Section 202 of the CAA (amending ERISA §408(b)(2)) requires any broker, consultant, or service provider to a group health plan to proactively disclose all direct and indirect compensation they receive in connection with your plan — before the contract begins and annually thereafter.
This applies to all ERISA-covered group health plans (virtually every private employer plan), regardless of size. The disclosure must be made to the plan fiduciary — typically the employer or HR leadership.
Must Be Disclosed
- Broker commissions (flat fee & PEPM/PMPM)
- Consulting and advisory fees
- Bonuses, incentives, and overrides from carriers
- Revenue sharing, referral fees, or finder's fees
- Indirect compensation from any third party (PBMs, TPAs, stop-loss carriers, wellness vendors, etc.)
- Compensation paid to subcontractors related to your plan
How It Must Be Disclosed
- In writing — verbal disclosure is not sufficient
- Before the contract is entered or renewed
- Reasonable in advance so fiduciary can evaluate
- Must describe services provided for each compensation stream
- Must identify the payer of each compensation
- Updated if compensation materially changes
Many brokers earn significantly more from carrier commissions, bonuses, and downstream vendor kickbacks than from the fees they quote you directly. Without disclosure, you can't evaluate whether your broker's recommendations serve your plan's interests or their own. A broker recommending a specific carrier, PBM, or TPA may be financially incentivized by that vendor — and you have a legal right to know.