HJLR May/Jun 2019

Health Insurance Hustle 22 MAY / JUN 2019 I  Healthcare Journal of LITTLE ROCK   Nevertheless, Buckner said she doesn’t think payments from insurers undermine the work done by brokers, who must act in their clients’ best interests or risk losing them. “They want to have these clients for a really long term,” Buckner said. Industrywide, transparency is not the standard. ProPublica sent a list of questions to 10 of the largest broker agencies, some worth $1 billion or more, including Marsh & McLennan, Aon and Willis Towers Wat- son, asking if they took bonuses and com- missions from insurance companies, and whether they disclosed them to their clients. Four firms declined to answer; the others never responded despite repeated requests. Insurers also don’t seem to have a prob- lemwith the payments. In 2017, Health Care Service Corporation, which oversees Blue Cross Blue Shield plans serving 15 million members in five states, disclosed in its cor- porate filings that it spent $816 million on broker bonuses and commissions, about 3 percent of its revenue that year. Acompany spokeswoman acknowledged in an email that employers are actually the ones who pay those fees; the money is just passed through the insurer. “We do not believe there is a conflict of interest,” she said. In one email to a broker reviewed by Pro- Publica, Blue Cross Blue Shield of North Carolina called the bonuses it offered — up to $110,000 for bringing in a group of more than 1,000 — the “cherry on top.”The com- pany told ProPublica that such bonuses are standard and that it always encourages brokers to “match their clients with the best product for them.” Cathryn Donaldson, spokeswoman for the trade group America’s Health Insur- ance Plans, said in an email that brokers are incentivized “above all else” to serve their clients. “Guiding employees to a plan that offers quality, affordable care will help establish their business and reputation in the industry,” she said. Some insurer’s pitches, however, clearly reward brokers’ devotion to them, not nec- essarily their clients. “To thank you for your loyalty to Humana, we want to extend our thanks with a bonus,” says one brochure pitched to brokers online. Horizon Blue Cross Blue Shield of New Jersey offered bro- kers a bonus as “a way to express our appre- ciation for your support.”Empire Blue Cross told brokers it would deliver new bonuses “for bringing in large group business ... and for keeping it with us.” Delta Dental of California’s pitches appears to go one step further, rewarding brokers as “keymembers of our Small Busi- ness Program team.” ProPublica reached out to all the insur- ers named in this story, and many didn’t respond. Cigna said in a statement that it offers affordable, high-quality benefit plans and doesn’t see a problem with providing incentives to brokers. Delta Dental empha- sized in an email it follows applicable laws and regulations. And Horizon Blue Cross said its gives employers the option of how to pay brokers and discloses all compensation. The effect of such financial incentives is troubling, saidMichaelThompson, president of the National Alliance of Healthcare Pur- chaser Coalitions, which represents groups of employers who provide benefits. He said brokers don’t typically undermine their cli- ents in a blatant way, but their own financial interests can create a “cozy relationship”that may make them wary of “stirring the pot.” Employers should know how their bro- kers are paid, but health care is complex, so they are often not even aware of what they should ask, Thompson said. Employers rely on brokers to be a “trusted adviser,” he added. “Sometimes that trust is warranted and sometimes it’s not.” Bad Faith Tactics Then officials in Morris County, New Jersey, sought a new broker to manage the county’s benefits, they specified that appli- cants could not take insurance company payouts related to their business. Instead, the county would pay the broker directly to ensure an unbiased search for the best benefits. The county hired Frenkel Benefits, a NewYork City broker, in February 2015. Now, the county is suing the firm in Superior Court of New Jersey, accusing it of double-dipping. In addition to the fees from the county, the broker is accused of collecting a $235,000 commission in 2016 from the insurance giant Cigna. The broker “In 2017, Health Care Service Corporation, which oversees Blue Cross Blue Shield plans serving 15 million members in five states, disclosed in its corporate filings that it spent $816 million on broker bonuses and commissions, about 3 percent of its revenue that year.” 15 M illion