Posted: February 6, 2018

Health Insurance Broker Fees & Fee Disclosure for the Individual Market
By Senator Tim Neville & Representatives Tracy Kraft-Tharp & Lang Sias
The Colorado State Association of Health Underwriters (CSAHU) is Colorado’s largest professional association of brokers, agents and producers in the health care industry. Their members assist thousands of Colorado businesses and individuals each year in selecting and enrolling in a health plan that best meets their medical needs and their financial situation, as well as continuing to provide services to the consumer throughout the year. CSAHU advocates on behalf of its broker members and their clients.   
  • SB18-136 allows an insurance producer or broker to charge the client a fee if the producer or broker is not otherwise compensated by commission for the health benefit plan selected by the client.
  • The insurance producer or broker must disclose any insurer commission compensation related to the health benefit plan selected by the client. 
  • If the health benefit plan selected by the client does not include compensation from the insurer for the producer or broker, the producer or broker may charge a fee if the fee is properly disclosed to the consumer.
  • The insurance commissioner shall promulgate rules regarding the fee disclosure.
  • Insurance producers and brokers income is currently derived from commissions received from insurers. 
  • Insurers have been steadily reducing the commissions they pay to producers and brokers since 2014 and even eliminating commissions completely on some products or when certain minimum production requirements are not met.
  • Current law prohibits producers or brokers from charging a fee to consumers for their services.  Many clients may offer to pay their broker a fee when no commission is being paid by the insurer; however, under current state regulations, this is not permitted. 
Consumers in the individual market have options – producers or brokers, assisters, navigators, captive agents, and applying directly with the carrier. This bill would allow consumers to pay for the services of a producer or broker if they wish to use that option. 
Brokers provide valuable advice and services in the healthcare marketplace. Their knowledge of all carrier plans, available financial assistance, and a fiduciary duty to their client are all included in the broker experience and no where else.
Colorado State Association of Health Underwriters
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