ERISA Voluntary Benefits Compliance Checklist: A Broker’s Guide to Fiduciary Risk in 2026

Voluntary benefits litigation under ERISA is no longer hypothetical. It’s here. If you’re a broker placing accident, critical illness, hospital indemnity, or supplemental life coverage and you haven’t revisited your voluntary benefits compliance posture since last year, you’re already behind. A wave of class action lawsuits filed in late December 2025 has fundamentally changed the ERISA fiduciary risk calculus for every broker and benefits consultant in this space.

This isn’t a theoretical shift. The Schlichter Bogard voluntary benefits lawsuits, brought by the firm that pioneered 401(k) excessive fee litigation and secured billions in settlements, target some of the largest employers in the country along with their benefits consultants: Mercer, Gallagher, Willis Towers Watson, and Lockton. The claims allege that brokers are functional ERISA fiduciaries who breached their broker fiduciary duty by allowing employees to pay excessive premiums while collecting outsized commissions.

For brokers, the message is clear: voluntary benefits fiduciary compliance is no longer optional. Whether or not these initial suits succeed, they signal a permanent expansion of the litigation frontier. Brokers who can demonstrate a prudent, documented process will be the ones who keep their clients and avoid exposure.

Here’s what you need to know and what to do about it.

1. Voluntary Benefits Litigation 2026: What Changed and Why It Matters

Two developments converged to create today’s risk environment:

The Cunningham v. Cornell decision (April 2025). The Supreme Court ruled that plaintiffs alleging ERISA prohibited transactions do not need to preemptively disprove that an exemption applies. Instead, the burden of proving reasonableness falls on the fiduciary defendant. This significantly lowered the bar for bringing prohibited transaction claims to court and surviving a motion to dismiss.

The Schlichter Bogard voluntary benefits lawsuits (December 2025). Armed with the Cunningham framework, Schlichter filed near-identical class actions against United Airlines/Mercer, Labcorp/WTW, CHS/Gallagher, and Allied Universal/Mercer and Lockton. As Holland & Knight’s analysis details, the complaints argue that employers endorsed voluntary benefit programs beyond what the DOL safe harbor permits, making those programs subject to ERISA. They further allege that the brokers who placed them are fiduciaries who violated their duties.

ERISA Broker Fiduciary Duty: Why This Targets You Directly
These lawsuits don’t just target employers. They explicitly name benefits consultants as co-defendants and argue that brokers exercised discretion in carrier selection, plan design, and commission structures, which would make them functional ERISA fiduciaries. If courts agree, every broker placing voluntary benefits could face fiduciary liability for failing to benchmark costs, disclose commissions, or document a prudent selection process.

The underlying theory mirrors the playbook that transformed 401(k) litigation: start with a few high-profile defendants, establish favorable precedent, then scale. As IMA Financial Group notes, emerging data suggests more than 80% of worksite and voluntary benefit arrangements may actually be subject to ERISA. That means the initial four suits are likely just the first wave.

2. The DOL Safe Harbor for Voluntary Benefits: Where Brokers Get Tripped Up

Many brokers assume that because voluntary benefits are employee-paid and optional, they automatically fall outside ERISA. That assumption is dangerous. As Ropes & Gray’s analysis explains, the ERISA voluntary plan safe harbor requirements at 29 C.F.R. § 2510.3-1(j) are narrow, and all four of the following conditions must be met for the exemption to apply:

• No employer contributions: Benefits must be funded entirely by employee payroll deductions. Even pre-tax treatment through a cafeteria plan may constitute an employer contribution in some interpretations.
• Completely voluntary participation: Employees must freely choose to enroll. Default enrollment, incentives tied to participation, or conditioning other benefits on enrollment can negate voluntariness.
• No endorsement by employer: The employer’s only permitted role is allowing the insurer to publicize to employees and collecting premiums via payroll deduction. Using company branding, selecting carriers, assisting with claims, or including plans in benefits guides can all constitute endorsement.
• No consideration to employer: The employer cannot receive cash or other benefits from the insurer or broker beyond reasonable compensation for actual administrative services (payroll deduction processing). Indirect benefits like bundled pricing, broker kickbacks, and service add-ons can disqualify the exemption.

The endorsement requirement (condition 3) is where most arrangements fail. As Maynard Nexsen’s safe harbor guide documents, courts have found endorsement in activities that feel routine to most brokers: putting the employer’s logo on enrollment materials, sending enrollment reminders from the employer’s email, negotiating plan terms with carriers, or even just including the voluntary plan in the company’s benefits guide alongside employer-sponsored coverage.

