Voluntary Benefits Litigation: How Plaintiff Firms Turned Broker Compensation Into an ERISA Class Action Playbook

By Justin Bove, Encore Fiduciary
Robert Davis, Davis & Harman LLP
Kent Mason, Davis & Harman LLP

Since December 2025, almost a dozen voluntary benefits lawsuits have been filed, with the most recent handful targeting companies that acted as their own brokers with respect to their voluntary benefits programs, the allegation being that they breached their fiduciary duty to their own employees.

When Encore Fiduciary’s Fid Guru Blog forecasted fiduciary litigation trends to monitor in 2026 (ERISA Fiduciary Litigation in 2025: Plaintiff Law Firms Continue the Frenetic Pace, With Broader Allegations Against Both Retirement Plans and Health Plans), we noted that one of the developments worth watching occurred on December 23, 2025, when four class action complaints were filed by the same plaintiff firm targeting voluntary benefits programs and naming their brokers as co-defendants. At the time, we wrote: “these cases will be closely monitored to see if additional lawsuits will be filed, and if so, how allegations relate to compliance with the DOL’s safe harbor.”

In this article we examine what these complaints allege, how the allegations have evolved with each wave of complaints filed, and how defendants have responded in their initial motions to dismiss. We then highlight holes in plaintiffs’ arguments and analyze what employers and their brokers should take away from this emerging litigation trend.

What Are Voluntary Benefits?

Voluntary benefits are supplemental insurance products – such as accident, critical illness, disability, and hospital indemnity insurance – employers choose, at their option, to make available to their employees. Unlike traditional employer-sponsored benefits, the entire cost of voluntary benefits is borne by employees through payroll deductions, and participation is entirely optional. Employers facilitate access to these products by arranging group coverage through a broker, which allows employees to obtain coverage at rates more favorable than what they could secure individually. Because employers neither fund the benefits nor administer them in any meaningful operational sense, voluntary benefits programs were historically viewed as sitting outside the ERISA fiduciary litigation framework that has generated hundreds of class action lawsuits against retirement and health and welfare plans over the past decade. That assumption is now being tested in federal courts across the country in these voluntary benefits class action lawsuits.

Wave One: One Plaintiff Firm Invents This Litigation Trend, Filing Four Lawsuits on the Same Day

1. Braham v. Laboratory Corporation of America (LabCorp.); and Willis Towers Watson (N.D. IL)¹ * Note: In May 2026, this case was transferred to the M.D. NC
2. Brewer v. Community Health Systems (CHS); and Gallagher Benefit Services (N.D. IL)²
3. Fellow v. Universal Services of America; and Lockton Companies (S.D. NY)³
4. Pimm v. United Airlines; and Mercer Health and Benefits Administration (N.D. IL)⁴

On December 23, 2025, the Schlichter Bogard law firm filed four novel class action complaints against employers and their voluntary benefits programs, with their benefits brokers named as co-defendants in each. All four lawsuits alleged the voluntary benefits programs are subject to ERISA because the employers allegedly failed to comply with the voluntary benefits safe harbor established by the U.S. Department of Labor under 29 C.F.R. § 2510.3-1(j),⁵ and that the employers and their brokers violated ERISA’s fiduciary standards and engaged in prohibited transactions.

The DOL’s safe harbor exempts voluntary benefits programs from ERISA if all four of the following conditions are met: (1) employers do not contribute to or subsidize any amount of the premiums, which must be paid 100% by the employees; (2) employee participation must be completely voluntary; (3) employers do not endorse any program, limiting their involvement to permitting insurers to publicize the program to employees, collecting premiums through payroll deductions, and then remitting those premiums to insurers; and (4) employers do not receive any compensation from the insurance carrier or program administrator other than reasonable compensation for administrative services such as payroll deductions.

All four complaints include identical allegations that the employers promoted their voluntary benefits programs through the company-branded open enrollment process alongside traditional employer-subsidized benefits including ERISA welfare plans. All four complaints also allege that the employers filed a Form 5500 with the DOL for their ERISA welfare benefit plans including the voluntary benefits as if all were similarly offered. Plaintiffs contend this filing is an admission of ERISA plan status (DOL subsequently released its position against this allegation, as highlighted later in the article).

