For years, voluntary benefits felt like the one part of an employer’s benefits program that ran itself, and certainly not one that carried fiduciary risk. Accident, critical illness, hospital indemnity, cancer coverage. Employees opt in, employees pay the full premium, and the thinking was simple: if the company isn’t writing the check, the company isn’t on the hook.
That thinking is now being tested in federal court. Since December 2025, a run of proposed ERISA class actions, led by Schlichter Bogard, the firm best known for 401(k) excessive fee litigation, has taken direct aim at voluntary benefit programs. And these suits don’t stop at the employer. They name the brokers and consultants right alongside it.
Do employers owe fiduciary duties on voluntary benefits?
Employers can owe fiduciary duties on voluntary benefits because ERISA turns on how the program is set up, not on who pays the premium. ERISA governs what the law calls an employee welfare benefit plan. Voluntary products usually sit outside ERISA because, in theory, the employer isn’t the one establishing or maintaining them.
To keep that line clean, the Department of Labor wrote a safe harbor at 29 CFR 2510.3-1(j). A group insurance program offered by a carrier is not an ERISA plan if all four of these are true:
- No employer contribution. The employer pays nothing toward the premium.
- Completely voluntary. Employees decide for themselves whether to enroll.
- No endorsement. The employer’s role is limited to letting the carrier publicize the program to employees, collecting premiums through payroll deduction and sending them to the carrier, without endorsing the program.
- No profit. The employer receives nothing beyond reasonable pay, with no profit, for the administrative work it actually does in running the payroll deductions.
All four. Miss even one and the safe harbor disappears, and you may suddenly be a fiduciary of a plan you believed you were only hosting. For a broader look at where the ERISA line falls, see ERISA vs. non-ERISA plans.
Why does endorsement trip up most employers?
Endorsement is the condition employers fail most often, because the regulation never defines it. The practical question courts and regulators ask is whether a reasonable employee, looking at what the employer did, would conclude the company stands behind the product and treats it as part of its own benefits package.
Putting your logo on the materials. Telling staff you’re excited about the program. Folding it into open enrollment next to your medical plan. Choosing the carrier yourself. Helping employees enroll or file claims. Running the premiums pretax through your cafeteria plan.
Each of those is a thread. Pull enough of them together and a court may see endorsement. Most employers do several without a second thought, and that is exactly where the exposure lives. The new complaints add another thread: they allege that several of the employers described these programs as part of their ERISA plans in their own Form 5500 filings.
Is your voluntary program an ERISA plan?
Use this checklist for each voluntary product you offer. A “yes” in the right-hand column means the program is likely outside the safe harbor, and you should treat it as an ERISA plan until your counsel tells you otherwise.
| Question | Safe harbor answer | Answer that points to ERISA |
|---|---|---|
| Does the company pay any part of the premium, even for some employees or for a short period? | No | Yes |
| Is enrollment automatic, or is any employee required to enroll? | No | Yes |
| Did the company choose the carrier or negotiate the product terms? | No | Yes |
| Does the company’s name or logo appear on enrollment or marketing materials? | No | Yes |
| Does company messaging encourage employees to enroll or describe the product as a company benefit? | No | Yes |
| Is the product presented in open enrollment alongside your medical, dental or vision plans? | No | Yes |
| Are premiums paid pretax through your section 125 cafeteria plan? | No | Yes |
| Does HR help employees enroll, answer coverage questions or file claims? | No | Yes |
| Is the product listed in your wrap plan document, SPD or Form 5500 as part of your ERISA plan? | No | Yes |
| Does the company, or anyone it designates, receive anything beyond reasonable reimbursement for payroll administration? | No | Yes |
Some of these, such as payroll deduction and letting a carrier present at a benefits fair, are allowed on their own. The risk comes from how many you check and how they look to an employee. If the answers land on the ERISA side, your plan documents, summary plan description and Form 5500 reporting need to say so too.
What are the plaintiffs actually arguing?
The complaints make two kinds of claims, and every one of them is an allegation that the defendants dispute.
Against employers: that the employer held discretion over the voluntary programs, which makes it a fiduciary, and that a fiduciary must select carriers prudently, monitor loss ratios and make sure no one servicing the plan is paid more than is reasonable. The complaints allege the employers had no process to do that, and that the commissions were prohibited transactions paid from plan assets.
Against brokers and consultants: that they acted as functional fiduciaries by screening carrier bids, presenting only a curated set of options and keeping lower-cost carriers off the menu, and that higher commissions followed higher premiums. The broker’s pay climbs, and employees’ premiums climb with it.
