You know what every vendor in your building makes off you (refine a bit?). Your law firm’s rate. Your banker’s spread (does anyone ever know the bankers spread?). Your 401(k) advisor’s fee, because a law made them show you. There is one vendor whose pay you have probably never seen: your benefits broker and your insurance carrier (thoughts?)
That gap costs you at renewal, because part of the increase you are about to absorb may be their paycheck.
Here is the part that surprises owners. Broker pay often rides inside your premium and the plan’s vendor contracts. Base commission, of course, but also bonuses, overrides, an extra cut on your stop loss coverage, sometimes a per-fill fee on every prescription your people run through the plan. Some of it is disclosed. A lot of it is not. And the incentives do not always point at your lowest cost. Sometimes they point the other way.
You already know how this feels, because you fixed it everywhere else. You made your retirement advisor disclose in real numbers. Your benefits broker probably handed you a line that reads “we may earn other income that does not affect your cost.” That is not a disclosure. That is a shrug in legal font. And it is not even true, because that income can absolutely affect your cost.
The Consolidated Appropriations Act, a 2021 law, gives you the right to the real number. Your broker owes you a written accounting of what they get paid, from every source. Most owners have never asked. Most have never seen it.
Sit with what that means at renewal. The person advising you on a 15% increase might get paid more when your premium goes up. That is not a conspiracy. That is how a percentage commission works. And how is that working for you?
What to do this fall: ask for the disclosure in writing. Every dollar, every source. Not “roughly.” In writing. Then go read the contracts, the fully executed ones, and when you don’t have them (it happens more than you’d think), get them and read them. We built a set of AI prompts that walk you through exactly what to look for. Download The Benefits Contract Review Prompt Pack
I disclose my compensation and certify the document. Every client, every year. That is how we run. Not because I am a saint, but because you would demand it from anyone else touching this much of your money, and you should demand it here.
You hold every other vendor accountable. Renewal season is the moment to hold this one too.
Curious what your broker actually makes off your plan? Ask them, then let’s talk about the answer.
