Voluntary Benefits Are Becoming the Next ERISA Battleground
For years, ERISA fiduciary litigation followed a familiar path. Retirement plans first, then pharmacy benefit managers, then prescription drug pricing. Each wave tested the outer limits of fiduciary duty, often running into the same obstacle.
Standing.
The most recent filings by Schlichter Bogard suggest that problem has now been solved, not by refining allegations, but by changing the target.
The December Filings That Changed the Frame
On December 23, 2025, Schlichter Bogard filed four coordinated class actions against United Airlines, LabCorp, Community Health Systems, and Universal Services of America. Each case challenges voluntary benefit programs offering accident, critical illness, cancer, or hospital indemnity insurance.
What makes these cases different is not just the benefits at issue. It is who was named alongside the employers.
For the first time in this line of healthcare fiduciary litigation, national benefits consultants, including Mercer, Gallagher, Lockton, and Willis Towers Watson, were named as defendants facing equitable relief. The complaints seek disgorgement and restitution of commissions allegedly earned through conflicted advisory arrangements.
That move signals something more deliberate than a one off theory test.
Why Schlichter’s Involvement Matters
Schlichter Bogard is not experimenting.
The firm’s 401(k) litigation campaign reshaped fiduciary law through a strategy that prioritized precedent over settlement. Unanimous Supreme Court decisions in Tibble v. Edison and Hughes v. Northwestern established and reinforced the continuing duty to monitor plan investments. In Cunningham v. Cornell, decided in April 2025, the Court shifted the burden of proof for ERISA exemptions onto defendants.
That same month, the firm secured a jury verdict against Pentegra, followed by a substantial settlement.
When Schlichter enters a new category, it is rarely opportunistic. It is usually systematic.
The Strategic Choice to Focus on Voluntary Benefits
Earlier healthcare fiduciary suits targeting PBM arrangements and prescription drug pricing struggled to survive dismissal. Courts repeatedly found that plaintiffs could not show concrete financial harm traceable to fiduciary misconduct.
Premium setting authority often rested with employers. Many participants had reached out of pocket maximums, blunting individual injury.
Voluntary benefits change that calculus.
Employees pay one hundred percent of the premiums through payroll deduction. Every dollar flows directly from the participant. Alleged harm is immediate, individualized, and easily quantifiable.
From a standing perspective, this is a cleaner structure than any prior healthcare fiduciary theory.
The Role of Consultants as Fiduciaries
The complaints do not treat consultants as passive intermediaries.
They allege that consultants exercised discretion over plan design, carrier selection, and product placement, while operating under commission structures tied to premium volume. According to the pleadings, this created incentives to favor higher cost products and withhold lower cost alternatives.
The legal theory is functional fiduciary status combined with knowing participation in employer breaches. The remedy sought is equitable disgorgement of commissions.
This is not a damages driven case in the traditional sense. It is a governance case.
Why Commission Levels Are Central
Across the four filed cases, the complaints emphasize commission rates that materially exceed what plaintiffs characterize as market norms.
Commissions allegedly ranged from approximately twenty two percent to nearly forty percent of premiums. Plaintiffs point to other employer plans, administered by the same consultants, reporting commissions in the low single digit range.
The implication is inconsistency, not merely excess compensation
That inconsistency is used to argue that commission structures were not the result of arms length benchmarking, but of conflicted advisory practices.
The ERISA Safe Harbor Is Narrower Than It Appears
Voluntary plans can avoid ERISA coverage under 29 C.F.R. 2510.3-1(j) if all four conditions are met: (1) no employer contributions; (2) completely voluntary participation; (3) employer's sole function is permitting publicity and payroll deductions without endorsement; (4) employer receives no consideration beyond reasonable admin compensation.
The endorsement trap: DOL advisory opinions hold that any positive, normative judgment constitutes endorsement. Including the plan in benefits guides or using employer logos likely triggers ERISA coverage. All four defendants conceded ERISA coverage on Form 5500 filings. See DOL Advisory Opinion 94-23A (1994); DOL Advisory Opinion 2005-25A (2005), DOL Advisory Opinion 2012-04A (2012).
What may constitute endorsement: Endorsement may arise not only from express recommendations, but also from employer involvement in plan design, coverage selection, administrative support, or integration into broader benefits structures, including selecting specific carriers or coverages, assisting with claims or appeals, using employer branding in program materials, or incorporating the program into ERISA filings or wrap documents.
Why CAA 2021 Disclosures Changed the Evidence Landscape
The Consolidated Appropriations Act of 2021 quietly altered the litigation environment.
Since December 2021, brokers and consultants have been required to disclose all direct and indirect compensation related to ERISA health plans. Four full years of disclosure data now exists.
Plaintiffs are using that data to compare compensation levels across plans and against asserted reasonableness standards. Inadequate or incomplete disclosures may undermine reliance on prohibited transaction exemptions.
What was once opaque is now auditable.
The Expansion Path Is Predictable
The structure of these complaints, combined with pre-filing recruitment activity, suggests expansion rather than containment.
Targeted advertising aimed at specific employers ran for months before filing. The same national consultants appear across multiple plans. Cross plan comparisons are built directly into the pleadings.
If history from retirement plan litigation holds, additional employer defendants should be expected.
Which Employers Face the Cleanest Exposure
The risk profile that emerges is consistent.
Large employers offering employee paid voluntary benefits present the strongest standing posture. Programs with commission levels materially above twenty percent of premiums are the most vulnerable. Long standing consultant relationships without evidence of competitive bidding increase risk.
Scale matters, but structure matters more.
Consultants Are the Real Pressure Point
By naming consultants as defendants, the litigation challenges compensation models at the firm level, not just plan by plan decisions.
This mirrors what occurred in excessive fee litigation, where recordkeepers and advisors faced sustained pressure that ultimately reshaped industry pricing.
Early defense wins are unlikely to end exposure. Schlichter has a track record of pursuing appellate review to set durable standards.
Voluntary Benefits Are an Entry Point, Not the Endpoint
These cases do not suggest that voluntary benefits are uniquely problematic. They suggest that voluntary benefits are strategically useful.
Employee paid products eliminate standing hurdles. Once fiduciary principles are established in that context, plaintiffs can test whether similar reasoning applies to bundled medical, pharmacy, or other welfare arrangements.
At the same time, parallel ERISA theories targeting tobacco and wellness surcharges are advancing through both filed cases and active investigations. Routine cost shifting mechanisms are being reframed as fiduciary decisions.
These efforts are additive, not substitutes.
The Larger Signal
This is not a narrow dispute over insurance commissions.
It is a reminder that ERISA litigation evolves by solving procedural problems first. Once standing is secured, substantive theories follow.
Voluntary benefits appear to have solved that problem.
Governance practices that once received little scrutiny are now being examined through a fiduciary lens that has already reshaped retirement plans.
That shift is unlikely to stop with four filings.
How Rain Intelligence Helps
Rain Intelligence tracks early ERISA litigation signals, coordinated filings, and shifts in fiduciary theory before they become widespread industry exposure. We can identify when plaintiff firms move from exploratory cases to systematic campaigns, and which plan structures are most likely to be tested next.
If you want visibility, you can book a short demo to see how Rain Intelligence surfaces these risks early.
