Schlichter Targets Voluntary Benefits: The Next Wave of ERISA Litigation Has Arrived

The year of the self-funded fiduciary is here. Are you ready?

On December 23, 2025, Schlichter Bogard LLC filed a coordinated wave of ERISA lawsuits targeting voluntary benefits programs, alleging that participants were forced to pay premiums 30% to 600% higher than those for comparable coverage elsewhere.

While this isn't the direct self-funded health plan litigation the industry has been anticipating, it represents something potentially more significant: Schlichter's first major foray into the benefits and healthcare space—and a clear signal that the fiduciary scrutiny that transformed 401(k) plans is coming for employer-sponsored benefits.

"401(k) oversight is here for health plans" — Stephen Carrabba

The Lawsuits: Who's Named and What's Alleged

In classic Schlichter fashion, suits were filed against multiple employers on the same day—a "litigation dump" that signals more are likely coming.

Employers Named:

• United Airlines

• CHS/Community Health Systems Inc.

• Universal Services of America LP

• Laboratory Corp. of America Holdings

Benefits Consultants Named as Co-Defendants:

• Gallagher Benefit Services Inc.

• Mercer Health and Benefits Administration LLC

• Lockton Companies LLC

• Willis Towers Watson US LLC

The consultants are accused of "engaging in self-dealing at the expense of participants"—a significant escalation that puts the entire benefits consulting industry on notice.

What Benefits Are Targeted?

The suits focus on voluntary benefits—programs that are typically employee-paid and not subsidized by employers:

• Accident insurance

• Critical illness insurance

• Cancer insurance

• Hospital indemnity insurance

The Core Allegation: 30-600% Premium Overcharges

The lawsuit against United Airlines (with Mercer as co-defendant) makes a striking claim: as a result of United's failure to exercise reasonable diligence in the administration of the Plan, Plan participants were allegedly forced to pay between 30% and over 600% higher premiums for comparable coverage elsewhere.

This "failure to exercise reasonable diligence" language mirrors the procedural prudence standard central to 401(k) fee litigation.

Why This Matters for Self-Funded Health Plans

While these suits target voluntary benefits rather than self-funded medical plans, the implications are profound:

• The Legal Framework Is Identical — The same ERISA fiduciary standards apply to self-funded health plans

• Consultants Are Now Targets — Brokers and consultants are no longer shielded from fiduciary liability

• The "Failure to Monitor" Standard — Passive oversight isn't sufficient under ERISA

• This Is Likely Just the Beginning — Self-funded medical plan litigation may well be next

What Plan Sponsors Should Do Now

Immediate Actions:

• Audit consultant compensation — Know exactly how your benefits consultants are paid

• Request fee disclosures — Demand transparency on all compensation arrangements

• Benchmark premiums and fees — Demonstrate that costs are reasonable relative to market alternatives

• Document decision-making — Create a paper trail showing prudent process

• Demand access to your full claims and vendor data — Ensure you can independently validate plan performance and spend

• Conduct an independent claims accuracy and payment review — Validate outcomes beyond TPA guarantees and reporting

• Evaluate pharmacy and vendor contracts for conflicts and leakage — Identify hidden incentives and misaligned arrangements

• Review your Summary Plan Description for enforceability gaps — Confirm it reflects actual plan intent and protects the plan

• Review your ASO agreement for accountability protections — Ensure audit rights, performance standards, and remedies are clearly defined

• Implement ongoing vendor performance monitoring — Track measurable outcomes, not assumptions or assurances

• Build a fiduciary compliance file — Centralize documentation, benchmarking, review findings, and corrective actions

• Engage an independent fiduciary support partner — Strengthen oversight, reduce exposure, and confirm prudent process

The ClaimInformatics Perspective

At ClaimInformatics, we've long warned that fiduciary scrutiny applied to 401(k) plans would inevitably extend to healthcare benefits. These lawsuits confirm that the timeline has accelerated.

We help plan sponsors:

• Conduct independent fee and claims reviews to validate consultant recommendations

• Benchmark costs against market alternatives

• Identify conflicts of interest in vendor and consultant relationships

• Document oversight processes to create defensible fiduciary records

• Monitor service provider performance with independent validation

Bottom Line

Schlichter Bogard's Christmas Eve litigation dump marks a pivotal moment for employer-sponsored benefits. These suits establish that:

• Consultants can be held liable as co-defendants for fiduciary breaches

• Premium reasonableness must be demonstrated through benchmarking

• Passive oversight is insufficient — employers must exercise "reasonable diligence"

• Conflicts of interest create litigation exposure regardless of industry norms

Schedule a complimentary consultation to assess your plan's fiduciary documentation and identify gaps before litigation arrives.