How health insurers steer employer benefit decisions with broker bonuses

While employers' human resource directors often chose health benefits for their employees with the help of an independent broker, the health insurance industry passes cash and gifts to brokers — who sway employers toward certain plans, according to a ProPublica and NPR investigation.

Four things to know:

1. Health insurers often pay brokers a commission for each employer they sign up for their health benefits, which is usually 3 to 6 percent of the total premium. For a company with 100 employees, that could be about $50,000 a year.

2. The commissions can be higher, and other cash and gift incentives may be offered. For example, Cigna offers top-selling brokers a five-day vacation to Bermuda. Health Net offers some of its brokers a bonus of up to $150,000 per employer group signed on. EmblemHealth in New York promises its best-performing brokers a chance to bat against retired New York Yankees pitcher Mariano Rivera, according to ProPublica and NPR.

3. In 2017, Health Care Service Corp., which manages Blue Cross Blue Shield in five states, recorded an $816 million expense for broker commissions and bonuses. Those fees are passed through the insurer to employers, a company spokesperson acknowledged to the publications, adding, "We do not believe there is a conflict of interest."

4. Ultimately, while the commissions come from insurers, the cost is built into employers' premiums and affects employees who pay for the health plan, according to the report. Eric Campbell, PhD, director of research at the University of Colorado Center for Bioethics and Humanities in Aurora, told ProPublica and NPR that the payments are "a classic conflict of interest."

For the full ProPublica/NPR report, click here.

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