Lawsuits Challenged Employer Benefit Plan Commissions

Employees are alleging that some large companies failed to properly monitor hidden broker fees in their benefit plans.

Updated on Sept. 25, 2026 in Financial Planning

Isometric editorial illustration of a heavy stone plinth supporting a balanced steel weight, representing corporate fiduciary responsibility. — Employees launched class-action lawsuits against major U.S. employers, alleging that hidden broker commissions were built into employee-paid benefit premiums. AI Illustration. Upload story photo >

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Should employers be legally responsible for monitoring broker commissions charged on employee-paid voluntary benefits?

In December 2025, plaintiffs launched class action lawsuits under the Employee Retirement Income Security Act (ERISA) against major employers including United Airlines, Allied Universal, and Banner Health. The suits allege these employers failed to monitor commission payments built into employee-paid insurance premiums.

Why it matters

The litigation argues that employers breached their duties of loyalty and prudence by failing to ensure that compensation paid to brokers remained reasonable for the value provided to workers. If these claims succeed, it could force companies to reassess how they oversee the costs embedded in their voluntary benefit offerings.

Lawsuits allege some plans paid commissions averaging nearly 40 percent of premiums, significantly higher than the 10 percent benchmark for similar large plans. Mercer and Lockton were cited as receiving millions in fees between 2020 and 2024.

The players

United Airlines

A major carrier and employer currently named as a defendant in class action litigation regarding benefit plan fees.

Mercer

A global human resources consulting and brokerage firm that manages benefits and was cited in commission-related lawsuits.

Lockton

A private insurance brokerage firm that advises companies on employee benefit plans and was named in the Allied Universal case.

The details

Plaintiffs utilized employer Form 5500 filings to demonstrate that commissions paid to brokers like Mercer and Lockton exceeded industry standards. By applying legal frameworks from previous 401(k) fee litigation, the suits allege that premiums charged to employees often funneled excessive amounts to third parties. Employers are accused of failing to evaluate whether these compensation structures provided adequate value to the workforce.

2020-2024: Commission period cited in the Pimm v. United Airlines case.
December 2025: Beginning of the voluntary benefit class action lawsuits.

Money Landscape

This litigation signals an expansion of fiduciary oversight expectations from retirement accounts to voluntary insurance programs. It follows a historical pattern where employers face increased legal pressure to justify all costs passed down to employees in company-sponsored plans.

Employees should review their paystubs and plan documents to understand the full cost of their voluntary benefits. Because this is a legal matter, those with questions about the fairness of their own plan fees should consult with a qualified financial or tax professional.

The takeaway

These lawsuits highlight the importance of transparency in employer-provided insurance premiums and broker compensation. To better understand your own coverage, review your annual benefit enrollment disclosures and verify the total costs deducted from your paycheck.