Whether the voluntary benefits programs are subject to ERISA is a critical element of Schlichter’s arguments since the alleged fiduciary violations are grounded in ERISA § 404(a)’s duties of prudence and loyalty. All four complaints allege that the employers failed to monitor broker compensation, cited by plaintiffs as excessive broker commissions of up to 55% of premiums totaling several million dollars annually. The purported damages centered on financial harm to employees who allegedly overpaid for supplemental coverage due to the failure of their employer to monitor these excessive commissions.

All four complaints also allege that each broker was itself a functional fiduciary since it exercised sufficient discretionary authority over the voluntary benefits program by determining commission structures and selecting carriers. Plaintiffs argued such conduct constituted an exercise of discretionary authority over what they alleged to be ERISA plan assets.

Motions to dismiss have been filed by both defendant parties, employers and brokers, in all four of these cases. At the time this article was written, no rulings on these motions had been issued in any of these cases.

Wave Two: Plaintiff Firms Refine and Expand Their Litigation Theories

5. Hannum v. Banner Health; and Lockton Companies; and BCInsourcing (D. AZ)⁶
6. Haller v. Banner Health; and Lockton Companies; and BCInsourcing (D. AZ)⁷
7. Chin v. Macy’s; and Aon Consulting; and Hewitt Insurance Brokerage (S.D. NY)⁸ *
   Munson v. Macy’s; and Aon Consulting; and Hewitt Insurance Brokerage (S.D. NY)⁹
   

   * Note: This case was voluntarily dismissed on 9/30/2026 and a new case was filed on 10/3/2026 by the same plaintiff firm with a new lead plaintiff – Munson. The allegations are essentially the same, so the analysis still holds true.

Three additional complaints filed between April and July 2026 advanced the same employer-plus-outside-broker theory, but with improved pleading and notable new allegations. For the first time in this litigation trend, the same employer was sued by two different plaintiff firms less than one week apart – something that has occurred in other ERISA fiduciary litigation trends. The double filing is a signal of how aggressively plaintiff firms are reviewing voluntary benefits programs and competing for lead counsel position. In most instances, such cases are eventually consolidated, as these two cases were (Haller was consolidated into Hannum in June 2026).

Banner Health – sued twice in one week

Hannum – the first complaint against Banner Health, filed by Bailey & Glasser and Keller Rohrback

In Hannum, plaintiffs’ allegations were similar to the four lawsuits filed in Wave One but laid out a more robust set of facts to attempt to support the ERISA fiduciary breach claims. In addition to providing comparable data on commissions paid to other voluntary benefits brokers, the complaint alleged specific process flaws, including failing to compare the brokers’ commissions to market benchmarks, never soliciting bids from other brokers, and not taking any corrective action when the commission rate increased significantly in a single year when BCInsourcing joined Lockton Companies as a co-broker.

In Hannum, plaintiffs also framed the broker co-defendants as non-fiduciary knowing participants in Banner Health’s alleged breach – an intentional pleading choice that avoids the threshold question of whether an outside broker constitutes a plan fiduciary. The knowing-participant theory does not require the court to extend ERISA fiduciary status to an outside broker yet still supports disgorgement relief under § 502(a)(3). The Supreme Court in Harris Trust & Savings Bank v. Salomon Smith Barney Inc., 530 U.S. 238 (2000), held that a non-fiduciary who knowingly participates in a fiduciary’s breach can be liable under § 502(a)(3) for equitable relief – including disgorgement of ill-gotten gains – even though that party is not itself an ERISA fiduciary.¹⁰

Haller – the second complaint against Banner Health, filed by Schlichter Bogard

In Haller, plaintiffs’ allegations generally mirrored the four lawsuits filed in Wave One, relying primarily on conclusory inferences of process failure to infer a deficient fiduciary process rather than the specific commission data and comparative calculations present in Hannum. Plaintiffs also alleged the broker co-defendants were fiduciaries just as in the original Wave One complaints. This difference appeared to be the main distinction between the two lawsuits against Banner Health, and in general between the lawsuits filed by the Schlichter Bogard firm and the Bailey & Glasser firm, before they were consolidated.

