Group health clients, take note: Due to a new law, you should soon receive a notice regarding insurance agent commissions. As of January 1, 2022, Section 202 of the Consolidated Appropriations Act requires all insurance agents who market or sell employee benefit plans to notify clients of their commissions earned from monthly premiums. Similar to requirements of real estate agents, this commission will be expressed as a percentage of premiums paid. 

As you may know, businesses who wish to provide a group health benefits plan to their employees have two options: Work with an insurance broker, who helps match their needs to an appopriate health insurance policy, or contact insurance providers directly. With either option, plans are structured the same and premiums will be charged the same. The difference is that when an employer enrolls in a plan directly through the insurance provider, the provider retains the commission. When an agent makes the sale, he or she earns a commission that is set by the insurance company and approved by the Department of Insurance.

The bottom line is that employers do not pay more to enroll in a benefits plan through an insurance agent, but do have the right to know the commission amount anyway. The advantage, of course, is the availabity of an expert to help you understand your options, sort through different insurance plans, and choose one that best fits your (and your employees’) needs. The commission is expressed as a percentage of the monthly premiums you pay.

The required disclosure helps employers to understand the costs associated with their group benefits plan, and can help you make decisions regarding your choice of insurance providers. Watch your mail for this disclosure, and do contact us if you have further questions about anything regarding your group health plan.