S. 5605: Employee and Retiree Access to Justice Act

This bill would change rules under the Employee Retirement Income Security Act of 1974 (ERISA) for disputes involving employee benefit plans, such as retirement plans and health plans covered by ERISA.

What it would do

• Limits mandatory arbitration: A plan could not require participants or beneficiaries to arbitrate a dispute before a dispute exists. In other words, people could not be forced in advance to give up their right to go to court over plan-related claims.
• Restricts post-dispute arbitration agreements: An arbitration agreement made after a dispute arises would only be valid if it was:
  • not required or coerced,
  • not a condition of getting plan participation, benefits, or certain work-related benefits,
  • explained in a paper notice that clearly says the person can refuse without retaliation,
  • accepted only after a 45-day waiting period, and
  • affirmatively agreed to in writing.
• Bars waiver of legal rights: A plan-related agreement could not make someone promise, before or after a dispute, not to bring or join individual, class, collective, or representative claims that are otherwise allowed under ERISA.
• Limits class action waivers: Provisions that prevent people from joining class or collective claims related to a plan would generally be unenforceable.
• Restricts discretionary clauses: For most plans, agreements could not give a plan administrator or other person broad discretion that would require a court to use anything other than de novo review when deciding benefit disputes. In plain terms, courts would not have to defer to the plan’s interpretation of the rules in those disputes.
• Decides disputes about enforceability in court: A court, not an arbitrator, would decide whether an arbitration clause covering ERISA disputes is valid and enforceable.
• Applies only when a dispute has actually arisen: For these purposes, a dispute would be treated as arising when the person knows of the breach or violation that gives rise to the claim.
• Allows Labor Department regulations: The Secretary of Labor could issue rules to carry out the law, including notice requirements.

Who would be covered

The bill would apply to ERISA-covered plans, plan sponsors, employers, and people or companies that administer or operate those plans.

When it would take effect

The changes would generally take effect on the date the bill is enacted and would apply to disputes or claims that arise or accrue on or after that date, even if an older plan document still contains conflicting language. There is a limited grace period for updating plan documents: people would not be treated as violating the new rules just because their documents have not yet been updated until after the first plan year that begins on or after one year after enactment, so long as they follow the new rules in practice during that time.

Relevant Companies

• UNH — UnitedHealth Group could be affected because the bill could change how ERISA plan disputes involving health benefits are handled.
• HUM — Humana could be affected through its administration of employer-sponsored health plans and related ERISA disputes.
• CVS — CVS Health could be affected through its benefits administration and health plan operations.
• CI — Cigna could be affected because it administers health and employee benefit plans subject to ERISA.
• ELV — Elevance Health could be affected by changes to dispute resolution and review standards for ERISA plans.
• BLK — BlackRock could be affected indirectly if retirement plan administration and related legal processes change.
• FMCC — Plan administrators and benefits managers may be affected; however, direct impact on listed financial firms would depend on their ERISA plan operations.