By Josh Butler
Recently watched a City Council meeting from a city in the DFW metroplex. The presentation I watched was from a large brokerage firm who handles that City’s benefits. They were discussing the City’s annual renewal.
The consultant from the large firm had a slide and boasted of working with “hundreds” of political subdivisions around the state, including dozens and dozens of Cities.
Their presentation was fascinating…..boasting about their firm’s leadership sitting on “various advisory boards” for all the major carriers – BCBS, Aetna, Cigna, and UHC.
I started researching some of those cities represented by this large firm….and again, fascinating. Not a single one of the 27 cities I looked into used an independent TPA, and every one of them either uses BCBS, Aetna, Cigna, or UHC. Coincidence?
And only ONE City out of the 27 I looked into had a “carved out” PBM with an independent. 26 of the 27 were either with Optum, CVS Caremark, ESI, or Prime.
Fascinating….
I wonder what their carrier bonuses look like
“I didn’t see the presentation but come from BCBS, Humana and Aetna; I worked Product Management and Development for each. So, I know a little about the process. To give you some perspective, the carriers reward the brokers with bonuses equal to 1/12th to 1/10th of the premiums – basically a months worth of premium go to the brokers.” – Richard Stephenson
YOUR HOMEWORK READING ASSIGNMENT:
Undercover Work Exposes Bonus Arrangement For Insurance Consultants
