For every dollar Macy’s employees paid for supplemental insurance over six plan years, roughly 37 cents went to the broker. A proposed class action filed October 3, in the US District Court for the Southern District of New York named Macy’s and three Aon entities over that arrangement before the plaintiff voluntarily dismissed it without prejudice. The filing nonetheless illustrates a litigation pattern that has since touched most of the largest benefits brokerages in the country.
The lawsuit, Munson v. Macy’s, Inc., covers accident, critical illness, and hospital indemnity insurance offered to Macy’s employees from 2019 through 2024. The plaintiff alleges that Macy’s employees paid approximately $36.1 million in premiums over that period, of which roughly $13.2 million, or 36.7%, went toward broker commissions and fees. The complaint identifies two spikes: commissions allegedly consumed 50.8% of premiums in 2019, including 65.1% on the critical illness contract, before declining to 22.8% in 2021. They then rose to 62.8% in 2022 when coverage moved from an Allstate subsidiary to an Aflac subsidiary. The plaintiff characterizes that pattern as “heaped” commissions, where a carrier switch generates a large initial payout followed by lower renewal payments.
The complaint names Macy’s, not Aon, as the plan fiduciary. It alleges Macy’s failed to question the commission structure, did not adequately evaluate alternatives, and promoted the products through enrollment materials telling employees coverage was offered “at discounted group rates.” These are allegations, not judicial findings. A commission increase does not by itself establish a fiduciary breach, and the services, coverage terms, and reasons for the carrier transition will all be relevant if the case proceeds.
What makes Munson legally significant is not the dollar amount but the injury theory. The PBM litigation wave that preceded it has so far failed on standing grounds. Cases like Lewandowski v. Johnson & Johnson and Navarro v. Wells Fargo were dismissed because courts found it too speculative to connect excessive plan spending to a concrete personal injury for individual employees.
With voluntary supplemental insurance, the causal chain is shorter: the broker’s commission is embedded in the premium, the employee pays the premium directly through payroll deduction, and the injury arrives with each paycheck. That theory has not yet been tested at trial, but it addresses the most consistent legal obstacle the earlier wave hit.
The instrument plaintiffs are using to build these cases is publicly available. Broker commissions embedded in voluntary benefits are becoming a litigation target. Plaintiffs’ attorneys are using Form 5500 Schedule A data to compare employer compensation arrangements across the market, turning a routine annual disclosure into a benchmarking instrument.
Every employer that files voluntary benefits on Form 5500 as an ERISA plan is effectively publishing its commission structure for plaintiffs’ attorneys to benchmark against competitors. The Macy’s complaint uses this approach directly, comparing commissions paid to the same Aon entity at Target for the same products through the same carrier, where the filing alleges Target’s Form 5500 Schedule A reported approximately $214 in total commissions in 2019, versus 50.8% of premiums at Macy’s in the same year.
Munson did not arrive in isolation. The litigation wave began in December 2025 with four simultaneous class actions naming United Airlines, LabCorp, Universal Services of America (Allied Universal), and Community Health Systems alongside their brokers, Mercer, WTW, Gallagher, and Lockton, for alleged ERISA breaches tied to voluntary benefits commissions. USI Insurance faced a separate suit in September 2026 alleging it ran its own employees’ voluntary benefits plan while collecting the commissions those same product selections generated.
The common thread across every complaint is the same underlying question the PBM cases asked: did the employer investigate the compensation structure, evaluate alternatives, and monitor performance? Engaging an established broker does not replace that obligation when the employer is acting as an ERISA plan fiduciary. The 2026 Phia Group Broker Survey Results & Analysis, which surveyed 124 benefits brokers and advisors, found only 12% said they were very confident their clients had adequate fiduciary processes in place for voluntary benefits.
Many employers have assumed voluntary benefits fall outside ERISA because employees pay the full premium and participation is optional. That assumption depends on meeting all conditions of the Department of Labor’s safe harbor under 29 C.F.R. § 2510.3-1(j): no employer contributions, completely voluntary participation, no employer endorsement, and an employer role limited to payroll deduction. All four conditions must be satisfied.
When an employer selects the broker, chooses the carriers, integrates coverage into branded enrollment materials, and files the benefits on Form 5500 as part of an ERISA plan, it likely forfeits the safe harbor. Filing on Form 5500 is particularly consequential. Several of the original December 2025 complaints noted that the employer-defendants had already conceded ERISA coverage through their own annual filings. The practical implication for any broker or advisor who placed voluntary lines on behalf of an employer client is that a plan filing confirming ERISA status removes the primary defense.
The legal outcome of Munson is uncertain. Standing remains a live issue, and the courts have not yet ruled on the merits of any of these voluntary benefits cases. But the litigation pattern suggests the plaintiffs’ bar views commission percentages on Form 5500 as a durable source of cases, and that the instrument for finding the next defendant is already public.
