A school district in deep South Texas was paying their benefits consultant an additional $614,000 per year but didn’t know it.
By Bill Rusteberg
We were retained by a South Texas school district several years ago to audit their self-funded health plan as the CFO wanted to “see where all the money was going.” So we did. And it didn’t take long.
We showed her where every penny went, including the $614,000 cookie jar she didn’t know she had.
The district thought they had only one broker, paying him $4 PEPM, about $115,000 per year. But they weren’t.
They were paying two brokers. Together they were earning $614,000 in addition to the $115,000 that was disclosed. How did they do that?
Hiding money on the claim side of the ledger is easy. It’s done all the time, everywhere.
I once asked a consultant I know well if his national firm was earning undisclosed compensation on a public school district they were providing fee-based consulting work for. The district was with a BUCA known to pay undisclosed backend bonus payments to brokers and consultants. Instead of saying “Are you crazy Bill, that would be unethical!” the answer was “I hope not.” He couldn’t have answered any other way and we both knew it.
Want to know how all this insider trading works? It’s easy. Ask your broker consultant. He knows.
