Employers Faced Lawsuits Over Benefit Commissions

Employees filed class action suits claiming employers failed to monitor insurance premium commissions.

Updated on Sept. 25, 2026 in Financial Planning

Employers Faced Lawsuits Over Benefit Commissions

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

Starting in December 2025, plaintiffs initiated class action lawsuits against major employers including United Airlines, Allied Universal, and Banner Health. The suits allege that these companies breached their fiduciary duties under the Employee Retirement Income Security Act by failing to monitor broker commissions.

Why it matters

The litigation suggests that employers may have failed to assess whether insurance premiums and compensation remained reasonable for employees. Plaintiffs are leveraging arguments and evidence patterns previously established during 401(k) fee litigation to challenge these voluntary benefit structures.

Plaintiffs cite cases where brokers received millions in commissions, such as the $23 million paid to Mercer and Lockton by Allied Universal. Meanwhile, the United Airlines case highlights a historical loss ratio for products under 50 percent.

The players

United Airlines

This major airline is one of the defendants named in the class action litigation regarding voluntary benefit broker commissions.

Allied Universal

This security services provider faces allegations in the Fellows v. Allied Universal lawsuit concerning broker compensation.

Banner Health

This non-profit health system is among the employers named in the recent wave of ERISA-based class action lawsuits.

Mercer

This global consulting firm is identified in legal filings as a broker that received significant commissions from the disputed benefit plans.

Lockton

This insurance brokerage firm is named alongside Mercer in the Fellows v. Allied Universal case as a recipient of high commission payments.

The details

Using data from Form 5500 filings, the lawsuits allege that Mercer and other brokers received excessive commissions embedded within employee-paid insurance premiums. Plaintiffs contend that defendants failed to uphold their duties of prudence and loyalty by not ensuring these costs provided adequate value to the workforce.

The commission period cited in the Pimm v. United Airlines case spanned 2020 to 2024.
The class action lawsuits began in December 2025.

Market Dynamics

These lawsuits extend the legal strategies used in 401(k) fee litigation to voluntary insurance benefits. This shift signals a broader trend where fiduciary scrutiny is expanding beyond retirement savings to include all employer-sponsored plan costs.

These legal challenges may lead to increased transparency and lower costs for employees participating in company-sponsored insurance plans. Readers should monitor their annual benefit disclosures for information regarding plan administrative fees and broker compensation structures.

The takeaway

Employers must be prepared to defend the reasonableness of fees and commissions embedded in employee benefit plans. Workers should proactively review their benefit enrollment materials to understand how third-party commissions might influence their total out-of-pocket costs.