Plan members could keep more choices for resolving benefit disputes

The proposal would restrict when plan members and plan administrators can use arbitration agreements and other clauses that limit legal claims. These rules cover participants and beneficiaries bringing claims about an employee benefit plan or its benefits, including certain related legal claims. For a dispute that has not yet arisen, the text bars required arbitration and clauses that waive individual or group claims. After a dispute arises, an arbitration agreement or claim waiver is allowed only if the member was not pressured, received a clear paper notice of the right to refuse, had at least 45 days to review the final terms, and gave written consent. The text excludes arbitration agreements that the Labor Secretary finds came from genuine collective bargaining. The proposal would apply to disputes or claims arising on or after enactment, including when an older plan document contains a conflicting clause.

The text would require courts to decide whether a plan-related arbitration clause can be enforced, and would require courts to review most plan benefit decisions from the start. The court-review rule covers plan benefit decisions and interpretations in cases under the cited federal benefits law; it does not cover multiemployer plans. The text excepts multiemployer plans from the rule requiring review of benefit decisions from the start. These provisions would apply to disputes or claims arising on or after enactment.

Plans, employers, plan sponsors, and plan administrators would have to follow the restrictions when making agreements with members. The covered people and organizations include plans, plan sponsors, employers, and people hired to run or administer a plan. A person would not be treated as violating the rules solely because plan documents have not yet been updated if they follow the rules in practice during that period. The proposed rules would take effect on enactment. A person would not be treated as violating them for outdated plan documents until after the first plan year beginning at least one year after enactment, if the person follows the rules in the meantime.