The Schlichter complaints specifically cite employers’ Form 5500 filings as evidence that they themselves treated voluntary plans as ERISA-covered, even while assuming the safe harbor applied. Jackson Lewis’s litigation analysis highlights this disconnect between operational practice and compliance posture as exactly the kind of gap that creates litigation exposure.

3. Your 2026 ERISA Voluntary Benefits Compliance Checklist for Brokers

This checklist is organized around your actual workflow, from onboarding a new client through ongoing account management. As Mayer Brown attorneys have warned, this litigation could have a chilling effect on employers offering voluntary benefits at all. That makes a broker’s ability to guide clients through proper compliance even more valuable. Work through each section with every group that has voluntary benefits on the books.

1. Client Onboarding and Renewal Review
   1. Audit the employer’s safe harbor status: For each voluntary benefit, determine whether all four DOL safe harbor conditions are currently met. NFP’s safe harbor walkthrough provides a detailed breakdown of each condition. Don’t assume. Document. If any condition is questionable, the safest approach is to treat the plan as ERISA-covered.
   2. Review Form 5500 filings for consistency: Check whether the employer has filed Form 5500s that list the voluntary plan, include Schedule A insurance data, or use benefit codes that indicate ERISA coverage. Inconsistency between operational assumptions and regulatory filings is a primary attack vector in the current lawsuits.
   3. Examine enrollment materials for endorsement signals: Look for employer logos, language that positions the plan as part of the employer’s benefits package, employer-branded enrollment portals, or any communication that goes beyond neutral facilitation. Honigman’s compliance review catalogs the specific employer activities courts have treated as endorsement, including simply including a voluntary plan in the same benefits guide as medical and dental coverage.
   4. Document the carrier/product selection rationale: Can you show why this carrier and this product were selected? Was there an RFP or market survey? Were premiums compared to alternatives? The absence of a documented selection process is central to the fiduciary breach allegations in the current suits.
2. Plan Design Risk Assessment
   1. Identify high-risk product categories: Accident, critical illness, hospital indemnity, and cancer insurance are the products specifically targeted in the December 2025 lawsuits. Prioritize these for review. Supplemental life and disability may follow.
   2. Evaluate loss ratios: The lawsuits cite low loss ratios as evidence that premiums were unreasonable. If a product has a loss ratio significantly below industry benchmarks, it warrants closer scrutiny and documentation of why it still represents a prudent choice.
   3. Assess commission structures: Map all direct and indirect compensation flowing from the voluntary benefits arrangement, including your commissions, carrier bonuses, override payments, and any service add-ons. Benchmark these against comparable arrangements. If your commission structure looks outsized relative to the value delivered, address it proactively.
   4. Review claims denial patterns: High claims denial rates for voluntary products can become evidence that the product isn’t serving participants’ interests. Know the denial rates for every voluntary product you’ve placed.
3. Carrier Due Diligence and Documentation
   1. Establish a repeatable carrier evaluation process: Document a formal methodology for evaluating carriers: financial strength, product terms, pricing competitiveness, claims responsiveness, and loss ratio history. The process matters more than the outcome. Courts evaluate whether the fiduciary’s method was prudent, not whether the result was optimal.
   2. Conduct periodic benchmarking: Don’t evaluate carriers only at initial placement. Establish a regular cadence (annual at minimum) for benchmarking premiums, commissions, and loss ratios against the broader market. This mirrors the governance framework that 401(k) fiduciaries adopted after the first wave of excessive fee litigation.
   3. Clarify fiduciary status in service agreements: Review your engagement agreements with employer clients. Do they clearly define your role and responsibilities? Do they specify whether you are acting in a fiduciary capacity with respect to voluntary benefits? Ambiguity in service agreements was cited in the Schlichter complaints as evidence of discretionary control.
   4. Maintain a paper trail of alternatives considered: When placing or renewing voluntary products, document the alternatives you evaluated and why the selected option was appropriate. A record showing that multiple carriers were considered and compared is significantly more defensible than a single-carrier recommendation.
4. Ongoing Monitoring and Review Triggers
   1. Set annual review cycles for every voluntary product: Treat voluntary benefits with the same governance rigor as retirement plans. Annual reviews should cover premium trends, loss ratios, commission levels, employee utilization, and any changes to the employer’s administration of the program.
   2. Monitor for endorsement creep: Employers often drift into endorsement behavior over time. They add voluntary benefits to the company intranet, have HR actively recommend products, or market the plan during open enrollment alongside employer-sponsored benefits. Set up a periodic check (at least annually) to confirm the employer’s hands-off posture is being maintained.
   3. Watch for market and regulatory shifts: Track the outcomes of the Schlichter Bogard cases and any DOL guidance that follows. Resources like Gibson Dunn’s quarterly ERISA litigation updates provide ongoing tracking of case developments, settlements, and regulatory statements that could change the compliance landscape.
   4. Flag commission changes or carrier incentive shifts: Any change in how you’re compensated, whether new override tiers, carrier bonuses for volume, or bundled service incentives, should trigger a review of whether the arrangement still meets reasonableness standards.

