The “Safe Harbor” Trap: Why Voluntary Benefits are the New Fiduciary Frontier

For years, the employee benefits industry has operated under a comfortable, yet misguided assumption: if the employees pay 100% of the premium for a benefit, the employer is off the hook financially.

To most employers and benefits consultants, these are called “voluntary benefits”—accident, critical illness, cancer, hospital indemnity insurance, additional life insurance, and the like. They were treated as a “safe harbor,” a low-risk way to round out a benefits package without the heavy lifting of ERISA fiduciary oversight.

But as we’ve seen in the opening months of 2026, that safe harbor may no longer be safe.

A wave of recent litigation—targeting big name employers like United Airlines and Labcorp, along with major brokerage firms—has fundamentally changed the rules of the game. The core allegation? That employers and brokers breached their fiduciary duties by allowing employees to pay “excessive premiums” and “hidden commissions” to brokers.

At HealthJoy, we’ve spent over a decade building the HealthJoy Benefits Operating System (OS) we have today—designed to bring light to these exact types of shadows. Here is our perspective on why this litigation is a wake-up call the employee benefits industry desperately needs.

The End of “Set It and Forget It” Benefit Programs

The lawsuits that surfaced in December 2025 focus on a technical but critical point: Endorsement. Plaintiff attorneys argued that if you put your company logo on a voluntary benefit brochure, managed the enrollment, or even just filed a Form 5500, you have “endorsed” the plan. The moment you endorse it, you are an ERISA fiduciary. You can no longer claim you’re just a passive bystander to the premiums your employees pay.

Our Thoughts: This may bring some welcome relief for employees. For too long, “voluntary” has been synonymous with “unmonitored.” If an employer offers a benefit, they have a moral—and now legal—obligation to ensure it provides genuine value to the employees who invest in it out of their own pocket. You wouldn’t let a 401(k) provider charge 40% in hidden fees; why should a hospital indemnity or critical illness plan be any different?

Is Your “Safe Harbor” Leaking?

When it comes to “Safe Harbor” status, there are a few key red flags to watch out for:

• The “Broker-Carrier” Loop: Is your broker receiving “overrides” or “contingent commissions” from the voluntary carrier that aren’t disclosed in your Form 5500 schedules?
• The Logo Trap: Is your corporate branding all over the voluntary enrollment materials? If so, you may have just “endorsed” the plan in the eyes of the law.
• The Value Gap: When was the last time you ran a loss-ratio report on your critical illness plan? If your employees are paying $1M in premiums and only getting $200k in claims paid out, you may be sitting on a fiduciary time bomb.

The “Hidden Math” of Commissions

One of the most jarring revelations in these recent suits is the scale of “revenue sharing” and broker commissions—sometimes baked into premiums at rates that would be unthinkable in other financial sectors.

When a broker steers an employer toward a specific carrier because of a back-end commission rather than the employee’s best interest, there’s a fracture in the system if the broker isn’t transparent. This lack of transparency doesn’t just hurt the employee’s paycheck; it creates a looming legal liability for the employer.

How a Benefits OS Becomes Your Fiduciary Shield

This is just one of the many reasons we built the HealthJoy Benefits OS. We didn’t just want to create a “prettier” or more convenient way to look at benefits; we wanted to create a connected system that ensures both transparency and value.

In the context of this new litigation, a Benefits OS serves three critical roles:

• Centralized Oversight: You cannot manage what you cannot see. By centralizing all benefits—including the voluntary and employee-sponsored ones—into a single OS, employers and brokers gain a “command center” view. This allows consultants and HR leaders to audit utilization and track costs in great detail, and ensure that the disparate point solutions you’ve invested in are actually performing.
• A “Prudent Process” for Navigation: Fiduciary duty is about the process, not just the outcome. When HealthJoy guides an employee to a high-value care option or alerts them to a lower-cost prescription, we’re documenting a “prudent process” of member advocacy. We’re not just showing a list; we’re navigating them toward real value.
• Data-Driven Transparency: A Benefit OS thrives on data integration. By dissecting and understanding plan designs and real-time eligibility, we help remove the walls that carriers and brokerages have traditionally hidden behind. When you have access to the data, you have the power to benchmark premiums and create leverage for fair pricing.

The Path Forward: Accountability as a Strategy

The “frontier” of ERISA litigation has moved from 401(k) fees to healthcare administration, and now to voluntary benefits. We don’t believe this trend is not going away anytime soon.

My advice to fellow CEOs and HR leaders is simple: Embrace the accountability. Don’t wait for a demand letter to review your voluntary programs. Now is the time to audit your “Safe Harbor” status, demand total fee disclosure from your brokers, and move your benefits off of static PDFs and into a dynamic operating system, like the HealthJoy Benefit OS.

At HealthJoy, we believe that transparency isn’t just a legal requirement—it’s the foundation of a better employee healthcare experience. The era of “set it and forget it” benefits and “hands-off” employers is over. The era of the informed, accountable and tech-enabled fiduciary has arrived.

Please ensure any decisions made are with your compliance and legal counsel; HealthJoy does not provide compliance or legal advice and there are no plan or benefit recommendations in this article for a client or broker.