HJLR May/Jun 2019

got an additional $19,206 the next year, the lawsuit claims. To get the commission, one of the agency’s brokers allegedly certified, falsely, that the county would be told about the payment, the suit said.The county claims it was never notified and never approved the commission. The suit also alleges the broker “purpose- fully concealed” the costs of switching the county’s health coverage to Cigna, which included administrative fees of $800,000. In an interview, John Bowens, the county’s attorney, said the county had tried to guard against the broker being swayed by a large commission from an insurer. The brokers at Frenkel did not respond to requests for comment. The firmhas not filed a response to the claims in the lawsuit. Steven Weis- man, one of attorneys representing Frenkel, declined to comment. Sometimes employers don’t find out their broker didn’t get them the best deal until they switch to another broker. Josh Butler, a broker in Amarillo, Texas, who is also certified by Rosetta, recently took on a company of about 200 employees that had been signed up for a plan that had high out-of-pocket costs. The previous bro- ker had enrolled the company in a supple- mental plan that paid workers $1,000 if they were admitted to the hospital to help pay for uncovered costs. But Butler said the premi- ums for this coverage cost about $100,000 a year, and only nine employees had used it. That would make it much cheaper to pay for the benefit without insurance. Butler suspects the previous broker encouraged the hospital benefits because they came with a sizable commission. He sells the same type of policies for the same insurer, so he knows the plan came with a 40 percent commission in the first year.That means about $40,000 of the employer’s pre- mium went into the broker’s pocket. Butler and other brokers said the insur- ance companies offer huge commissions to promote lucrative supplemental plans like dental, vision and disability. The total com- missions on a supplemental cancer plan one insurer offeredcome to57 percent, Butler said. These massive year-one commissions lead some unscrupulous brokers to “churn” their supplemental benefits, Butler said, con- vincing employers to jump between insurers every year for the same type of benefits. The insurers don’t mind, Butler said, because the employers end up paying the tab. Brokers may also “product dump,”Butler said, which means pushing employers to sign employees up for multiple types of voluntary supple- mental coverage, which brings thema hefty commission on each product. Carl Schuessler, a broker in Atlanta who is certified by the Rosetta group, said he likes to help employers find out how much profit insurers are making on their premi- ums. Some states require insurers to pro- vide the information, so when he took over the account for The Gasparilla Inn, an island resort on the Gulf Coast of Florida, he obtained the report for the company’s recent three years of coverage with UnitedHealth- care. He learned that the insurer had only paid out in claims about 65 percent of what the Inn had paid in premiums. But in those same years the insurer had increased the Inn’s premiums, said Glenn Price, its chief financial officer. “It’s tough to swallow”increases to our premiumwhen the insurer is making healthy profits, Price said. UnitedHealthcare declined to comment. Schuessler, who is paid by the Inn, helped it transition to a self-funded plan, meaning the company bears the cost of the health care bills. Price said the Inn went from spending about $1 million a year to about $700,000, with lower costs and better ben- efits for employees, and no increases in three years. “In an interview, John Bowens, the county’s attorney, said the county had tried to guard against the broker being swayed by a large commission from an insurer.” “Sometimes employers don’t find out their broker didn’t get them the best deal until they switch to another broker.”