ICHRA administrators don’t need brokers but they pretend they do. They often play both sides, direct sales and broker introduced door opener sales.
In most instances ICHRA administrators become the Agent of Record receiving all the commissions while the introducing broker receives “Bird Dog” referral fees paid monthly from a portion of the administrator’s monthly admin fee. In addition these Bird Dog door openers may tack on per member fees on top of ICHRA fees in order to maintain a lifestyle of the rich and famous.
Once a sale is made the introducing broker becomes irrelevant. He becomes the Maytag repairman with nothing to do other than leave their jilted lover to chase Bird Dog fees by making more ICHRA introductions in the hopes of expanding his Jilted Lovers book of business.
Buying health insurance through an ICHRA is like buying something on Amazon. Go to a website, view the “inventory”, click on a button and you’re covered on a plan that best fits your needs. During the process an attractive, tattooless ,artificial intelligence humanoid walks you through your choices and answers your questions.
But unlike Amazon, under an ICHRA there is a usually a “cover charge” ranging as high as $20-$35 pepm for the privilege of using the administrator’s platform.
Meanwhile your Bird Dog broker is nowhere to be found. Your new broker, one you’ve never met nor ever will is on Tahiti enjoying umbrella drinks with his techies.
Not all ICHRA administrators will agree these facts are unfounded. They have a different view. They know brokerage is an effective distribution system that costs them nothing.
“If you’re a broker and have concerns about how the Individual Coverage Health Reimbursement Arrangement (ICHRA) is going to affect your role, I’m here to assure you: not only is there a significant place for you in the ICHRA landscape……. but your role is also fundamental and irreplaceable in our business operation……………we highly value and prioritize our partnerships with brokers. We understand that you’re instrumental in connecting us with opportunity, fostering client relationships, and guiding employers through the complexities of health coverage options.” – Take Command Health.
