Many judges in recent years have questioned the continuing validity of these special procedural requirements, including exhaustion of administrative remedies prior to suit, disallowance of jury trials, and remand of cases back to the administrator, noting that these requirements are not found in ERISA’s statutory language. Indeed, most of the procedural requirements for ERISA benefits cases, including limiting review to the administrative record, have been imposed by the courts, and the Supreme Court has only endorsed some of them. As a result, the circuit courts have the power in many cases to change course and make ERISA benefits litigation look more like ordinary litigation. While to date much of the questioning has occurred in non-binding dicta or concurring opinions, 2022 offered further evidence that some courts are increasingly inclined to roll back some of the requirements.

In most circuits, ERISA’s discovery limitations apply whether the court applies an abuse of discretion standard of review or a de novo standard of review. However, a few circuits permit the parties to discover and the court to consider evidence outside of the administrative record when the de novo standard of review applies. Prior to 2022, the Third, D.C., and Eleventh Circuits had endorsed some version of that approach, though it was unclear whether the authority in the Eleventh Circuit was still good law. In 2022, the U.S. Court of Appeals for the Eleventh Circuit reaffirmed that a court’s review is not limited to the administrative record in cases decided under a de novo standard of review, reasoning that such restrictions only make sense when the court’s review is confined to whether the administrator’s decision was reasonable based on what it had in front of it when it made the decision.

It remains to be seen whether the Eleventh Circuit’s decision will influence other circuits, but there appears to be a growing chorus of judges who question the court-made procedure that governs ERISA benefits litigation. In 2023 and beyond, that chorus may continue to grow. Plans and their administrators should be aware of both the current state of play and new developments in the circuits in which most of their members reside.

Mental Health Matters Act and ERISA procedure

As with the courts, members of Congress are also questioning why ERISA benefits litigation should work differently than ordinary litigation. On September 29, 2022, the U.S. House of Representatives passed the Mental Health Matters Act, H.R. 7780, which, among other things, would prohibit arbitration, class action waiver, and discretionary clauses in ERISA benefit plans. The bill stalled in the U.S. Senate prior to the mid-term election and did not pass before the end of the Congressional term.

If passed, the Act would have barred ERISA plans from giving their administrators the discretion to interpret the plan and apply its terms. In determining whether to apply the deferential abuse of discretion standard in ERISA benefits cases, courts look at whether the plan contains such a grant of discretion. If it does not, the court reviews the non-deferential de novo standard of review. The Act would have dictated that courts apply de novo review in all cases and would have eliminated abuse of discretion review.

Most of the judicial decisions that have produced ERISA’s unusual procedural requirements are based on the courts’ understanding of Congress’ intent to provide a streamlined administrative review process for ERISA benefit claims. The Act reflects what may be a growing willingness among legislators and courts to revisit that understanding. On the other hand, the Act would have acknowledged that a court in ERISA benefits litigation is a “reviewing court” even when applying de novo review, suggesting that it was not intended to completely change the administrative review-like structure of ERISA benefits cases.

The Mental Health Matters Act appears to be a casualty of the 2022 mid-term elections, but that it passed the House shows that a growing number of policymakers believe change is in order. While similar legislation is unlikely to be successful in the new Congress, plans and administrators should keep an eye on developments in both Congress and the courts, given the dramatic impact they may have on ERISA benefits litigation.