How is my benefits advisor paid?

Do you know how your Employee Benefits advisor is paid? The Consolidated Appropriations Act (CAA) requires YOU to know!

This video will arm you with the questions you need to ask your advisor to ensure you are meeting your fiduciary duty.

Transcript

Employers. Do you know how your current benefits advisor is paid where your broker? The Consolidated Appropriations act now requires you to know this information and there's three types of compensation. I want to teach you about today. First is called base compensation. This typically comes in the form of a percent of Premium if you're fully insured. A flat fixed dollar amount every month or a per employee per month fee that fluctuates based on headcount. The second type is supplemental compensation also known as carrier overrides. This is in place with most major insurance carriers and what this compensation is is a bonus that a carrier pays a broker for all of the business. They either sell or retain with that given carrier typically in a calendar year. You've likely signed an agreement authorizing this type of compensation that is to be paid directly to a broker the third type of compensation is undisclosed compensation or indirect compensation. This is where a vendor or a carrier is paying a broker a fee where there is no underline agreement in place to actually pay that fee. So you likely do not know about this compensation and if you do you probably do not know. And so your action item is to just ask and make sure you ask them to disclose all of the forms of compensation that they're receiving from all carriers. And if you're not satisfied with the answer just keep digging.

About the Author

Mike Kroupa, Self-Funding Insurance Expert

I grew up in a house that was constantly under construction and the experience helped me uncover one of my passions, remodeling. After running a successful remodeling business with my brother during college, I decided I wanted to keep this as a hobby. Instead, I took my advisor’s recommendation and started down the actuarial path, which ultimately led me to insurance.

Since then, I have focused my career teaching employers how to better manage their health insurance plans. I found myself frustrated year after year of doing the same thing because it didn’t feel like I was making an impact. Healthcare costs were continuing to increase, and it felt like the only options employers were left with was increasing deductibles, increasing contributions, and switching carriers.

There was a turning point for me in 2020 as I found Health Rosetta, an ecosystem for scaling adoption of practical fixes to our health care system. As my clients started adopting these fixes, I found myself getting passionate about what I was doing for the first time. Then I realized my hobby of remodeling was driving the passion because I was remodeling health plans. Even better, I was having an impact because patients (employees, spouses and children) were getting the best care they ever have and saving a lot of money in the process.

Get in contact with Mike:

Phone: 630.738.1835 Email: mkroupa@gocgo.com LinkedIn: Mike Kroupa

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How is my benefits advisor paid?

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