Macy’s – complaint filed by Bailey & Glasser

In July 2026, the Bailey & Glasser firm filed its second voluntary benefits lawsuit, this time against Macy’s, naming Aon and its affiliated entities as co-defendants. The plaintiffs moved to voluntarily dismiss this case on September 30, but a new case – with a different lead plaintiff – was filed on October 3. The complaint against Macy’s is similar to the one Bailey & Glasser filed against Banner Health:

• The same allegations are again backed by a more comprehensive analysis of commissions with specific examples, rather than conclusory “it is therefore reasonable to infer a breach of fiduciary process” rhetoric.
• Brokers are again framed as non-fiduciary knowing participants rather than fiduciaries.

However, Munson is the first complaint to use “churning” as an explicit allegation. The concept was described in Hannum as background industry context explaining the incentive structure behind a heaped commission structure – a high first-year payout after switching carriers, followed by significantly lower renewal commissions, which creates a financial incentive for brokers to periodically switch carriers despite no corresponding improvement in coverage or benefits. In Munson, plaintiffs alleged two churning cycles over the class period, with one documented carrier switch in 2022 and another suggested in 2019, with the increased commission in each instance allegedly passed directly to participants in the form of higher premiums.

Munson is also notable in that it states explicitly: “Plaintiff has examined the Form 5500 filings of more than 16,000 employers that offer critical illness, accident, and/or hospital indemnity insurance. That aggregate dataset, which includes employers of all sizes and all brokers, shows a median all-in broker compensation rate of approximately 20% of premiums.” The complaint then uses that dataset to state that Macy’s six-year average of “36.7 percent” is above the “75th percentile.” This type of analysis has led courts to find standing in other litigation trends. For a comparable example in the prescription drug context, see our prior article (Plaintiff Firms Secure Standing for the First Time in ‘Excessive’ Prescription Drug Lawsuits).

Wave Three: One Plaintiff Firm Files Four Lawsuits in One Month Against Brokers Who Broker Their Own Voluntary Benefits Programs

8. McCalla v. USI Insurance Services (S.D. NY)¹¹
9. Raynes v. Arthur J. Gallagher (N.D. IL)¹²
10. Wilmer v. Marsh & McLennan Companies (S.D. NY)¹³
11. Erickson v. Lockton (W.D. MO)¹⁴

The third wave arrived more recently when the Capozzi Adler firm filed four complaints against four insurance brokers. The complaints are meaningfully different from the first two waves in that they allege prohibited transactions under ERISA § 406(b), 29 U.S.C. § 1106(b), which prohibits “self-dealing” by plan sponsor fiduciaries, whereas all prior complaints alleged prohibited transactions against the plan sponsors under ERISA § 406(a), which prohibits certain transactions between a plan and a “party-in-interest” – meaning the outside brokers named as co-defendants.

The complaints allege that each employer-defendant occupied both sides of the voluntary benefits transaction – as the employer on one side, and as the benefits broker collecting commissions from participant premiums on the other side. Unlike the prior complaints where broker fiduciary status was contested, each Capozzi Adler defendant is both the employer and a named fiduciary in its own Form 5500 filings, eliminating the threshold broker-fiduciary debate entirely. Plaintiffs allege violations of § 406(b)(1) (dealing with plan assets in one’s own interest), § 406(b)(2) (acting on behalf of a party adverse to the plan), and § 406(b)(3) (receiving consideration from a party dealing with the plan in connection with plan assets), and note that no independent fiduciary is identified in any Form 5500 filing as having approved or monitored the broker compensation arrangements. These complaints also cover a deliberately broad range of voluntary benefit lines – life insurance, long-term disability, AD&D, long-term care, vision, telehealth, legal, and business travel accident – substantially expanding damages exposure compared to the earlier cases.

Relying on Form 5500 Schedule A disclosures, plaintiffs have alleged the following:

McCalla v. USI Insurance Services

• USI, directly or through affiliated entities including Custom Benefits Programs and USI Southwest, collected almost $3.5M in total commissions and administrative fees across nine voluntary benefits programs from 2020 through 2024.

Raynes v. Arthur J. Gallagher

• AJG, directly or through affiliated entities, primarily Gallagher Benefits Services, collected almost $4.8M in commissions and administrative fees across five voluntary benefits programs from 2020 through 2024.

Wilmer v. Marsh & McLennan Companies

• Marsh, directly or through affiliated entities including Marsh Insurance & Investments Corp. and Mercer Health & Benefits Administration, collected almost $7M in commissions and administrative fees across seven voluntary benefits programs from 2020 through 2024.

