PLANSPONSOR - August/September 2018 - 18

Upfront
Questions for Health Benefits Brokers
bonus, so the broker is not going to shop
around. Who pays you determines who
you work for. If a broker positions himself
as a buyer's agent but acts as a seller's
agent, this creates all kinds of problems. "
According to Chase, Health Rosetta
has found that up to 70% of revenue
received by benefits brokers is undisclosed-meaning
plan sponsors are
unaware of it.
Should a broker not answer this question,
it is a major red flag, he adds. " Why
would you work with someone who won't
disclose what they get paid? If they can't
fully disclose compensation, they are
likely getting paid too much. "
Second, by asking, " Is more than half
of your compensation coming from one
specific carrier? " an employer can learn
if the broker tends not to shop around for
the best deal. Chase says that, typically,
the way such a relationship works is that
a carrier can fire the broker with only 30
days' notice if he is not selling well for it,
which can incentivize his loyalty. Such a
relationship means the broker is failing to
act in the best interest of health benefits
sponsors.
Finally, Chase suggests employers
JUST like in the retirement plan market,
in the one supplying health benefits,
conflicts of interest can exist between
providers, which drives up employers'-
and employees'-costs and results in
decisions being made outside of participants'
best interests.
Dave Chase, co-founder of Health
Rosetta, which promotes reform for the
U.S. health care system, says there are
three key questions employers should ask
their health benefits brokers or advisers.
First, if employers ask, " What kind of
commissions and bonuses do you receive
from carriers, in total? " Chase says, they
will learn what type of incentives drive the
broker's or adviser's underlying decisions
or recommendations-how much influence
those provider relationships have.
" On the fully insured side, the more
clients a broker gets, the more it gets
paid, " he explains. " On the self-insured
side, brokers will often get a very substantial
bonus payment based on retention
of a book of employers with a particular
carrier. For example, if the broker retains
90% of the clients for a particular plan,
he or she can get [an approximately] 20%
18 PLANSPONSOR.com August-September 2018 Art by Sam D'Orazio
ask benefits brokers, " What is your
method to shop the market and find the
best offer available? " He says, rather than
just re-suggesting the plan the client used
last year, a good health benefits broker
typically starts from the ground up; it
determines the foundational components
of what the plan sponsor and its participants
need from a plan, then searches
based on that. Brokers should not say, " We
have this carrier that may be able to offer
the right plan for your employees. "
Employers should strive for a benefits
broker that is transparent about its
compensation and any conflicts of interest,
along with supplying a high performance
plan design and a good administrator of
benefits. -Rebecca Moore
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PLANSPONSOR - August/September 2018

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