In its most simple form, the role of a benefits broker is to help individuals, especially employers, navigate the murky waters of health plan purchasing.

Some brokers have been able to steer clients toward calmer waters where year-over-year spending has decreased or stayed stagnant, but others have unfortunately sailed them right into the eye of the storm, where premiums increase anywhere from 5 percent to 20 percent per year with no additional perks.

In the latter scenario, this isn't necessarily the brokers' intention. Carriers' fully-insured health plans have, over the years, become very much cut and dried, copy-paste variations of one another, almost all of them with ever-increasing price tags. As a result, brokers have had a difficult time identifying and presenting both old and new clients with creative, competitive plans. And as one plan often isn't all that different from another, it's been more tempting for them to keep employers on existing plans than to have them implement a new one.

Keeping employers on existing plans is only made more tempting by the fact that many carriers offer brokers enticing incentives — think financial bonuses, payouts, and even vacations — for doing so, as ProPublica exposed earlier this year. However, this perverse chain of events could soon come to an end.

Earlier this summer, Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray shared details of a bipartisan plan, the Lower Health Care Costs Act, they hope will lower prices, eliminate the surprise medical bills that outlets like Kaiser Health News and Vox have recently investigated and, most importantly, demand that brokers be more transparent about the commissions they receive.

This push for greater transparency not only jeopardizes the income of the brokers who have succumbed to the carriers' calls, it also increases their legal vulnerability. Should Alexander and Murray's bill pass, brokers could be held legally accountable for not executing on their fiduciary duty and working in their clients' best interests: selecting low-cost health plans that connect beneficiaries with providers who have high-quality health outcomes. This is much like the retirement benefits portion of the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that protects individuals in most private industry, voluntarily established pension and health plans by setting minimum standards.

Instead of shying away from change and crossing their fingers that this legislation won't pass, wise benefits brokers will choose to be proactive rather than reactive. They will disclose their commission to their clients (following in the footsteps of some who've done it for years), then take a closer look at the health plans they've pushed them toward by questioning providers' and insurers' negotiated costs for certain services, paying particular attention to providers' track records of positive patient outcomes, and giving clients insight into this information.

In the long run, adopting transparent practices now will pay off. Employers are growing tired of hearing every year that they have to pay more money for the same low-quality care covered by their current health plan. And by that same token, their employees are tired of seeing more company money flow into a subpar health plan instead of pad their pockets via higher pay. That said, the benefits advisors who address these grievances well will undoubtedly be the most sought after in their field.

It's exciting to see these issues gain national attention and catch the eye of legislators all across the country, and while this bill has the potential to bring us closer to the transparency we need, we must remember that it's just a start. Debating proposals takes time, and precious time is something people simply don't have given that we've already wasted more than 20 years funding a miserable status quo instead of increasing working- and middle-class wages. Solutions are out there, and now is the time for benefits brokers to act. The water is safe to jump into.

Dave Chase is co-founder of Health Rosetta, which aims to accelerate the adoption of simple, practical, non-partisan fixes to our health care system. He is also the author of “The CEO's Guide to Restoring the American Dream.” (Health Rosetta Media, September 2017).

Instant Insights /

Legislation renews emphasis on brokers' duty, presents opportunity for change

More From HR Executive

Related Stories

Recommended For You