Jump to content

Voluntary Benefits - return of broker commissions to employer

Recommended Posts

Hi. We offer certain voluntary benefits to employees (whole life, critical illness, etc.). We have been told by the broker that the insurer has extra funds in the premiums (commissions) that will go to the broker. The broker is telling us that it plans to send these commissions to us (the employer); and that the employer can use these funds. This concerns me. Can anyone point me in the direction of a statute on this? I want to be sure that the employer can receive these funds. And if so, what are the permissible uses for these funds?


Link to comment
Share on other sites

Among other concerns under Federal and State laws (including laws regulating the business of insurance), a nongovernmental and nonchurch employer might want its lawyer's advice about whether receiving compensation of the kind the originating post describes might or might not result in the employer receiving "consideration" (described in 29 C.F.R. 2510.3-1(j)(4)) such that an arrangement the employer intended as not a plan governed by ERISA might be a plan governed by ERISA.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania



Link to comment
Share on other sites

The broker is stating that the commissions (which they are calling give-backs) can be used for the three things listed below. Any thoughts on where this list comes from? Or what legal guidance allows this? I have asked the broker but haven't been able to get an answer that gives me much comfort.

Regarding voluntary benefits, the main give-backs include:

1. Online enrollment platform to overlay the HR software engine

2. Credit toward full benefits administration platform (which is unnecessary with the HR software engine)

3. On-site or telephonic HR/enrollment support.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...