ERISA litigation continues to expand in unprecedented fashion, reshaping the landscape for employers, plan sponsors, and service providers. As we move into 2026, all indications suggest that this trend will accelerate. Four lawsuits filed in late December may represent the beginning of a significant new wave of cases.
These four suits, filed by plaintiff’s firm Schlichter Bogard LLC, allege violations of ERISA Section 502 (29 U.S.C. §§ 1132(a)(2) and (a)(3)) attacking the purported high costs of voluntary benefits insurance — including accident-only, critical illness, hospital indemnity, and cancer insurance. In particular, the complaints assert that defendants, acting as fiduciaries, breached their duties in managing and administering these voluntary benefit insurance programs, which are covered by ERISA. The allegations include failure to monitor and identify lower-cost benefit options for employees and engaging in prohibited transactions through the payment of excessive commissions to consultants. Because employers do not subsidize these insurance coverages, the implication is that companies failed to oversee these offerings prudently and loyally.
What makes these cases particularly noteworthy is that they do not focus exclusively on employer-defendants. Plaintiffs are now advancing claims that target benefit consultants as defendants, claiming these entities, sometimes referred to as brokers, are ERISA fiduciaries. Plaintiffs seek to shift the traditional understanding of these roles. Historically, benefit consultants functioned primarily as intermediaries between employers and insurance carriers and did so under the protection of ERISA’s fiduciary exemption. But here plaintiffs allege that consultants exercise discretion in selecting insurance carriers and insurance policies, and also in structuring voluntary benefit plans to gain sizeable commissions — actions that, plaintiffs argue, make these consultants plan fiduciaries.
Because these lawsuits have just been filed, the ultimate implications for plan-broker relationships are unknown. However, the potential consequences could be significant, perhaps opening the door to widespread claims and heightened scrutiny industry-wide.
As these cases unfold, another critical question will dominate the discussion: does ERISA govern voluntary insurance benefits? Are brokers ERISA fiduciaries? Employers have traditionally assumed these benefit policies fall outside ERISA’s scope, relying on safe harbor provisions under 29 C.F.R. § 2510.3-1(j). These new lawsuits challenge that assumption, alleging employers endorse these insurance coverages, perform more than ministerial implementation tasks, and obtain services at lower cost by allowing benefit consultants to receive excessive commissions. This development is particularly significant given the growing popularity of voluntary benefits as a means of supplementing traditional health coverage as employers help participants manage additional medical expenses.
Against this backdrop, the central question is: will alleged employer endorsement, administration, and discretionary control over voluntary benefits be sufficient to bring these coverages under ERISA’s governance? If so, plan sponsors and benefit consultants should brace for continued litigation, as plaintiffs seek to upend long-standing assumptions about voluntary benefits and expand the scope of fiduciary liability.
If you have any questions, the Jackson Lewis ERISA Litigation Practice Group members are available to assist. Please contact a Jackson Lewis ERISA Litigation team member or the Jackson Lewis attorney with whom you regularly work if you have questions or need assistance.