No. When fee-based consulting firms get quotes from traditional Carriers, they instruct Carriers to remove commissions from the product. Instead of the 4%-6% commission paid by Carriers to brokers, fee-based firms often charge a flat fee that ranges from $25 - $60 per employee per month, depending on which services the firm includes in their service package.
While fee-based firms may generate slightly more or less revenue than traditional brokerage firms, it’s important to remember that the value created from getting objective investment advice far exceeds any slight compensation deviations between brokers and fee-based consultants.

• For example, if an employer with 100 employees spends $1 million yearly on their health plan, a broker would normally receive 5% ($50,000/year) in commission.
  Even if the fee-based firm charged the employer $75,000 ($25K more than the broker was getting in commissions), but their recommendations saved the employer $100,000 on their plan, the employer still netted $75,000 in savings for a product of equal or better value. 

Although a fee-based firm’s compensation may be higher or lower in certain circumstances, the critical thing to remember is that, unlike benefits brokers, fee-based firms are not penalized for giving employers their best advice on how the employer should invest healthcare dollars. 

Brokers and fee-based firms have access to the entire marketplace of insurance products. Unlike brokerage firms, fee-based firms are not financially penalized for maximizing the return on an employer’s benefits investment. They are laser-focused on helping their clients achieve their business objectives.

Broadly speaking, fee-based firms save employers money by 1) showing employers how to stop paying for healthcare employees never actually consume and 2) showing employers how to stop overpaying for the healthcare their employees do consume.

Absolutely not. Since some Carriers pay brokers more than others, it is challenging for brokers to give employers objective investment advice about which products to buy. Furthermore, employers who work with benefits professionals whose financial interests are misaligned with theirs are more likely to purchase products from vendors whose economic interests are also misaligned with theirs. Seeing how vital aligning financial interests is to maximize a company’s health investment, fee-based consultants are more likely to outperform a brokerage firm’s commissioned salespeople.

Understanding the intricacies of healthcare financing and procurement methods, healthcare supply chain management, and the ever-changing regulatory environment should not be left to brokers who merely possess an insurance license.

Verify that the specific broker or consultant you will be working with has the highest designations and certifications in the benefits industry, as this is akin to having a Ph.D. in other sectors.

They are as follows:

• Certified Health Value Professional (CHVP) - awarded by the Validation Institute.
• Registered Employee Benefits Professional (REBC) - awarded by the National Association of Benefits and Insurance Professionals.
• Certified Employee Benefits Specialist (CEBS) - awarded by the International Foundation of Employee Benefit Plans