Lawsuits Challenge Voluntary Benefits Plan Costs
A federal court ruling highlights potential ERISA oversight for employer-sponsored voluntary benefits programs.
Updated on Oct. 24, 2026 in Financial Planning
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Plaintiffs filed twelve lawsuits since December 2025 alleging that employers breached fiduciary duties by failing to negotiate lower premiums for voluntary benefits. A federal judge on September 30, 2026, ruled that certain employer actions can bring these supplemental benefits under ERISA purview.
Why it matters
These legal actions challenge whether employers have a fiduciary obligation to monitor broker commissions and consultant fees within voluntary programs. If more plans are found to fall under federal oversight, companies may face stricter compliance requirements to avoid litigation.
A total of 12 lawsuits regarding voluntary benefits have been filed since December 2025, including four complaints from the firm Schlichter Bogard LLP. It remains to be seen if these cases will set a lasting legal precedent for program oversight.
The players
Andrew Schopler
He is a U.S. District Judge for the Southern District of California who issued a ruling on ERISA coverage.
Schlichter Bogard LLP
This law firm filed four complaints against employers last year concerning voluntary benefits programs.
Department of Labor
This federal agency maintains safe harbor requirements that determine if benefits programs are exempt from ERISA.
The details
The complaints allege that employers failed to conduct a request for proposals process, resulting in higher premiums driven by excessive broker commissions. Employers generally avoid ERISA regulation if they meet four Department of Labor safe harbor requirements, but the recent ruling suggests that receiving fees or endorsing policies may void that protection.
Timeline
December 2025: The start of the current period of voluntary benefits litigation.
September 30, 2026: U.S. District Judge Andrew Schopler issued a ruling regarding ERISA coverage.
Market Dynamics
These legal challenges mark a significant attempt to apply the oversight frameworks of the Employee Retirement Income Security Act (ERISA) to voluntary benefit plans. This shift follows a pattern where plaintiffs seek to expand the scope of federal fiduciary standards to previously unregulated programs.
Employees may eventually see changes to how their voluntary benefits are selected and negotiated if employers adopt stricter oversight to mitigate legal risk. Participants should monitor their benefits statements to understand the impact of any changes to plan premiums or provider fee structures.
The takeaway
These lawsuits underscore the importance of understanding the regulatory status of employer-provided supplemental benefits. Employees should review their plan documents to see if their benefits are classified under ERISA or qualify for independent safe harbor exemptions.
Further reading
For more information on the evolving standards for retirement and benefit plans, visit the Financial Planning section.
Source note: This article includes information reported by PLANADVISER.
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Should federal regulations cover voluntary employee benefit plans to ensure lower premiums for workers?
