On December 23, 2025, Schlichter Bogard LLC filed its first healthcare ERISA cases against United Airlines, Labcorp, CHS, and Universal Services over voluntary benefits. This is the same firm with three unanimous Supreme Court victories, over $750 million in settlements, and an estimated $2.8 billion annual reduction in 401(k) fees.
Each case generally alleges that the employers and their benefits brokers breached their ERISA fiduciary duties and caused the participants to pay excessive premiums due to failures in:
- engaging in a prudent process when selecting insurance offerings;
- monitoring the commissions received by the benefits brokers; and
- monitoring the loss ratios on the various insurance policies.
Industry experts anticipate that this is only the beginningfor lawsuits of this nature. As fiduciary litigation continues to evolve, education on what fiduciary responsibility entails and how to make careful, informed decisions about benefits will be critical to safeguarding your organization from potential litigation.
Who is a Plan Fiduciary?
Under ERISA, a fiduciary is anyone who exercises any discretionary authority or discretionary control over the management of Health & Welfare or Qualified Retirement Plans. It’s important to understand that an individual does not require a fiduciary “title” to be considered the plan fiduciary.
ERISA Fiduciary Basics
ERISA §404 outlines the duties of a plan fiduciary and requires fiduciaries to perform their duties:
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solely in the interests of participants and beneficiaries;
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for the exclusive purpose of providing plan benefits, or for defraying reasonable expenses of plan administration;
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with the care, skill, prudence, and diligence that a prudent person acting in a like capacity and familiar with such matters would use; and
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in accordance with the documents and the instruments governing the plan insofar as those documents and instruments are consistent with ERISA.
Simply put, a plan fiduciary’s main job is to make educated decisions regarding the benefits they adopt for their organization. Conducting appropriate due diligence and documenting the decision-making process can help employers minimize the risk of fiduciary breach, which can lead to litigation.
What Does This Mean for My Organization?
Ultimately, your employees trust you to offer voluntary benefits that are in their best interest and would complement their benefits package. This trust is critical to both maintaining a good relationship with your employees and being a prudent fiduciary. Violating this trust by failing to perform the proper ERISA duties can leave both you and your employees vulnerable to unjust costs and ineffective or irrelevant benefit offerings.
How Kapnick Can Help
We are in an era where class-action lawsuits are becoming more common, forcing the industry into overdue, well-adopted fiduciary processes. Kapnick’s unique position in the market as one of the Midwest’s largest independently owned insurance brokers allows us to take a holistic approach to our benefits consulting, providing you with the most effective design and implementation possible.
Kapnick’s strategic process helps us directly align with your organization’s goals, using four key meeting points to reflect, assess opportunities, focus on future goals, and implement your plans as you decide. Our benefits experts are ready to help you navigate these complex issues from start to finish, ensuring that you and your organization are compliant and operate in your employees’ best interests.
