Four current and former employees at Phoenix-based Banner Health are suing the system, alleging the organization failed to oversee management and pricing of voluntary insurance benefits, according to court documents.
The lawsuit centers on Banner Health Master Health and Welfare Plan, which covered approximately 25,000 to 52,000 lives between 2020 and 2024. The plaintiffs allege Banner’s brokers collected more than $20 million in commissions over that period — averaging 38.6% of premiums — on accident, critical illness and hospital indemnity insurance policies while comparable plans typically pay brokers around 10%, according to court documents.
In addition to the health system, the lawsuit names Banner’s insurance broker, Lockton Companies; a benefits communication firm, BCInsourcing; and 20 unnamed individuals who were fiduciaries to the plans as co-defendants. The plaintiffs are seeking repayment of all losses to the plan, disgorgement of broker commissions and removal of the breaching fiduciaries.
Shelley Wilson, RN, director of staffing services, who joined Banner in 2015, and Margaret Haller, technical coordinator, who joined in 2021 are the current employees, according to the lawsuit filed May 4.
The other two plaintiffs are Melissa Cotton, who worked as a multi-modality technologist from 2021 to 2025 and was enrolled in critical illness insurance, and Michael Bedore, who joined in 2021 as an environmental services associate and was enrolled in accident, critical illness and hospital indemnity insurance. The lawsuit does not specify Mr. Bedore’s current employment status.
Banner, which employs more than 55,000 people and generates over $15 billion in annual revenue, told Becker’s it cannot provide comment on active litigation. Lockton Companies and BCInsourcing did not immediately respond to Becker’s requests for comment.
The Banner lawsuit is similar to one filed in April against Renton, Wash.-based Providence. Four former employees at Providence have accused the 51-hospital system of failing to monitor retirement plans that lost nearly $70 million over five years and underperformed for about a decade, according to court documents.
Becker’s will update this article if more information becomes available.
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