With the adoption of the Consolidated Appropriations Act, 2021 (CAA), Congress has mandated that agent, broker and consultant compensation on all group health plans and individual health insurance policies be disclosed effective for arrangements entered into, renewed on extended on or after December 27, 2021. While many of us are generally opposed to mandates, this is the kind of positive action that strengthens the role of benefit specialists and empowers us to demand the same level of transparency of providers and carriers/networks for our clients.
How will this work?
This law requires agents, brokers and/or consultants (and their subcontractors) to disclose their compensation to plan fiduciaries. Specifically, any covered service provider that receives compensation in excess of $1,000 annually must provide this disclosure. The disclosure must include amounts paid directly and those received indirectly related to group health plans. This requirement applies to both fully insured and self-funded, which includes level-funded plans. The law requires notification prior to the beginning of a plan year and creates an obligation to update the group about changes in that compensation that occur during the year.
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