Employee Benefits Broker

An employee benefits broker is a licensed insurance professional who helps employers, typically small to mid-size, navigate and select health and welfare benefit plans. Historically compensated through carrier commission, brokers occupy one of the highest-leverage gatekeeper positions in the employer healthcare market.

That commission structure creates an inherent tension: when a broker is paid a percentage of premium, their income rises as the employer's costs rise. Section 202 of the CAA (2021) addresses this directly. It amended ERISA §408(b)(2)(B) to require brokers expecting $1,000 or more in compensation to disclose it in writing before an arrangement is entered into or renewed, in effect since December 27, 2021.

Commission structures vary meaningfully by group size: small fully-insured groups typically carry a 4–7% commission, mid-size groups 3–5%, large groups 2–4%, and level-funded arrangements 3–6%, with self-funded administration billed as $8–25 PEPM or 2–4% of expected claims. Roughly 72% of brokers serving mid-size employers still operate on commission, per NABIP's 2025 Broker Survey.

This is exactly the pressure that has made "CAA-defensible ROI" the standard a broker's recommendation gets measured against. With compensation now disclosed, a broker recommending the OnMed CareStation^® needs more than a disclosed commission to stand behind the recommendation—they need utilization data and reporting that shows the recommendation actually held up.