One of our manufacturing clients told me how they picked their prior benefits broker.
They did not. They purchased the business about five years ago, and the broker came with the building. Nobody re-asked a single question in those five years.
Then he told me what the relationship looked like day to day. “We don’t really get a lot of discussion points throughout the year. It’s just this time of year, when it’s renewal time, that we crunch the numbers.” And the line that made me put the pen down: “You shouldn’t have to carbon copy the CEO to get an answer from your broker.”
The service you are paying for
Think about any other vendor this size. Your bank. Your CPA. Your biggest supplier. If the only way your office manager could get a callback was to copy you on the email, that vendor would be gone by spring.
With the benefits broker, that is the standard. One meeting a year. A renewal letter. Questions that sit for a week until someone with a title asks them. It should not be, and it should not be tolerated. He paid for that service either way. The bill never showed it, which brings up the second problem.
And you have never seen the invoice
You know your law firm’s rate, your CPA’s hourly, and your 401(k) advisor’s fee, because a law made them show you. Your benefits broker is the exception. Their pay rides inside your premium and the plan’s vendor contracts: base commission, bonuses, overrides, a cut on stop-loss, sometimes a per-fill fee on every prescription. Some of it is disclosed. A lot of it is not.
Nobody cares much about broker comp (they should). Everybody cares about calling a vendor and hearing nothing back. Those two things come from the same place: nobody ever set the terms. The Consolidated Appropriations Act, passed in 2021, lets you set at least one of them. Your broker owes you a written accounting of what they get paid, from every source, before you sign.
Before December 31
✔️ Count the emails this year where someone had to copy you to get a benefits answer. That number is your service review.
✔️ Send one email: “Please send the written compensation disclosure required under the Consolidated Appropriations Act, covering every source of compensation tied to our plan, plus the fully executed vendor contracts.”
✔️ Put both in a folder dated this year. What you get back, and how long it takes, tells you what you are paying for.
Our client never got that number from the prior broker. The first time anyone in the company saw one was the day we handed them ours.
How many times did you have to be copied this year to get an answer? Let’s talk.
