New Voluntary Benefits Class Actions Against Both Employers and Service Providers 

December 2025 brought a new type of class action involving both employers/plan sponsors and their service providers. Four new putative class actions were filed by the same plaintiffs' firm asserting ERISA breach of fiduciary duty and prohibited transaction claims against plan sponsors/employers and their brokers with respect to the offering of employer-sponsored voluntary benefits. Three cases were filed in the Northern District of Illinois, Braham v. Laboratory Corporation of America Holdings, No. 25-cv-15583, Brewer v. CHA/Community Health Systems, No. 25-cv-15578, and Pimm v. United Airlines, Inc., No. 25-cv-15581, and one in the Southern District of New York, Fellows v. Universal Services of America, LP d/b/a Allied Universal, No. 25-cv-10659. There have been no responsive filings yet. 

The voluntary benefits at issue in these cases include accident, critical illness, and hospital indemnity insurance programs, which are typically fully funded by employees. The complaints refer to studies citing a recent increase in the number of voluntary benefits offered by employers. The complaints also allege that the voluntary benefits at issue do not meet the voluntary plan safe harbor provision contained in ERISA regulation 29 C.F.R. § 2510.3-1(j). 

The allegations in all four cases are similar and include that: (1) plan sponsors/employers breached their ERISA fiduciary of prudence when they failed to diligently select and monitor voluntary benefit offerings and their brokers; (2) plan sponsors/employers engaged in prohibited transactions when they allowed their insurance brokers to collect excessive commissions from plan assets; and (3) named brokers breached their ERISA fiduciary duties and/or engaged in prohibited transactions as ERISA fiduciaries and/or violated ERISA as parties in interest and/or knowing participants. 

An interesting question presented in these cases is whether brokers are ERISA fiduciaries with respect to the allegations at issue. The complaints allege that the brokers at issue are functional fiduciaries given their exercise of discretion in administering voluntary benefit plans, specifically by "screen[ing] the bids they receive from carriers, selectively presenting to the employer only a curated set of alternatives, [and] removing from consideration options on which the brokers seems to provide an insufficient commission" and by setting their own compensation. The complaints also allege functional fiduciary status through the brokers' management or control of the insurance policies at issue, which are alleged to be assets of the plans. 

We previously discussed other examples of novel health plan litigation facing employers and service providers, including excessive fee cases with respect to PBMs, ghost network cases, and claims involving allegedly financially-dominated low-deductible PPOs. 

DOL Urges Third Circuit to Affirm Dismissal of Siemens' Forfeiture Lawsuit

On January 23, 2026, the U.S. Department of Labor (DOL) filed an amicus brief in Cain v. Siemens Corp., No. 25-2564 (3rd Cir.), urging the Third Circuit to affirm the district court's dismissal of the plaintiff's forfeitures lawsuit. On July 31, 2025, the district court dismissed the putative class action lawsuit against Siemens alleging that it violated ERISA by applying plan forfeitures to reduce its voluntary matching contributions. Specifically, the plaintiff asserted three theories: (1) breach of the duty of loyalty, (2) breach of the duty of prudence, and (3) prohibited transactions. The court rejected each claim, holding that Siemens' use of forfeitures was permissible under ERISA and expressly authorized by the Siemens Savings Plan (the Plan). The plaintiff appealed.

In its amicus brief, the DOL supports the district court's dismissal decision and emphasizes that the "Plaintiff's bare allegations that failing to use forfeitures for [paying administrative fees] was imprudent and put Defendant's interests above those of the Plan alone are not sufficient to state a plausible claim for breach of ERISA's fiduciary duties of loyalty and prudence." The DOL further explains that while allocating forfeitures is a fiduciary function, choosing to use them to "offset future employer contributions – an option explicitly granted by the Plan document – does not state a plausible claim for breach." The DOL also points out that dismissal was appropriate because the complaint did not allege "that the fiduciary's administration of the Plan caused him to receive less than the full contribution promised to him by Defendant under the Plan."

The DOL's brief reflects its continued willingness to oppose ERISA litigation theories it views as overreaching or inconsistent with ERISA. By characterizing the plaintiff's position as an attempt to impose fiduciary obligations not found in ERISA or governing plan documents, the DOL underscores a broader policy goal of curbing litigation that relies on duties or benefits beyond those provided under ERISA. 

In the News

DeMario commented in Law360 on the Supreme Court's decision to review the Ninth Circuit's dismissal of the Intel 401(k) target date fund case and the likelihood that this will bring clarity on the "meaningful benchmark" standard for bringing investment underperformance claims under ERISA. 

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