Erickson v. Lockton

• Lockton, directly or through affiliated entities including BCInsourcing and The Insurance Partners, collected almost $3.3M in commissions and administrative fees across six voluntary benefits programs from 2020 through 2024.

Will a Recent Court Ruling Impact the Wave Three Cases?

In a recent, unrelated lawsuit, a district court ruled that a Lockton voluntary benefit program was subject to ERISA. On September 30, 2026, the U.S. District Court for the Southern District of California ruled in Whitlock v. Provident Life and Accident Insurance Company¹⁵ that a voluntary “top-up” long-term disability insurance program offered by Provident to Lockton employees did not satisfy two prongs of the DOL’s voluntary benefits safe harbor: the employer endorsement provision, by promoting the insurance benefit alongside its own welfare benefits and negotiating for reduced premiums; and the provision against employers receiving compensation in connection with the program, since Lockton had received commissions and fees by acting as its own broker. This “top-up” plan is also referenced in the Erickson v. Lockton complaint, along with five other voluntary benefits.

The court distinguished its ruling from another decision, Koo v. Unum Group¹⁶, in which a different California district court found that a similar supplemental disability insurance program qualified for the DOL’s voluntary benefits safe harbor. According to the district court, the key distinctions included the employer in Koo not receiving any consideration with respect to the program and not taking comparable actions establishing sponsorship or control over the program. The district court in Koo also noted the employer frequently included language in employee communications stating the plan at issue was not an ERISA plan.

On its face, the district court’s ruling in Whitlock is concerning because it directly addresses an issue that may be foundational in some of these cases – i.e., whether the voluntary benefits at issue are subject to ERISA. However, on closer examination, the district court’s ruling in this case is unlikely to have a significant impact on other courts trying to determine if ERISA applies to a particular voluntary benefits program in this line of cases, or any others, for the following reasons:

• The district court’s ruling in Whitlock is unpublished, meaning it has no precedential value. Technically, it still can be cited as persuasive authority, but the ruling’s lack of developed reasoning or analysis will limit its value in this regard.
• The district court frequently points to a 30% premium discount that Lockton allegedly “negotiated” to support its conclusion that the program is subject to ERISA. However, the court seemingly did not consider that these types of volume discounts are common incentives insurers offer when seeking the opportunity to market their products to an employer’s employees. The fact that an employer wants to offer its employees the opportunity to get a better premium on an insurance product is not the type of employer involvement that should turn a voluntary benefits program into an ERISA plan. The First Circuit Court of Appeals acknowledged this in a similar case, where it reasoned “an employer can assist its work force by arranging for the provision of desirable coverage at attractive rates, but, by complying with the regulation, assure itself that, if it acts only as an honest broker and remains neutral vis-a-vis the plan’s operation, it will not be put to the trouble and expense that meeting ERISA’s requirements entails.”¹⁷ The district court was aware of the First Circuit’s opinion because it cited it as the standard for determining if an employer “endorsed” a program for purposes of the ERISA voluntary benefits safe harbor, which is discussed more below. Since California is not part of the First Circuit, it was not bound by the First Circuit’s opinion. However, the First Circuit’s opinion does have precedential value in federal district courts in Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico.
• The district court held without any analysis that Lockton endorsed the program simply by “[offering] the plan with its broader welfare plan.” As discussed below, both DOL and the First Circuit have rejected this overly simplistic interpretation of the endorsement prong of the safe harbor.
• Another voluntary benefits safe harbor requirement is that the employer not receive any cash compensation from the insurance carrier “in connection with the program,” other than reasonable compensation for administrative services provided in connection with payroll deductions. The district court concluded, without discussion or support, that the commissions Lockton received for acting as its own broker clearly violated this requirement. However, a commission paid to a broker for facilitating a transaction in its non-employer capacity is materially different from compensation paid to an employer in its capacity as the employer. As the First Circuit put it, the voluntary benefits safe harbor “operates on the premise that the absence of employer involvement vitiates the necessity for ERISA safeguards.” Earning commissions in the normal course of the employer’s business is not the type of “employer involvement” that should trigger ERISA coverage.¹⁸
• Finally, Lockton is not a named defendant in Whitlock, and there is nothing in the court’s order indicating that Lockton participated in any way in arguing for or against the program’s ERISA status. The court ruled only that the program did not qualify for regulatory exclusion from ERISA coverage; the ruling did not state or imply that Lockton may have violated its ERISA fiduciary duties. Any ruling on an alleged fiduciary breach involving voluntary benefits programs would come from the pending fiduciary class litigation, as discussed below.