Here are the cases we could verify from court dockets:
| Case | Court and number | Filed | Defendants | Status (last verified) |
|---|---|---|---|---|
| Pimm v. United Airlines, Inc. | N.D. Ill., No. 1:25-cv-15581 | December 23, 2025 | United Airlines; Mercer Health & Benefits Administration | Pending; no ruling on the merits found as of October 2026 |
| Brewer v. CHS/Community Health Systems, Inc. | N.D. Ill., No. 1:25-cv-15578 | December 23, 2025 | Community Health Systems and others | Pending; no ruling on the merits found as of October 2026 |
| Braham v. Laboratory Corporation of America Holdings | Filed N.D. Ill., No. 1:25-cv-15583; now M.D.N.C., No. 1:26-cv-00455 | December 23, 2025 | Labcorp; Willis Towers Watson US | Transferred to North Carolina in May 2026 on the defendants’ motion; pending |
| Fellows v. Universal Services of America, LP (Allied Universal) | S.D.N.Y., No. 1:25-cv-10659 | December 23, 2025 | Allied Universal and its benefits committee; Lockton; Mercer | Pending; no ruling on the merits found as of October 2026 |
| Haller v. Banner Health | D. Ariz., No. 2:26-cv-03114 | May 4, 2026 | Banner Health; Lockton; BCInsourcing | Pending |
| Hannum v. Banner Health | D. Ariz., No. 2:26-cv-02944 | April 28, 2026 | Banner Health; Lockton; BCInsourcing | Pending |
| Raynes v. Arthur J. Gallagher (Illinois) LLC | N.D. Ill., No. 1:26-cv-11389 | September 17, 2026 | Gallagher | Pending |
Industry reporting in mid-2026 said defendants had moved to dismiss amended complaints in several of the original cases. We found no court decision on whether these programs are ERISA plans in any of them as of October 21, 2026. Check the dockets before you rely on the status of any single case.
Why is this happening now?
Two changes made these cases possible: broker pay is now on paper, and prohibited transaction claims are harder to dismiss early.
Compensation disclosure. The Consolidated Appropriations Act, 2021 added ERISA section 408(b)(2)(B). Brokers and consultants to an ERISA group health plan who reasonably expect $1,000 or more in direct or indirect compensation must disclose it in writing to the responsible plan fiduciary, reasonably in advance of the contract. That covers commissions, bonuses, overrides and other indirect pay, and it applies to contracts entered into, extended or renewed on or after December 27, 2021. For the first time those numbers exist in writing, and plaintiffs’ lawyers can read them. Our explainer on broker compensation disclosure covers what you should be receiving.
Cunningham v. Cornell University. On April 17, 2025, the Supreme Court ruled unanimously that a participant alleging a prohibited transaction for services only has to plead the elements of ERISA section 406(a)(1)(C). The section 408 exemptions, including the one for reasonable compensation, are affirmative defenses that the defendant must raise and prove. That makes it harder to end these cases on a motion to dismiss and easier to reach discovery, which is where they get expensive in a hurry.
Put simply: the data now exists, and the courthouse door is open wider than it has been.
The honest reframe.
These lawsuits are less about voluntary benefits than about a question that runs under the whole program: does anyone at your company know what each vendor is paid, and whether that pay is reasonable for the work? For most employers the honest answer is no. Not because they’re careless, but because the way voluntary products are sold was never built to make that answer clear.
You manage every other dollar in the business with a real process. Benefits shouldn’t be the one place you accept “trust me” as an answer. The employers who treat this moment as a prompt to govern, rather than a threat to wait out, are the ones who will come through it with a stronger plan and lower cost. For what that standard of care looks like in practice, see the fiduciary standard.
What to do now.
- Inventory and test. Pull the full list of voluntary benefits you offer and run each one through the checklist above. If a program misses a condition, decide: tighten things up and get back inside the safe harbor, or accept that ERISA applies and govern it that way.
- Look hard at endorsement. Your logo, your language, your enrollment process, your cafeteria plan. Where are you signaling that the company stands behind these products?
- Line up your documents. If a program is an ERISA plan, make sure your plan document, SPD and Form 5500 say so consistently.
- Build a monitoring process. Bring the same discipline you use for your medical and retirement plans: documented carrier selection, periodic market checks, loss ratio review and a real look at what everyone is paid.
- Ask the question out loud. What is my broker paid on these products, and who showed me the alternatives? Ask for the written 408(b)(2)(B) disclosure. If you can’t get a straight answer, that is your answer.
Ethos Benefits reviews voluntary and other ancillary programs as part of its ancillary benefits work.