How To Find Out How Much Your Broker Is Getting Paid
Under new federal transparency laws health insurance brokers must disclose commissions /compensation to clients and prospects. Most have chosen to ignore the law and continue to do business as usual. Jeffrey Hogan offers tips for employers who are curious how much they are paying their broker but don’t know how to ask.
By Jeffrey Hogan
Ask them. Today, I’m going to pose some of the very specific questions you should ask for, in writing. You should expect answers, in writing. Hope this helps.
- What is the total compensation that you are receiving from all sources and vendors on our group plan?
- Do you receive contingency compensation and bonuses from our health plan based on the aggregated placement of groups across your brokerage with our carrier?
- What is the prorata value of that contingency compensation allocated to our group plan?
- Do you receive bonus for retention?
- What is the exact prorata value relative to our plan?
- What is the exact commission you receive for stop loss?
- What have you built into fixed admin and other fixed fees for your compensation?
- Do you receive compensation for point solutions? Furnish us with disclosure on the payment mechanism and aggregate value of that compensation.
- Do you receive compensation on PBM ?
- Have you included any per claim comp and do you receive commission or additional comp for the PBM?
- Do you receive % of savings revenue on any vendors or features in our plan?
- What is the dollar amount of compensation you receive for non-medical benefits in our plan? Voluntary benefits?
- Do you have any conflicts as our agent which would cause you to not act or advise in the best interests of our plan beneficiaries ?
- Explain your diligence for calculating and updating your recommendations for stop loss pooling points that are optimal for the plan?
FROM AN ACTUARY:
Ladies of the night wish they could be that creative about their compensation opportunities. It’s a great list because there’s no way most employers would otherwise think of many of the questions on Hogan’s list . . . he should look for a way to market it.