How Will Courts Respond to the Plaintiffs’ Complaints and Defendants’ Motions to Dismiss?

The voluntary benefits litigation trend follows the same playbook that has driven nearly 800 class action lawsuits against ERISA plans over the last decade: plaintiff firms proactively seek plaintiffs to attach their names to lawsuits filed against plan sponsors, using speculative fiduciary theories to infer flawed fiduciary processes by citing allegedly excessive commissions, fees, premiums, or alleged investment underperformance, to assert millions of dollars of economic harm. Plaintiff firms flood district courts across the country with coordinated filings, spamming the judicial system trying to avoid legal precedent being established by any case ruling. In their rush to file, different plaintiff firms often file the same lawsuit against the same company mere days apart – as happened with Banner Health. With only a few exceptions, plaintiff firms do not seek to take these cases to trial, so their success is measured by how many cases they file and how many settlements they obtain.

The lifespan and success of this voluntary benefits litigation trend will be determined by court rulings on the following threshold questions:

Whether the complaints sufficiently plead the voluntary benefits programs at issue are subject to ERISA.

A DOL regulation provides that they are not, so long as certain specific requirements are met. Plaintiff firms, however, allege that many employers do not comply with the DOL’s safe harbor criteria in several ways, including through Form 5500 filings.

In June 2026, DOL published Technical Release 2026-02¹⁹ in which it clearly stated its position that a Form 5500 filing does not constitute an admission that a voluntary benefits program is an ERISA-covered plan:

An employer that includes information about a voluntary payroll deduction arrangement on the Annual Return/Annual Report (the 5500) of the employer’s ERISA-covered plan does not, by that act alone, stamp its approval on the voluntary benefit arrangement such that the arrangement necessarily is an ERISA-covered plan. Such reporting is a relevant but not dispositive fact in the view of the Department.

This is not just DOL’s opinion. The Technical Release cites several district court cases and favorable rulings by the First and Sixth Circuit Courts of Appeal in support of this position, including Johnson v. Watts Regulator Company²⁰.

Even if courts adopt DOL’s position on the non-impact of Form 5500 filings, the information disclosed on the Schedule A of a Form 5500 may still be cited by plaintiffs as alleged evidence that an employer did not comply with DOL’s safe harbor requirements. In the lawsuits filed against insurance brokers who also brokered the voluntary benefits programs offered to their employees, plaintiffs pulled commission amounts directly from the Schedule A and argued those commissions violate the fourth prong of the safe harbor because they are not “reasonable compensation for administrative services actually rendered in connection with payroll deductions.” This same exposure should not apply to the other cases filed against employers who paid commissions to independent brokers, since the fourth prong of the safe harbor refers to consideration received by the employer itself. As noted above, we find it highly questionable whether such commissions would violate the fourth prong.

All of the complaints also include allegations that employers violated the third prong of the safe harbor by “endorsing” the voluntary benefit programs, such as by integrating them into their open enrollment platforms that are branded with the employer’s logo. In Technical Release 2026-02, DOL partially weighed in on this issue as well. According to the Technical Release, placing information about a program on the employer’s intranet does not necessarily constitute an “endorsement” of the program for purposes of the safe harbor. Additionally, the Technical Release states that providing “neutral information about the benefits of using the payroll deduction arrangement to buy these benefits” is not an endorsement so long as the employer does not vouch for the quality of a specific product or provider. The First Circuit also echoed this sentiment in Johnson, noting “endorsement of a program requires more than merely recommending it.”

The motions to dismiss filed by the employers in the initial four lawsuits do not challenge plaintiffs’ arguments that employers did not comply with DOL’s safe harbor provisions. Rather than raise the non-ERISA issue, the employers have focused on other threshold issues discussed below.

Whether, if the voluntary benefits programs are subject to ERISA, the employers or brokers breached any ERISA fiduciary duties.

The complaints allege that the employers are fiduciaries with respect to these voluntary benefits programs, and that their brokers are either fiduciaries or non-fiduciaries who knowingly participated in the employers’ alleged breaches. The alleged fiduciary breaches and related prohibited transactions are based on the amount of broker commissions that plaintiffs claim were baked into the premiums that employees paid.

