Broker and agent pay for group health is usually carrier-paid commission built into the premium, sometimes a flat per-member amount or a negotiated service fee. Federal transparency rules now require brokers to disclose their compensation to plan sponsors.
A Broker of Record (BOR) letter is a signed document naming the broker authorized to service your insurance with a carrier. It moves servicing and commissions to the new broker without changing your plan, carrier, premium, or benefits.
Health insurance brokers are usually paid by the insurance carrier through a commission built into the premium, so in the small-group market the employer typically pays the same premium whether or not a broker is involved. Brokers earn an initial commission when coverage is placed plus ongoing renewal commissions.
Under the Consolidated Appropriations Act, 2021, brokers and consultants must disclose in writing, before the employer signs the contract, all direct and indirect compensation they expect to receive in connection with a group health plan. It’s designed to surface conflicts of interest and help employers judge the value they’re getting.