Episode Details

I wanted to talk to a lawyer 'cause, yeah, lawyers are the ones that see stuff that falls the whole way down to the level of legal action. But I wanted to find out what are the main categories of things that wind up in legal land when it comes to broker or EBC (employee benefit consultant) payment agreements. Like, what are the top ways that compensation agreements go horribly awry?

For a full transcript of this episode, click here.

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Doug Aldeen, my guest today, rose to the challenge. And let me just state for the record that, while there are a whole lot of brokers and EBCs who would or do engage in some of these practices, there are also many who do not; and/or it might not be the broker/EBC themselves but the company that they work for who is up to some of the things that we're gonna be talking about in the episode today.

But I really, for sure, want to support the gang of honest actors, great fee-based, integrity-based brokers and EBCs; and I wanna support them all day long, many of whom listen to the show and are part of the Relentless Health Value Tribe.

But let's talk about how the rent-seeking ones roll so that you can spot them. See what they did there.

So, yeah … the first kind of ground zero that Doug and I talk about today is just up-front direct compensation agreements, which may be just ridiculously complicated and/or ridiculously expensive compared to what others are charging for a similar group. Where there's mystery, there is margin. That is so relevant in so many situations, and this is just another one of them.

So then, after that, Doug and I move on; and we get into three categories of stuff that sits in that undisclosed or maybe even disclosed zone, where just the whole model of payments is problematic on its face.

First up (and this is a biggie), brokers/EBCs recommending rent-seeking solutions to their clients. Like, a broker or EBC suggests a solution to their client where the solution itself makes money on a perverse incentive, and then the broker or EBC gets a piece of that action, which might be called shared savings. So, yeah … even if the dollars to the broker or EBC are disclosed, a naive plan administrator might not see that overcharge for what it really is—and Doug gives a bunch of examples in the show that follows.

Chris Deacon (post) and Justin Leader (post) also wrote posts about this. Donovan Pyle wrote a whole book about it.

Okay … the next big category of typical payment model methodologies that Doug Aldeen (again, a lawyer) has seen plans get themselves into trouble with their EBCs and brokers—the ones who are sharks, I mean, circling the plan like it's a gold mine—this big category is undisclosed payments from vendors who the plan doesn't realize have a business relationship with the EBC or broker.

This can also be a whole basket of solutions that the EBC/broker wants to install, which is basically thi