The days on “Don’t Ask, Don’t Tell” is coming to an end 59 days from now…….
How much are you paying your broker? Is your consultant earning fees from vendors they recommend?
It’s easy enough to find out. Just ask.
That’s what we did on behalf of a Texas school district several years ago. The district thought their health insurance broker was making $127,000 and asked us if that was a market norm.
So we asked (and did a little sleuthing).
Low and behold! The district was paying TWO BROKERS who were sharing $614,000.
This is more common than you think. It’s easy money. Making +$100,000 in undisclosed compensation on a 300 life group is not that hard to do. (Hint: Hide compensation on the claim side of the ledger.)
The days on “Don’t Ask, Don’t Tell” is coming to an end 59 days from now.
Views What brokers should expect when it comes to compensation disclosure
By Nelson Griswold / ebn / / Read Article
The new Consolidated Appropriations Act (CAA) of 2021 requires brokers, advisers and consultants to disclose to their employer clients all the compensation they expect to receive and detail the services they will provide. The goal is complete compensation transparency that allows employers to better understand broker incentives and gauge conflicts of interest.
A broker’s compensation disclosure form, done properly, will reveal what a company is paying and, more important, receiving for the money being paid. Because most brokers’ primary compensation is commission paid by the insurance company, employers largely have ignored how much their broker is paid.
When brokers disclose who pays them, how they get paid and how much they get paid, employers will have some pointed questions for them.
There are two questions that brokers should expect HR to ask after seeing the disclosure form. First: Are you providing full compensation transparency?
The second question to anticipate is: What are you going to deliver for the money.
RiskManagers.us is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods.
