Fees to Consulting Firm Placing Coverage for Employer

[Guest dywoody]

Is there any "guideline" per se regarding the fees that a consultant receives when placing welfare coverages with a TPA, stop loss carrier, etc.? My current employer - I wasn't employed when the contract was negotiated, is paying the consultant 15% of the stop loss - specific and aggregate premiums - as their "fee." Is there a norm and, if so, what it should be? I think $50,000 is a little much for a plan with 200 employees. Am I wrong?

Thanks for any help.

Dolores

[GBurns]

WOW!!! Are you sure of this $50,000? 15% of the premium should not be anywhere near $50,000.

I have never seen or heard of 1 this high. I have also not seen a "guideline" or standard. It is usually what the traffic will bear and this is usually based on competition.

Call a few agents (consultants) and see what they are doing. Many will be commission from the TPA and insurer only.

How much agent (referral, placement) commissions etc do they also get from the TPA and stop loss insurer for placing the business?

[Guest dywoody]

I am sure of the $50,000. Don't know how this ever happened. Thanks.

[mroberts]

Typical stop loss commissions are 15% however. Since that's what the agent is charging as a fee, it doesn't sound like anything is off base here. Just make sure that 15% isn't already built into what you're paying and the agent is then charging you another fee on top of your premiums.