Arbitration provisions are a common benefit for non-subscribers and will typically be upheld in regards to claims such as negligence or premise liability. However, they are generally found invalid with regard to claims for wrongful denial of benefits because they conflict with ERISA (Employment Retirement Income Security Act) regulations.
Even so, employers are still given wide latitude of protection under ERISA with how they manage their injury plan and benefits. While a party has a right to bring a civil action under section 502(a) of ERISA if they dispute a claim that has been denied in whole or in part, they still must first exercise all of their remedies available under the non-subscriber plan, which usually provides deadlines and appellate procedures for requesting reconsideration of a plan administrator’s decision.
And when an employer’s ERISA plan administrator determines that an employee’s claim for benefits is not valid or that the benefits should be discontinued, those factual determinations are always given significant deference and are reviewed by the courts only for abuse of discretion. Courts have held that an ERISA plan administrator abuses his or her discretion only where the decision is not based on any evidence, even disputable evidence. Thus, the employee has a very high hurdle to overcome in challenging a plan administrator’s decision as to applicability of benefits. For instance, if a doctor treating the employee under the employer’s injury plan opines the employee has healed in regards to any on-to-job injury or reached maximum medical improvement, that fact alone will typically suffice to show the plan administrator did not abuse his or her discretion in discontinuing benefits, even if the employee feels differently or obtains a second and conflicting medical opinion. It is only when a plan administrator fails to abide by plan terms or fails to give the terms proper legal interpretation that ERISA claims are generally supported. Thus, even without arbitration, an employer will often have grounds to get rid of ERISA claims early in a case through summary judgment or other dismissal procedures.