ERISA Litigation Roundup: Legislation Update — House Passes ERISA Bill to End Arbitration and Firestone

Earlier this year we reported on the “Employee and Retiree Access to Justice Act,” which sought to render arbitration and class action waiver provisions, and discretionary authority for plan administrators, in ERISA plans unenforceable. On September 29, 2022, the U.S. House of Representatives passed the Mental Health Matters Act (the Act) — which encompasses the Employee and Retiree Access to Justice Act.

The Act seeks to amend ERISA’s civil enforcement provision (ERISA § 502) to make any arbitration provisions in ERISA plans invalid and unenforceable, except that arbitration would be allowed if the participant or beneficiary consented in accordance with particular rules (including a paper notice and a 45-day waiting period). The Act also prevents an ERISA plan from requiring a person to agree to arbitration as a condition for participation in the plan.

Additionally, the Act would eliminate discretionary authority for claim administrators and allow only de novo review of a benefit claim in court. As we previously reported, this would create a huge shift in how ERISA claims are currently litigated, resulting in increased costs for employers offering employee benefits.

The Act now heads to the Senate, where its fate is uncertain. The Faegre Drinker benefits and executive compensation team will continue monitor this Act and provide updates.