Seven employees say USI Insurance ran their benefits plan and brokered it too, collecting millions in commissions their premiums paid for.
The claim sits at the heart of a proposed class action filed on September 8, 2026 in the US District Court for the Southern District of New York. Seven participants in the USI Insurance Services Employee Benefit Plan brought it under ERISA, the federal law that governs workplace benefits, on behalf of fellow plan members.
The setup the complaint describes is simple. USI ran the plan and also acted as the broker choosing its voluntary benefits - the extras employees buy for themselves through payroll, like vision, life, disability, accident, critical illness and telehealth. As the broker, the filing says, USI set its own commission and the administration fee. The insurer then folded that pay into the premium employees paid. As the complaint puts it: “When USI Insurance demands more, the carrier charges more, and participants pay more.”
That, the plaintiffs say, is the conflict. As the plan’s fiduciary - the party legally bound to put participants first - USI picked the carriers and products. As the broker, it collected the commissions those same picks generated. The complaint says USI “occupied both sides of the voluntary benefits transactions,” and calls the arrangement “self-dealing” and a set of “prohibited transactions” barred by ERISA.
The figures come from the plan’s own yearly reports to the government, known as Form 5500s, which the complaint cites throughout. It says USI and its affiliates received $3,457,904 in commissions and administration fees tied to participant premiums between 2020 and 2024.
The filing singles out particular policies. It says USI collected a flat $200,000 commission every year from 2020 through 2024 on the Prudential life, long-term disability and accidental death policy - with no changes to that policy since 2016, the complaint says, beyond more people signing up. On the accident plan, it says USI’s cut of premiums ran at 14.70% and then 11.07%, before jumping to 33.72% - a pattern the complaint calls a “heaped commission” - and later easing to 17.09%. The filing puts the business travel accident commission at exactly 25% of premiums and critical illness at exactly 10%. Telehealth commissions, it says, climbed from just over $9,000 in 2022 to well over $100,000 in each of the next two years.
One thread runs through the case that brokers will recognize. Voluntary benefits can sit outside ERISA entirely under a US Department of Labor “safe harbor” - but only if the employer keeps its hands off, doesn’t endorse the program and takes no profit beyond reasonable administrative costs. The complaint alleges USI’s control over the program, and its endorsement of it, pulled the benefits under ERISA’s fiduciary rules in the first place.
USI, based in Valhalla, New York, is one of the largest insurance brokerages in the US. The plan it sponsors grew from 8,177 participants in 2020 to 10,500 in 2024.
The suit brings two counts under ERISA: prohibited transactions and self-dealing (section 406(b)), and breach of the duty of loyalty (section 404(a)). It describes USI’s conduct as “knowing, willful, or at least reckless.” The plaintiffs want the commissions and fees paid back, USI removed as the plan’s fiduciary, an independent fiduciary appointed to run it, and interest, costs and legal fees on top.
None of the allegations have been tested, and no court has ruled on the claims.
