable to its legal obligations and ensure the company protects participants in its retirement and healthcare plans."

As of Nov. 19, Atrium Health said that it had not received the lawsuit.

"Given that this was just filed in the court system, Atrium Health has not yet been officially served with this complaint," the system told Becker's. "When Atrium Health is served, we will review the document and at the appropriate time file an answer to the complaint with the court."

Access the full announcement of the lawsuit here.


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