Employers Are Asking Harder Questions About Voluntary Benefits. Carriers Need Better Answers.

On December 23, 2025, the law firm known for launching the 401(k) excessive-fee litigation wave filed four class actions over a different kind of benefit: employee-paid accident, critical illness, and hospital indemnity insurance. The suits name United Airlines, LabCorp, Community Health Systems and Universal Services of America, along with four national benefits consultants. They allege that employees paid excessive premiums because plan fiduciaries failed to monitor carrier selection, broker commissions and loss ratios.

The cases are at an early stage. As of late May 2026, motions to dismiss were still being briefed. But carriers shouldn’t wait for a ruling to take the point: voluntary benefits are no longer a low-scrutiny corner of the benefits package. As employers and brokers start asking harder questions about these programs, many of those questions will land on carriers and TPAs.

Why voluntary benefits are now an ERISA question

ERISA requires plan fiduciaries to act “solely in the interest of the participants and beneficiaries” and with the “care, skill, prudence, and diligence” that a prudent person would use (29 U.S.C. § 1104(a)(1)). The Department of Labor’s guide for group health plan fiduciaries is direct about what that means for vendors: “Hiring a service provider in and of itself is a fiduciary function,” and an employer “must monitor the service provider periodically.” Our earlier post on ERISA payment integrity covers how these duties apply to claims accuracy in more depth.

Many employers have assumed those duties don’t reach employee-paid voluntary coverage. A DOL regulation excludes a group insurance program from ERISA when the employer makes no contributions, participation is completely voluntary, the employer receives no consideration beyond reasonable pay for payroll administration, and the employer’s role is limited to letting the insurer publicize the program and collecting premiums through payroll deduction, “without endorsing the program.”

The new complaints test that assumption. They argue that common practices, such as marketing the coverage to employees and sending enrollment reminders, amount to endorsement and make the program an ERISA plan. According to one law firm’s tracking, the defendants’ motions so far have not disputed ERISA coverage. If these programs are ERISA plans, employers owe participants the same duties of prudence and monitoring that apply to their medical plans, including the duty to monitor the carrier.

The pressure on employers is coming from several directions

The lawsuits are one sign of a broader shift. A few others:

• Research. A survey of health plan administrators in Cambridge University’s Journal of Law, Medicine & Ethics concluded that “more than one-third of surveyed employers are likely in violation of ERISA,” in part because many don’t seek competing offers or compare prices.
• Litigation. Suits over employer drug-plan costs have had a rough start. Federal courts dismissed the cases against Johnson & Johnson and Wells Fargo for lack of standing, finding it too speculative that a better vendor deal would have lowered what employees paid. Both dismissals are on appeal. Plaintiffs’ lawyers may find standing easier to argue in voluntary benefits cases, where employees often pay the full premium. Meanwhile, a federal court let a similar suit against JPMorgan Chase move forward in March 2026. And the Supreme Court’s 2025 decision in Cunningham v. Cornell University made prohibited-transaction claims, one of the theories in the voluntary benefits suits, easier to plead.
• State financial officers. In December 2025, treasurers, auditors and comptrollers from more than a dozen states wrote to Fortune 500 companies asking them to undertake “a detailed payment-integrity analysis” of their healthcare spending. They asked how often each company audits its claims, what percentage of claims it audits, who does the auditing, and whether vendor contracts “limit or block” a full audit.

The officers’ letter focuses on medical and pharmacy vendors, not voluntary benefits. But its questions preview what any benefits vendor should expect to answer.

What this means for carriers and TPAs

Employers can’t answer these questions alone. They depend on their carriers and administrators for claims data, accuracy metrics and audit access. Expect that dependence to show up in four places:

• RFPs and broker questionnaires. Brokers are now defendants in fiduciary suits themselves. They have every reason to ask carriers for claims accuracy rates, audit results and fraud controls, and to favor carriers with clear answers.
• Renewals. An employer that monitors its vendors needs something to monitor. Carriers that report accuracy and turnaround data make that job easier. Carriers that can’t give the employer a reason to shop.
• Pricing. The voluntary benefits complaints center on whether premiums are reasonable for the coverage. Carriers will need claims data clean enough to show that pricing reflects actual, valid claims experience.
• Audit access. Contracts that restrict audits now draw attention. Carriers that welcome audits and can produce clean records quickly will stand out.

Payment integrity means paying correctly, not paying less

Carriers need to get this part right. The voluntary benefits suits allege, in part, that employees paid too much for what they received. A payment integrity program built only to deny or reduce claims would feed that narrative.

The goal is accuracy in both directions: stopping overpayments, duplicates and fraud, and catching underpayments, such as a covered benefit left off a claim. Paying correctly protects members who are owed benefits, keeps premiums tied to legitimate claims experience, and creates a record that employers and brokers can point to when they document how they monitored the program. That record won’t decide a lawsuit, but it answers the questions fiduciaries are now being asked.

Timing matters too. In a review of Medicare’s claim review programs, the Government Accountability Office found that prepayment reviews “can better protect Medicare funds because not all overpayments can be collected” and are “consistent with CMS’s goal to pay claims correctly the first time.” The same logic applies to private carriers. And every recovery effort risks friction with a member who was paid in good faith.

The supplemental benefits gap

Major medical has decades of payment integrity infrastructure behind it: prior authorization, clinical code edits, DRG validation and an established market of recovery vendors. Supplemental health hasn’t had the same investment, even though it’s a substantial business. Carriers wrote $2.5 billion in new workplace supplemental health premium in the first nine months of 2025, according to LIMRA.

Supplemental claims also go wrong in different ways. Accident, critical illness and hospital indemnity policies pay fixed benefits triggered by events such as a diagnosis, an admission or an injury. The typical errors aren’t the coding problems that medical claim edits were built to catch. They’re duplicate submissions, claims filed inside a waiting period, benefits paid past a policy limit, diagnoses that don’t support the benefit claimed, and accident claims that don’t match the accident report. Catching them before payment takes validation designed around how these products actually work.

The market is also getting tighter. LIMRA reports that new supplemental health premium fell 5 percent year over year through the first nine months of 2025. When new sales are harder to come by, keeping existing accounts matters more, and documented accuracy is a retention tool.

What carriers should do now

• Validate claims before payment. Check every claim line against the policy terms, including eligibility, waiting periods, benefit limits, duplicates and diagnosis-to-benefit fit, before money goes out.
• Measure accuracy in both directions. Track overpayments prevented and underpayments corrected, not just dollars recovered, and report them in a form an employer could put in its fiduciary file.
• Make audits easy. Offer claims-level data and audit access as a standard part of the relationship, before anyone asks.
• Give brokers something to show. Brokers need evidence that they monitored the carriers they recommend. Documented accuracy metrics make that easier, and make your products easier to recommend.

About Trestl

Trestl builds prepayment integrity for voluntary benefits. It checks Hospital Indemnity, Accident and Critical Illness claims before they’re paid, flags overpayments and underpayments alike, and documents the results for carriers, TPAs and their clients. If your clients are starting to ask harder questions, let’s talk.