Schlichter Bogard Files Suit Over Voluntary Benefits Program Fees

Law firm Schlichter Bogard LLP filed another lawsuit targeting employers’ voluntary benefits programs for allegedly charging participants “excessive fees,” continuing a growing campaign to apply Employee Retirement Income Security Act fiduciary standards to supplemental insurance offerings such as coverage of accidents, cancer screenings and critical illnesses.

The latest complaint from the prominent plaintiffs’ law firm adds to a string of lawsuits it has filed in recent months alleging that employers and plan fiduciaries have allowed workers to pay inflated premiums for supplemental insurance products while brokers and consultants collected excessive commissions. Employees generally pay all of the premiums for these types of voluntary insurance.

The spate of voluntary benefits cases presume that the benefit programs at issue are all considered to be employee welfare benefit plans under ERISA. Courts have not yet ruled definitively on how or if ERISA applies to voluntary benefits.

The most recent case, Haller et al. v. Banner Health et al., filed in U.S. District Court for the District of Arizona, as in other similar complaints, argues that the defendants breached their fiduciary duties by failing to properly manage the plan by not monitoring, negotiating or ensuring reasonable carrier selection, broker commissions and loss ratios, thereby causing plan participants to pay excessive premiums.

The complaint names Banner Health; its adviser, Lockton Companies; and BCInsourcing LLC as fiduciaries for the Banner plan.

Schlichter Bogard filed four similar lawsuits in December 2025, and at least one other similar case was filed by a different plaintiffs’ firm, Keller Rohrback LLP, this year.

Andrew Schlichter, who is leading Schlichter Bogard’s efforts in the voluntary benefits cases, argues that employers sponsoring voluntary benefits plans have the same duty to act solely in workers’ best interests that courts have long recognized in retirement plan cases.

“We wanted to and continue to want to provide a check on employers and other fiduciaries who aren’t doing their best for employees,” Schlichter said in an interview with PLANADVISER discussing voluntary benefits litigation, prior to the most recent filing. “If you’re a fiduciary, you ought to do what’s in the best interests of your participants, period.”

A New Target in ERISA Litigation

The lawsuits focus on employee-paid supplemental insurance products often marketed as financial protection against serious illness or injury. Unlike traditional employer-sponsored health insurance, voluntary benefits are typically funded entirely by workers through payroll deductions.

According to Schlichter, the payment structure creates a risk that employers pay insufficient attention to pricing and plan quality because the company itself bears none of the cost.

“What we have seen in this industry is that because employers aren’t on the hook—they’re not paying any part of the voluntary benefits insurance—in a lot of plans, employers are allowing very, very, very expensive supplemental insurance,” Schlichter says.

The complaints allege that some plans included broker commissions as high as 40%, far greater than what plaintiffs describe as industry norms. Schlichter contrasted those arrangements with plans he says operate with commissions closer to 5% or 6%.

The lawsuits contend that excessive commissions and poor loss ratios resulted in workers paying inflated premiums for coverage that delivered comparatively limited value.

“These fiduciaries have to do what’s in the best interest of participants,” Schlichter says. “They have to put their plan participants’ interests first.”

The Banner Health Master Health and Welfare Plan had nearly 49,000 participants at the end of 2024, according to its most recent Form 5500 filing.

A Banner Health spokesperson said they could not comment on active litigation claims. Lockton and BCInsourcing LLC could not be reached for comment.