When you’re told your claims are high, are you getting the complete picture?
Most of the time, no.
When you look at a carrier’s claim report, it’s their data. Any major carrier presents claims through their lens because those numbers justify their pricing. Remove the barriers and subjective markup, and the story often looks different.
Understanding Compensation Structures
The advice employers receive is often influenced by how advisors are compensated. When evaluating recommendations for carriers or programs, it’s worth understanding whether the guidance aligns with your interests.
Industry compensation structures
- Commission-based models
Traditional broker compensation is tied to premium amounts. When premiums increase 20-30%, so does their compensation, even though the service level remains the same. - Pharmacy program arrangements
Some advisors receive transaction-based fees, earning compensation each time a prescription is filled. For larger groups, this can amount to significant annual payments. - Carrier volume agreements
Firms that direct substantial business to specific carriers may receive additional compensation through bonus structures.
These arrangements exist throughout the industry and affect how recommendations are made.
The Middleman Problem
Pharmacy is where this gets wild. When you use your insurance card to fill a prescription, how many hands touch that transaction? Sometimes dozens. Each one applies their markup.
The manufacturer produces a drug. It goes through PBMs, wholesalers, and retail pharmacies, each adding their cut. By the time you’re paying a $20 copay for a generic that costs $2-3 to produce, someone’s making money. And it’s not you.
A medication that costs $1,800-2,500 through your insurance can be sourced for $15 through patient assistance programs. We’ve seen million-dollar specialty drugs sourced internationally for a quarter million. Same drug, same quality standards, 75% cost reduction.
The PBMs that used to be owned by insurance carriers? Now they own the carriers. Think about that shift in power. They’re buying urgent care centers and minute clinics, building entire ecosystems designed to keep you locked in and maximize their revenue.
A Different Compensation Model
Employers have the right to understand how their advisor is compensated. Advisors are required to disclose compensation details, including any amounts beyond standard commissions.
If compensation details aren’t being shared proactively, employers should ask. Understanding these arrangements helps ensure fiduciary responsibility for your benefits program.
At DSG, we’re a full disclosure firm. We base our compensation on services delivered, not on carrier relationships or undisclosed deals. We’re willing to put our fees at risk because we’re confident we can deliver results.
Questions You Should Be Asking
When your broker tells you claims are high, dig deeper.
- Why are my claims high? Get objective data, not carrier spin.
- What undisclosed incentives exist in my current setup?
- How much is my advisor earning beyond standard commission?
- Am I being steered toward solutions that benefit my advisor more than my company?
Healthcare benefits are typically your second or third largest business expenditure. You should be asking questions and demanding transparency.
Employers who work with us recognize there have to be better options than traditional plans. They want something different. They want honesty, transparency, and sustainable solutions.
Once employers know what they didn’t know, their reaction is eye-opening.
Are you ready to see what you’ve been missing?
DM me for more information