4. Broker Commission Benchmarking and the Data-Driven Compliance Advantage

The common thread in every recommendation above is documentation and broker commission benchmarking. The brokers who will weather this voluntary benefits litigation wave are the ones who can demonstrate, with data, that their process was prudent.

This is where benefits technology shifts from a productivity tool to a compliance asset. When you have access to market-wide plan data, carrier ratings, premium benchmarks, and sentiment insights across thousands of employers, you’re not relying on instinct or carrier relationships to justify your recommendations. You’re building a defensible, data-backed record.

Consider what a data-driven approach gives you:

• Carrier selection documentation: Market ratings and comparisons provide an auditable basis for why you selected a particular carrier. Not because of a relationship, but because the data supported it.
• Premium benchmarking: Real-time access to how premiums compare across size tiers, regions, and product categories eliminates the guesswork that plaintiffs exploit. If you can show that a client’s premiums are within market norms, the “excessive premium” argument weakens significantly.
• Commission reasonableness evidence: Benchmarking your compensation against market averages and documenting that it falls within reasonable bounds is the single most direct defense against the self-dealing allegations in the current suits.
• Ongoing monitoring evidence: A platform that tracks plan performance, carrier ratings, and market shifts over time creates a continuous audit trail, not a point-in-time snapshot that may look stale in litigation.

The BenefitFlow Advantage:
BenefitFlow’s platform gives brokers access to carrier ratings, plan benchmarks, and market intelligence across thousands of employers, including the small-group insights that most data tools miss entirely. Combined with AI-powered research and CRM integration, it creates the documentation backbone that today’s compliance environment demands. If you’re placing voluntary benefits without this kind of data infrastructure, you’re operating without a safety net.

5. Your Voluntary Benefits Fiduciary Compliance Action Plan

If you’ve read this far and you’re wondering where to start, here’s what to do Monday morning:

This week: Pull a list of every client where you’ve placed voluntary benefits. For each, confirm whether a Form 5500 has been filed that references the voluntary plan and whether enrollment materials contain employer branding or endorsement language.

This month: For your highest-exposure accounts (largest employers, highest-commission arrangements), complete the full checklist above. Document your carrier selection rationale and benchmark commissions against market data.

This quarter: Establish a repeatable annual review process for all voluntary benefits across your book. Build the monitoring cadence before you need it, not after a demand letter arrives.

The Bottom Line

The voluntary benefits compliance landscape changed permanently in December 2025. Brokers who treat this as someone else’s problem, or who assume safe harbor protections they haven’t verified, are exposed. But brokers who adopt a documented, data-driven approach to carrier selection, commission transparency, and ongoing monitoring will not only mitigate their own liability. They’ll differentiate themselves in a market where compliance rigor is becoming a competitive advantage.

The playbook isn’t complicated. It’s the same approach that prudent retirement plan advisors adopted after the first wave of 401(k) fee litigation: benchmark, document, monitor, repeat. The brokers who started early came out ahead. The ones who waited paid the price.

Don’t wait.

Additional Resources

All primary sources are linked inline throughout this article. For additional context on the voluntary benefits litigation landscape, we also recommend:

• Ropes & Gray Podcast: When Voluntary Benefits Become Involuntary Lawsuits (March 2026)

• 401(k) Specialist: ERISA Litigation Risks in 2026, How to Reduce Exposure (February 2026)

• New York Law Journal: Employers Offering Voluntary Benefits Face a New Wave of ERISA Litigation (February 2026)

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. The compliance landscape around voluntary benefits and ERISA is evolving rapidly. Brokers should consult with qualified ERISA counsel to evaluate their specific circumstances and obligations.