Aon Sued Under ERISA Over Alleged Profits From Employee Benefits Program

A lawsuit filed in federal court alleges that Aon PLC improperly profited from its employee benefits program by acting as both the fiduciary selecting insurance products and the broker receiving commissions and fees from those products.

The lawsuit, Dale Daniel et al. v. Aon PLC et al., was filed October 23 in the U.S. District Court for the Northern District of Illinois. The plaintiffs—current or former Aon employees who participated in Aon Benefit Plan, Aon’s employee welfare benefits plan, and purchased voluntary insurance products through payroll deductions—allege that Aon failed to avoid self-dealing and conflicts of interest.

According to the complaint, which quotes Form 5500 Schedule A disclosures about the benefits offerings, Aon and its affiliated entities received $14.83 million between 2020 and 2024 in commissions and administration fees.

Unlike most litigation under the Employee Retirement Income Security Act involving retirement plans, the lawsuit focuses on voluntary employee welfare benefits and whether an employer can receive commissions and fees from benefit arrangements it selects for employees. The complaint alleges three ERISA violations: prohibited transactions under Section 406(b), breach of the fiduciary duty of loyalty and failure to monitor.

The plaintiffs also argue that ERISA’s voluntary-benefit safe harbor does not apply because Aon allegedly received compensation in connection with the benefit offerings. According to the complaint, the safe harbor “strictly mandates that the employer or plan sponsor may receive zero consideration, cash, financial incentives or profit in connection with the voluntary program.”

Plaintiffs claim that health, dental and insurance companies providing benefits to Aon employees paid commissions to various Aon-related organizations, including Aon Insurance Agency LLC, Hewitt Insurance Brokerage LLC, Aon Consulting Inc., Aon Consulting of New Jersey, Aon Risk Services Central Inc., Custom Benefit Programs Inc. and Aon Coalition Purchasing Group.

According to the plaintiffs, Aon did more than provide access to benefits; it allegedly acted as a fiduciary by exercising discretionary authority over selecting carriers and products, structuring and marketing benefits, enrollment and administrative arrangements. Furthermore, the plaintiffs accuse Aon of putting its financial interests ahead of participants’ interests.

“Aon occupied both sides of the voluntary benefits transactions,” the complaint states. “In its capacity as plan sponsor and fiduciary, Aon exercised authority and discretion concerning which carriers and products would be made available through the plan and on what terms. At the same time, in its capacity as broker and benefits consultant, Aon stood to receive commissions and other compensation generated by the very insurance arrangements that it selected, recommended, retained, and administered for the plan.”

The complaint was filed one month after a federal judge in California found that an employer’s actions brought a supplemental benefit under ERISA, but ultimately ruled in the company’s favor based on the facts and circumstances of that case . That case is Whitlock v. Provident Life Accident and Insurance.

Plaintiffs are asking the court to certify a proposed class that would include all people who purchased Aon’s voluntary benefit products between October 23, 2020, and the date of judgment. Aon Benefit Plan had 12,890 participants in 2020 and 13,112 participants in 2024, according to the complaint.

The plaintiffs also requested the appointment of an independent fiduciary to run the benefit plan, the recovery of any profits Aon allegedly made from the plan, and if needed, that the money be placed in a constructive trust for participants.

In 2025, 22% of ERISA lawsuits involved health plans, according to an analysis by law firm Encore Fiduciary. In December 2025, the law firm Schlichter Bogard LLC filed four complaints in district courts over premiums charged for voluntary benefits not subsidized by employers, including accident, critical illness, cancer and hospital indemnity insurance.

PLANADVISER is awaiting comment from the law firm Capozzi Adler PLC, which represents the plaintiffs, and Aon.