Stacey Richter interviews self-insured space attorney Doug Aldeen about how broker/employee benefit consultant (EBC) compensation arrangements lead to legal trouble and excessive plan costs.

They discuss problems with overly complex or overpriced direct compensation, then cover three problematic payment-model categories: rent-seeking solution recommendations (e.g., reference-based pricing "cost of savings," balance-billing programs, and voluntary benefits with front-loaded commissions), undisclosed vendor payments to brokers/EBCs that bias recommendations, and arrangements exploiting gray areas or weak enforcement under the Consolidated Appropriations Act (CAA), including PBM per-script payments disguised as "discounts."

Examples include an "Ohio Potato" level-funded case where broker fees depleted claims funds and a balance-billing vendor paid $2.2M to address only $94K risk. Aldeen offers a six-step roadmap: ask "why" repeatedly, calculate ROI, assess downstream risk, simplify/demystify compensation, run independent RFPs, audit claims/documents (including stop-loss gaps), ensure contract outs, and "trust but verify," especially with entrenched public entities.

=== LINKS ===

🔗 Show Notes with all mentioned links:
https://cc-lnk.com/EP512

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00:00 Introduction to this episode.

00:59 A caveat for the record on this episode.

02:11 The first problematic payment model discussed in this week's episode.

03:27 The second problematic payment model discussed in this week's episode.

06:16 The conversation with Doug Aldeen.

06:27 Why is reviewing broker/EBC compensation so important?

08:05 The Ohio Potato Company anecdote.

10:28 The first way brokers/EBCs might get paid.

11:45 What "cost of savings" means.

12:31 EP457 with Cynthia Fisher.

14:07 A rent-seeking solution that requires a cost-benefit analysis.

19:16 Why the broker/EBC is sometimes in the dark about vendor kickbacks.

21:46 Where the CAA is unclear.

22:23 EP508 with Lee Lewis.

22:58 EP379 with AJ Loiacono.

24:04 Actionable advice for plan sponsors.

24:57 The second piece of actionable advice for plan sponsors.

25:22 The third piece of actionable advice for plan sponsors.

26:08 Demystifying the commission structure.

27:35 Using a broker RFP from an open source.

27:54 EP484 with Dave Chase.

28:31 Why you should be auditing data and claims.

29:29 EP478 (Part 1) and EP479 (Part 2) with Andreas Mang and Jon Camire.

31:29 The importance of having an "out."

33:11 Why the broker community may be at substantial risk.

35:30 EP419 with Andreas Mang.

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