By Dave Chase
United Airlines employees paid their broker 64 cents per premium dollar in year one. 64% went to Mercer as commission. Not to medical care. Not to claims. To the broker. Then it “improved” to 27% by 2023. Mysteriously dropped to 2% in 2024 when lawsuits started flying.
That’s not market pricing. That’s exploitation of weak oversight.
Yesterday, I analyzed the CHS/Community Health Systems case. Believe it or not, this one is worse.
United Airlines employees paid their broker 64% of premiums in year one.
Let that sink in. For every dollar United employees spent on voluntary benefits insurance in 2020, 64 cents went straight to Mercer as commission.
Not to medical care. Not to claims. To the broker.
By 2023, it “improved” to 27%. Then mysteriously dropped to 2% in 2024, right before the lawsuits started flying.
Here’s the summary (read full complaint below):
The Numbers: From 2020-2024, Mercer collected $14 million in commissions from United employees at an average 36% rate. That’s 3.6x the industry standard of 10%.
But here’s where it gets wild. Mercer charged OTHER employers far less for identical services:
- Circle K employees: 6% commission
- PVH Corp employees: 2.1% commission
- Kohl’s employees: 10.1% average commission
- United Airlines employees: 36% average commission
Same broker. Same services. Different prices based solely on how closely the employer monitored their fiduciary duties.
This is only shocking if you haven’t seen how arbitrary prices and commissions are throughout the employer health benefits arena.
Full complaint below. Read on for more of the summary.
https://www.linkedin.com/embeds/publishingEmbed.html?articleId=9187840005206737606&li_theme=light
What United Employees Were Buying
Accident insurance. Critical illness coverage. Hospital indemnity policies.
These products pay cash directly to employees when they get hurt or hospitalized. They exist because United’s base health plan leaves employees exposed to catastrophic cost-sharing.
United is a Fortune 500 company with 107,000 employees and $57 billion in revenue. They have world-class negotiating power for everything from jet fuel to aircraft to landing slots.
But somehow they let their benefits broker charge flight attendants and ramp workers 36% commissions on insurance products designed to protect against bankruptcy from medical bills.
The Result:
With Mercer taking 36% and another vendor taking additional fees, the maximum possible loss ratio was around 60%. Even if the insurance carrier had zero costs.
Actual estimated loss ratio: under 50%.
United employees received less than 50 cents in benefits for every dollar they spent. On products they felt compelled to buy because their base health coverage was so cruddy it left them financially exposed.
The Pattern Mark Cuban Identified:
Cuban showed how PBM rebate schemes make the sickest patients subsidize the healthy through high cost-sharing while money flows to intermediaries.
This voluntary benefits model does the same thing. Lower-wage, higher-risk employees buy these policies because they face real medical bankruptcy exposure. They’re subsidizing the employer (who can offer cheaper base plans) and the broker (who extracts massive commissions).
Flight attendants. Customer service agents. Ramp workers. The people who keep United running paid 18x-30x more in broker commissions than employees at other companies using the same broker.
Why This Changes Everything:
Schlichter Bogard filed this case December 23, 2025. This is the firm that won three unanimous Supreme Court victories in ERISA cases and revolutionized 401(k) fee litigation. I’ve been unable to find any lawyer in U.S. history that is 3-0 at the Supreme Court — all with unanimous verdicts. Reading the complaint 👆 helps you understand why.
They’re now applying that same scrutiny to health benefits. And the United case shows even more egregious abuse than their Community Health Systems case filed the same day.
The sudden 92% commission drop from 2023 to 2024 suggests Mercer knew these rates were indefensible.
For Employers:
Your voluntary benefits arrangements likely violate your ERISA fiduciary duties. The lawyers are coming. But more importantly, your employees deserve better.
Health Rosetta, a Public Benefit Corporation Advisors can show you how to structure benefits that protect employees without requiring expensive insurance-on-insurance products. Get ahead of this. Find Health Rosetta Advisors in this directory or in a map view or DM me if you want a pointer to an advisor who is a fit.
For Brokers/Consultants:
Mercer charged United 36% and Circle K 6% for identical services. That’s not market pricing. That’s exploitation of weak oversight.
Health Rosetta certification trains brokers to deliver transformational value: 20-50% cost reductions while improving benefits. Get paid fairly for expertise, not commissions on overpriced products. Look at how the retirement advisors who leaned into the fiduciary role were the winners in the largest shift in that industry’s history — the same opportunity to do well by doing good exists.
This is meaningful work that changes lives. Worth 100x more than another carrier-paid incentive trip.
For Flight Attendants and Other United Employees:
If you bought voluntary benefits between 2019-2024, you may be part of this class action. The lawyers are fighting to recover your losses.
But the bigger fight is fixing the broken system that made you need insurance-on-insurance in the first place.
Next Steps:
We’re hosting a webinar on all four of the cases including CHS and United. Register here.
Nautilus Health Institute resources are becoming the new industry standard because they work. Scrutinize them. There are no more battle-tested procurement, contracting and data use resources available to employers and unions.
The Bottom Line:
When a Fortune 500 airline with elite negotiating power lets a broker charge employees 64% commissions, the system is broken. When the same broker charges other employers 2-6%, it proves United’s employees paid the price for fiduciary failure.
Schlichter Bogard just put every employer and broker on notice: voluntary benefits waste is now litigation territory. As bad as the abuses in voluntary benefits are, they are small potatoes compared to what is happening with medical and pharmacy claims.
If the CAA and the fiduciary path are new to your organization, it’s time for a second opinion. Fortunately, there are scores of aligned benefits advisors who have created thousands of successes in the Health Rosetta ecosystem. You can meet and see them at RosettaFest.