First, there is a glaring hole in the plaintiffs’ logic. Employees, and therefore the plaintiffs in these cases, did not pay the commissions, they paid the premiums. So, comparisons of commissions are not the correct comparison; the only comparison that matters is a comparison of premiums. Next, the comparison of premiums should be to a meaningful benchmark, i.e., to a voluntary benefits program that is similar in all respects that are relevant for setting premiums, such as the size and industry of the employer and demographics of the workforce, as well as benefits provided. In the absence of a meaningful comparison of premiums, which the complaints fail to show, the complaints should be dismissed.

Moreover, as we have consistently pointed out with respect to ERISA class action lawsuits, plaintiffs should be required to show more than meaningful benchmarks to overcome a motion to dismiss a breach of fiduciary duty claim. ERISA’s fiduciary obligations are about prudent processes, not about achieving certain results. Thus, a complaint that merely presents superficial comparisons of premiums should not, alone, be enough to overcome a motion to dismiss because it fails to allege an injury that would confer standing, or an ERISA violation.

Whether the brokers are fiduciaries in programs maintained by other employers.

In their motions to dismiss filed in the initial four lawsuits, the outside brokers argue that they do not exercise discretionary authority to select the insurer or the voluntary benefit program, and that they are paid by the insurer and thus are not paid directly by the program itself. The brokers are simply implementing the employer’s request for insurance quotes within parameters set by the employer and getting paid a commission negotiated with the insurer. It is hard to see them as fiduciaries in this context.

Whether the program terms are settlor acts rather than fiduciary acts.

In the retirement space, the adoption of the program document is the first step, and subsequently the plan fiduciaries select their service providers and must do so prudently. In the insured health and welfare space, there often is no program until the insurance is purchased. So, the selection of the insurance program may well be a settlor act, not a fiduciary act. CHS, Universal Services of America, and Willis Towers Watson all argued in their motions to dismiss that the employer’s selection of the group voluntary benefits programs, and making those coverages available at insurer-set premium rates, are settlor design decisions and not fiduciary acts.

Whether a prohibited transaction occurred.

Courts must rule on both “party-in-interest” and “self-dealing” allegations. The former asserts the alleged ERISA plan paid commissions that were too high. The latter alleges that the brokers engaged in self-dealing by providing brokerage services to their own plans. Following the Supreme Court’s ruling in Cunningham v. Cornell²¹, plaintiffs increasingly allege prohibited transactions occurred as a way to survive the motion to dismiss.

Regarding the party-in-interest allegations, the brokers are not being paid by the program, they are being paid by the insurer, undercutting the argument that there are party-in-interest prohibited transactions.

The self-dealing allegations, which are raised with respect to the broker’s own programs, should again fail for a number of reasons, including the same fact that program assets are not being used to pay the broker. Moreover, a specific prohibited transaction exemption from DOL – prohibited transaction exemption (PTE) 79-60 – permits brokers to act as their own broker with respect to programs maintained for their own employees. The key condition of that PTE is that the broker does not receive more than adequate consideration for the insurance contracts.

Whether mandatory class certification is automatic.

Defendants could challenge automatic mandatory class certification if the level of commissions varied among the different voluntary benefits elected by different employees within an employer’s programs. The Fid Guru Blog previously discussed this concept arising out of recent court decisions, and its applicability across ERISA lawsuits, in a prior article (Class Certification in ERISA Litigation: Not So Automatic Anymore).

Concluding Perspective

There are several key takeaways for employers who choose to offer voluntary benefits programs:

• Consider whether all voluntary benefits programs are offered in full ERISA compliance or otherwise meet the criteria of all four prongs of DOL’s safe harbor, especially the requirement not to endorse any such program. Review carefully how ERISA welfare benefit plans and voluntary benefits programs are communicated and branded during open enrollment.
• Document the broker and carrier selection process, and monitor broker commissions and benefit premiums charged to employees, paying particular attention whenever carriers change.
• Employers that broker their own voluntary benefits programs may have a higher exposure to this litigation trend. Allegations that they violated the fourth prong of DOL’s safe harbor provision concerning compensation raise additional issues to be considered by courts. These employers should confirm compliance with the conditions of PTE 79-60. They must act with proper diligence, controls, and a well-documented process to address the concerns that plaintiff firms now allege of this structure.
• DOL Technical Release 2026-02 might be influential on the Form 5500 argument, but sub-regulatory guidance is unlikely to slow the pace of litigation against employers in light of the current posture of the plaintiffs’ bar and also the Supreme Court’s ruling in Loper Bright²².
• Fiduciary class litigation expanded beyond retirement plans years ago. Employers should confirm that their fiduciary liability insurance policy provides adequate protection for both ERISA retirement and health and welfare plans, as well as non-ERISA plans and benefits, including voluntary benefit programs. Most fiduciary liability insurance policies extend coverage beyond fiduciary responsibilities to also respond to acts committed in a settlor capacity. This is an important coverage extension, with plaintiff firms and defendants often disagreeing on the distinction between the two hats all employers wear as settlor and fiduciary.

