Health Insurance Broker Commission Overview
Health insurance broker compensation is often built into the premium you pay rather than billed separately. That makes it easy to overlook and difficult to know what your broker actually earns.
For fully insured group health plans, health insurance broker commission rates commonly range from about 3% to 7% of premium, with rates generally decreasing as groups get larger. On a $700,000 annual premium, that would be $21,000 to $49,000 in annual commission.
The calculator above estimates your broker's compensation based on your premium, enrollment, and commission structure.
How to use this broker commission calculator
Step 1 — Enter Your Annual Premium.
Enter the total annual premium for your group health plan, including both employer and employee contributions. You can find this on your carrier invoice or renewal summary.
Step 2 — Enter Your Enrolled Headcount.
Enter the number of employees enrolled in the plan, not your total headcount. PEPM compensation is based on enrolled employees.
Step 3 — Select the Commission Structure.
Choose percentage of premium or per-employee-per-month (PEPM). Percentage-based compensation is common for fully insured group plans, while PEPM arrangements may be used for larger or self-funded groups.
Step 4 — Add Overrides or Bonuses.
If you know of additional carrier-paid compensation, add it here. This can include bonuses, overrides, or other indirect compensation.
Step 5 — Review Your Estimate.
See your estimated annual broker compensation, broken down by component, so you know what to ask your broker to confirm.
How Health Insurance Broker Commissions Are Calculated
There are three ways money reaches your broker. Most employers know about the first one.
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What the CAA 2021 Requires Brokers to Disclose
The calculator gives you an estimate. For covered employer health plans, your broker is required to disclose specified direct and indirect compensation under the Consolidated Appropriations Act of 2021.
What Brokers Must Disclose
The law requires covered brokers and consultants to disclose specified compensation to a responsible plan fiduciary, and it applies where they reasonably expect $1,000 or more in direct or indirect compensation. The requirements apply to covered arrangements entered into, renewed, or extended on or after December 27, 2021.
What the Disclosure Includes
Base commission; per-employee fees; overrides and bonuses; other direct or indirect compensation.
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