End forced arbitration in ERISA
Recommendation
Congress should amend the Employee Retirement Income Security Act (ERISA) to prohibit ERISA plans from inserting forced arbitration provisions into plan policies that prevent consumers from using the courts to challenge wrongful coverage denials.
Background/summary
Forced arbitration provisions are a long-standing and widespread practice to prevent consumers from accessing the judiciary system to gain relief, forcing individuals to agree to a closed-door tribunal not subject to important legal safeguards.[1] While current ERISA regulations prohibit such provisions, plans may nonetheless seek to use them and argue that the Federal Arbitration Act overrides the regulations.[2] If these provisions become widespread and are deemed enforceable, they would have devastating consequences for Americans’ health coverage rights, including under the Mental Health Parity and Addiction Equity Act. This is because arbitration results are not public and cannot be used to change health plans’ widespread practices, which can affect large numbers of people – not only the claimant. Forced arbitration in ERISA plans threatens the civil rights of the nearly 150 million Americans covered by ERISA plans.[3] The Mental Health Matters Act, which includes a subsection to ban such provisions, passed the U.S. House in 2022.[4]
citations
1. The National Institute for Workers Rights. Ending Forced Arbitration In The Workplace. Last Accessed July 27, 2023.
2. Pathak, Radha, Stris, and Maher LLP. Mandatory Arbitration of ERISA Claims. American Bar Association. Last Updated May 10, 2021.
3. U.S. Department of Labor, Employee Benefits Security Administration. FY 2021 MHPAEA Enforcement Fact Sheet. Last Accessed July 27, 2023.
4. Mental Health Matters Act. H.R. 7780 (DeSaulnier), 117th Congress (2012-2022). Last Updated October 11, 2022.