Fiduciary liability insurers and defense counsel remain at the forefront of fiduciary litigation, defending policyholders from both arguably valid and meritless allegations. As plaintiff firms advance new legal theories, quality fiduciary insurers and counsel are uniquely positioned to advise policyholders on evolving litigation trends. Voluntary benefits litigation is a newer trend that bears close scrutiny by both employers and their service providers.

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Justin Bove is the Chief Revenue Officer & Fiduciary Product Lead for Encore Fiduciary. He can be reached at jbove@encorefiduciary.com.

Robert Davis and Kent Mason are partners at Davis & Harman LLP. They can be reached at rbdavis@davis-harman.com and kamason@davis-harman.com.

Footnotes

1. Braham v. Laboratory Corporation of America Holdings, No. 1:25-cv-15583 (N.D. Illinois, filed Dec. 23, 2025) and transferred as No. 1:26-cv-00455 (M.D. North Carolina, May 18, 2026).
2. Brewer v. CHS/Community Health Systems, Inc., No. 1:25-cv-15578 (N.D. Illinois, filed Dec. 23, 2025).
3. Fellow v. Universal Services of America, No. 1:25-cv-10659 (S.D. New York, filed Dec. 23, 2025).
4. Pimm v. United Airlines, Inc., No. 1:25-cv-15581 (N.D. Illinois, filed Dec. 23, 2025).
5. DOL Safe Harbor for Voluntary Employee Benefit Plans, 29 C.F.R. § 2510.3-1(j).
6. Hannum v. Banner Health, No. 2:26-cv-02944 (D. Arizona, filed Apr. 28, 2026).
7. Haller v. Banner Health, No. 2:26-cv-03114 (D. Arizona, filed May 4, 2026).
8. Chin v. Macy’s, Inc., No. 1:26-cv-05673 (S.D. New York, filed Jul. 2, 2026).
9. Munson v. Macy’s, Inc., No. 1:26-cv-08752 (S.D. New York, filed Oct. 3, 2026).
10. Hannum v. Banner Health Complaint ¶ 88 (“Under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), a court may award equitable relief against any person, including a non-fiduciary, who knowingly participates in a fiduciary’s breach of duty and prohibited transactions.”); Harris Trust & Savings Bank v. Salomon Smith Barney Inc., 530 U.S. 238 (2000).
11. McCalla v. USI Insurance Services, LLC, No. 7:26-cv-07691 (S.D. New York, filed Sep. 8, 2026).
12. Raynes v. Arthur J. Gallagher (Illinois), LLC, No. 1:26-cv-11389 (N.D. Illinois, filed Sep. 17, 2026).
13. Wilmer v. Marsh & McLennan Companies, Inc., No. 1:26-cv-08369 (S.D. New York, filed Sep. 25, 2026).
14. Erickson v. Lockton, Inc., No. 4:26-cv-00847 (W.D. Mo., filed Oct. 1, 2026).
15. Whitlock v. Provident Life and Accident Insurance Co., No. 25-cv-0964 (S.D. Cal., UNPUBLISHED)
16. Koo v. Unum Group, No. 2:25-cv-05797, 813 F. Supp. 3d 1062 (C.D. Cal. Dec. 16, 2025)
17. Johnson v. Watts Regulator Company, 63 F.3d 1129, 1133 (1st Cir. 1995).
18. Id.
19. DOL Technical Release 2026-02 (2026).
20. Johnson v. Watts Regulator Company, 63 F.3d 1129, fn 5 (1st Cir. 1995).
21. Cunningham v. Cornell University, 604 U.S. 693 (2025).
22. Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024).