A benefits broker explains why companies get steered toward expensive fully insured plans. Carriers hide cost increases behind renewal percentages and pocket backend bonuses from pharmacies and enrollment, while brokers rarely push back. He quit the job over the misaligned incentives.
Quite frankly, when I made that move to corporate employee benefits, I found that there was very little true education about the options that are available to the employer as opposed to the steering to a particular plan, again, because of backend bonuses, pharmacy bonuses, collective body bonuses, meaning the more bodies on the plan, the better your bonus is. Not what's best for the company, not what's best for the employer— excuse me, employee. But what's best for the broker and the carrier behind them. And once I saw that, I realized that I don't do business that way. So again, my tenure there was very short-lived, which again, check me out on LinkedIn. But it was for those exact reasons when I sat in the back room and I realized that a specific carrier whom shall remain nameless for now was brought in their entire book of business that this large company I worked with had with them. And when they went down the list, okay, this company has this percent renewal. We all know what renewals are, right? The price goes up every year basically is what that means. This company has this percent, this percent, this percent, this percent. And they said, well, they did really well financially.
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