Fee-Based Firms Appointed With All Traditional Carriers (Objectivity Rating = A)

Requirements:

• The Firm charges the employer a fee for providing consulting, procurement, and management services related to the employer’s health plan(s).
• The Firm does not accept commissions, bonuses, or overrides from vendors associated with the employer’s health plans.
• If the Carrier or vendor pays indirect compensation to the Firm, the Firm must credit 100% of that compensation back to the employer.
• Firms must use contracts with employers that comply with disclosure rule 408(b)(2)(B).
• Firms may accept commissions from Carriers for the sale of ancillary products. (The Credibility Guarantee does not apply to voluntary benefits.)

 

Fee-Based Firms That Are Not Appointed with Traditional Carriers (Objectivity Rating = B)

Requirements:

• The Firm charges the employer a fee for providing consulting, procurement, and management services related to the employer’s health plan(s).
• The Firm does not accept commissions, bonuses, or overrides from vendors associated with the employer’s health plans.
• Firms must use contracts with employers that comply with disclosure rule 408(b)(2)(B).
• Firms may accept commissions from Carriers for the sale of ancillary products.

Qualified Exceptions:

1. If the employer is a small group on a fully insured product, the fee or commission paid to the benefits firm is set by the Carrier and cannot be removed from premiums.
   1. If the benefits firm’s fee is higher than the Carrier’s fee, the benefits firm will credit the Carrier payment toward their total fee so long as it is permissible under State law.
   2. If the benefits firm’s fee is lower than the fee paid by the Carrier, the benefits firm must accept the Carrier’s payment in full. Under the rebating laws, they cannot credit this type of payment back to the employer.
2. If the employer’s contribution toward the health plan is near the ACA’s minimum requirements (i.e., 50% of the employee-only base plan), the benefits firm may accept the commission in lieu of fees so that the employer does not have to shoulder 100% of their firm’s fee. This must be disclosed.
3. Some large group plans like Multiple Employer Welfare Arrangements (MEWAs), and Association Health Plans (AHPs) do not allow commissions to be removed from products. In this scenario, the benefits firm may accept the commission in lieu of fees. If the firm’s fee is higher than the commissions embedded in the health plan, the firm may credit the commissions paid towards their fee, so long as State laws do not prohibit this. If they prohibit this, a disclosure will suffice.
4. Transition Period: when replacing an incumbent brokerage firm via the “Broker of Record” (BOR) process, Fee-Based Firms may accept compensation from the employer’s current vendors until the last day of its plan year. On the renewal date and henceforth, all the commissions shall be removed from health insurance products wherever possible (except when exceptions #1 – #3 are applicable).

Payment Terms:

• Total Investment: $2500 now via Stripe and $2500 upon approval
• $2,500 is due upon signing and $2,500 once the Fiduciary Validation is granted. If both CHVP and the Fiduciary Validation are purchased together, there is no additional fee upon granting.
• If the Fiduciary Validation is not grantable based on your contract language, you will not be charged the other $2,500
• Annual renewals are $1000 and require submission and review of updated templates or a statement that the Validation-compliant language in the template has remained unchanged

Submission Requirements:

To apply, please submit a signed contract that your firm uses with an existing client, along with proof of your current appointments with major carriers. If any appointments have been terminated by carriers, please include a letter explaining the reasons for termination. Please submit all documentation to bernie.weiss@validationinstitute.com

Congratulations to the Awardees of the Fiduciary Validation for Benefits Firms

Firm	Lead Individual(s)
*Alera Group	Brian Uhlig
E Powered Benefits	David Contorno / Emma Fox
Risk Strategies	David Smith
Health Compass Consulting	Donovan Pyle
Ethos Benefits	Donovan Ryckis / Chelsea Ryckis
BenefitsDNA	Justin Leader
The Volition Group	Matt Bittner
Prosperity Benefits	Niko Caparisos
Superior Insurance Advisors	Paul H. Flowers Jr.
Primum Risk Strategies	Terry Shook

*Greater Chicago Office