HJLR May/Jun 2019

Healthcare Journal of LITTLE ROCK I  MAY / JUN 2019 21 employers. They present themwith benefits options, enroll them in plans and help them with claims and payment issues. Insurance industry payments to brokers are not illegal and have been accepted as a cost of doing business for generations. When brokers are paid directly by employers, the results can be mutually beneficial. In 2017, David Contorno, the broker for Palmer Johnson Power Systems, a heavy- equipment distribution company in Mad- ison, Wisconsin, saved the firm so much money while also improving coverage that Palmer Johnson took all 120 employees on an all-expenses paid trip to Vail, Colo- rado, where they rode four-wheelers and went whitewater rafting. In 2018, the com- pany savedmoney again and rewarded each employee with a health care “dividend” of about $700. Contorno is not being altruistic. He earned a flat fee, plus a bonus based on how much the plan saved, with the total equal to roughly what would have made otherwise. Craig Parsons, who owns Palmer John- son, said the new payment arrangement puts pressure on the broker to prevent over- spending. His previous broker, he said, didn’t have any real incentive to help him reduce costs. “We didn’t have an advocate,”he said. “We didn’t have someone truly watching out for our best interests.” (The former broker acknowledged there were some issues, but said it had provided a valuable service.) Working for Employers, Not Insurers Contorno is part of a group called the Health Rosetta, which certifies brokers who agree to follow certain best practices related to health benefits, including elimi- nating any hidden agreements that raise the cost of employee benefits. To be certified, brokers (who refer to themselves as “benefits advisers”) must disclose all their direct and indirect sources of income — bonuses, com- missions, consulting fees, for example — and who pays them to the employers they advise. Dave Chase, aWashington businessman, created Rosetta in 2016 after working with tech health startups and launching Micro- soft’s services to the health industry. He said he saw an opportunity to transform the health care industry by changing the way employers buy benefits. He said bro- kers have the most underestimated role in the health care system. “The good ones are worth their weight in gold,” Chase said. “But most of the benefit brokers are pitch- ing themselves as buyer’s agents, but they are paid like a seller’s agent.” There are only 110 Rosetta certified bro- kers in an industry of more than 100,000, although others who follow a similar phi- losophy consider themselves part of the movement. From the employer’s point of view, one big advantage of working with brokers like those certified by Rosetta, is transparency. Currently, there’s no industry standard for how brokers must disclose their pay- ments from insurance companies, somany employersmay have no idea howmuch bro- kers are making from their business, said Marcy Buckner, vice president of govern- ment affairs for the National Association of Health Underwriters, the trade group for health benefits brokers. And thus, she said, employers have no clear sense of the con- flicts of interest that may color their broker’s advice to them. Buckner’s group encourages brokers to bill employers for their commissions directly to eliminate any conflict of interest, but, she said, it’s challenging to shift the culture.