Predispute Mandatory Arbitration Agreements and the New ERISA Claims Procedure Regulations

Article by Ethan Lipsig and Kimberley A Frailey

In our August 2002 Client Alert entitled Regulating ERISA Claims Procedures: New Rules for Handling Benefit Claims, we explained that the chances of defeating most ERISA lawsuits can be greatly enhanced if a plan’s claims procedure complies with the new ERISA claims procedure regulations and it is used effectively. Employers whose employees have signed predispute mandatory arbitration agreements that, among other things, require them to arbitrate health and disability plan claims may find it hard to comply with the new regulations because the regulations take the position that health and disability plans that mandate the final and binding arbitration of claims have "unreasonable" claims procedures, and the DOL has not issued any guidance on the issue of whether omnibus arbitration agreements that also apply to health and disability plan claims are "unreasonable." This Client Alert explores alternatives for addressing that concern.