The Budget Line Nobody Made You Justify
You can account for every line in your budget. Payroll, rent, software, the office coffee. Each one breaks down to the dollar, because you made it.
Then there’s the benefits rate.
One number. No itemization. No accounting of what’s built into it, who gets paid out of it, or which plan designs never made it to your desk.
You would not approve a six-figure invoice from a contractor that just said “building.” You’d ask what’s in it. This is the same invoice. Somewhere along the way, you stopped asking.
Claim transparency before you sign, not after
Most employers go looking for answers after the renewal lands – once the increase already hit and the decision’s already made. That’s backward. The time to ask is before you sign, while you still have leverage.
And clarity is not a favor your broker grants you. It’s the baseline you’d demand from any other vendor in the building. (You’d be insulted if your accountant called his fees “proprietary.”)
So demand it. In writing. Before renewal:
✔️ Full fee and compensation disclosure – every dollar the broker and the carrier earn from your plan ✔️ What’s built into the rate – the actual line items inside that single number ✔️ Which plan designs weren’t presented, and why – the options that never reached you
And don’t stop at the disclosure statement. Pull the contracts.
I once read a disclosure that said the broker earned $30 PEPM (per employee per month) plus a bonus of $6 to $12. Reasonable enough, on paper. Then we pulled every contract. The bonus wasn’t $6 to $12. It was $20.
The disclosure wasn’t a lie. It just wasn’t the whole number. (That gap is exactly why you read the contracts and not the summary.)
If they shrug, caveat, or tell you “that’s just how it works,” you’ve still learned something. The shrug is the disclosure.
The part that outlasts the savings
Under ERISA, you are responsible for what you approve – and that includes what you were never shown. “I didn’t know” is not much of a defense when knowing was the job.
The opacity isn’t a bug in the model. The model runs on it.
So before the next renewal crosses your desk, send your broker those three questions in writing. If the answers don’t come back clean, that’s worth a conversation
Q: What should I ask my benefits broker before renewal? Three things, in writing: full fee and compensation disclosure, what’s actually built into the rate, and which plan designs weren’t presented and why.
Q: Why does the benefits rate come as one number? Because nobody made it break down. Every other vendor in your budget itemizes. This one got a pass it never earned.
Q: Under ERISA, am I responsible for fees I was never shown? As the responsible plan fiduciary, you have a duty to make sure your plan’s fees are reasonable. Since the end of 2021, brokers and consultants for group health plans have had to disclose their direct and indirect compensation to you in writing before you renew. A fee you were never shown may be a disclosure that never happened – and that’s your cue to ask for it.
