Class Action Challenged Alleged Excess Broker Commissions
Business owners should review insurance carrier and broker agreements for hidden commission structures and ERISA compliance.
Updated on Oct. 5, 2026 in Healthcare
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A former employee filed a class action lawsuit against Macy's and Aon, alleging the companies collected $13.2 million in undisclosed commissions. The suit claims these fees, which were paid through employee premiums, violated federal ERISA fiduciary requirements.
Why it matters
The case highlights the operational risk of undisclosed broker compensation, as the lawsuit alleges the commission structure failed to meet the duty of care owed to employees under federal law. It emphasizes the need for transparency when selecting and compensating insurance intermediaries.
The lawsuit alleges Aon extracted $13.2 million in commissions between 2019 and 2024, with rates spiking to 62.8% after a 2022 carrier switch. The filing seeks to recover $9.6 million in alleged excess compensation paid by workers.
The players
Macy's
A national retail department store chain that operates as a large-scale employer and plan sponsor.
Aon
A global professional services firm that provides insurance brokerage and risk management consulting.
The details
The complaint alleges that Macy's and Aon frequently switched insurance carriers to trigger higher, fresh first-year commission payouts. It further claims that the broker bundled multiple contracts into a single agreement to obscure product-level fees from plan sponsors and employees. This practice allegedly resulted in commission rates that significantly exceeded market norms while remaining undisclosed to staff members enrolled in the plans.
Timeline
2019: Alleged initial commission rate of 50.8% at Macy's.
2021: Commission rate declined to 22.8%.
2022: Carrier switch led to a commission rate spike to 62.8%.
2019-2024: The period of alleged excessive commission extraction.
October 3, 2026: Class action lawsuit filed in the US District Court for the Southern District of New York.
Market Landscape
This litigation follows an established pattern of increased scrutiny regarding fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA). It challenges the common industry practice of bundling insurance contracts to simplify administration at the expense of fee transparency.
Business operators should audit their current insurance contracts to verify if commission disclosures are clearly itemized. Ensure that your benefits procurement process includes a review of how broker compensation is structured to avoid potential fiduciary liability.
The takeaway
Transparency in broker compensation is not just a best practice but a legal necessity under ERISA fiduciary standards. Review your current service agreements to ensure commission schedules are fully disclosed and aligned with market benchmarks.
Further reading
Learn more about the evolving regulatory environment in the Healthcare section.
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