Sen. Smith, Rep. DeSaulnier Introduce Legislation to Limit Benefit Denials in Pension and Health Care Plans

WASHINGTON – Today, U.S. Senator Tina Smith (D-MN) and Congressman Mark DeSaulnier (D-CA-11) introduced legislation to protect workers’ and retirees’ rights to retirement and health benefits under employer-sponsored plans.

“I believe that access to a court is a fundamental right.  But too often, workers and retirees are being wrongly denied the benefits they’ve earned or forced to jump through hoops to access benefits they were promised,” said Senator Smith. “It’s outrageous that employers are able to deny – often unilaterally – workers the right to appeal a claim denial in court, or impose huge burdens that make it nearly impossible to win a suit for wrongly denied benefits.  This can leave workers and retirees struggling to make ends meet or facing massive medical bills on their own.  Our legislation would put a stop to these unfair practices and restore the rights of workers and retirees.”

“Forced arbitration and class action waivers are just some of the many ways bad actor employers get away with systemic denial of important benefits,” said Congressman DeSaulnier. “As Chair of the House Committee on Education and Labor’s Subcommittee on Health, Employment, Labor and Pensions, I am proud to introduce this legislation that would take those tools out of employer’s toolboxes and help ensure robust health benefits for retirees, including mental health benefits, so that they can live with dignity and financial security in retirement.” 

The bill—the Employee and Retiree Access to Justice Act of 2022—furthers the longstanding promise of the Employee Retirement Income Security Act (ERISA) to ensure workers and their families are afforded “appropriate remedies, sanctions, and ready access to the Federal courts.”

An increasing number of individuals enrolled in ERISA-covered retirement and health plans are impacted by plan provisions and employment agreements that require the arbitration of claims that arise from improper benefit denials or fiduciary breaches.  These forced arbitration agreements deny access to the courts and are often combined with class action waivers, which prohibit plaintiffs from joining together to correct systemic wrongdoing that harms many individuals, often across multiple plans. 

Further, plan documents frequently include “discretionary clauses” that modify the standard of review for individuals who challenge benefit denials in court. Such provisions limit the evidence that may be presented and require courts to defer to the decision of the entity—often a health insurance company—that denied the individual’s benefit in the first place. The recent application of the deferential standard by the United States Court of Appeals for the Ninth Circuit in Wit v. United Behavioral Health resulted in the reversal of a lower court decision that protected the mental health benefits of tens of thousands of individuals.

The Employee and Retiree Access to Justice Act of 2022 would strengthen workers’ access to the retirement and healthcare benefits they deserve by:

  • Deeming forced arbitration clauses, class action waivers, representative waivers, and discretionary clauses unenforceable with respect to ERISA and common law claims relating to benefits;
  • Prohibiting the inclusion of such provisions in plan documents; and
  • Prohibiting retaliation against individuals who decline to enter into forced arbitration agreements.