Who Pays A Health Insurance Broker?

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   Christopher Lawrence

   Insurance Broker | Financial Consultant, Lawrence Insurance Consulting, Southern New Jersey

   The majority of the time Insurance Brokers receive their entire compensation from the health insurance company they place the plan with. The payment they receive is a commision payment based on a percentage of the total premium, and number of enrollees. The commission's do not effect the premiums, their clients receive the same premium rates as if they had enrolled without any professional assistance, the brokers commissions are generally payed out of insurance companies operating budget. I say that the "majority of the time" because there are certain benefit designs that can require a Broker to devote large amounts of time and resources to a account and will justify a pre-agreed fee structure. However, such situations are generally only a issue with large employers, especially those who have multi-state operations.

   Answered on November 28, 2013

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