Photo: Getty Images

Employers often turn to brokers to help them find the right health care plan for their workers. But there's a catch: Brokers have several layers of incentives to steer companies toward plans with higher premiums.

How it works: For starters, brokers' commission is a percentage of the plan's total annual premium. Higher premium, higher commission. But there's more, as ProPublica reports.

  • Insurers offer brokers big bonuses to the agents and brokers who rake in the most business, including cash (up to $100,000 per employer) and trips to the Bahamas.
  • Those bonuses are built into the insurance plans' premiums, but the costs aren't disclosed to employers unless they ask.
  • "It's a classic conflict of interest," Eric Campbell, a University of Colorado bioethicist, told ProPublica.

Some brokers are trying to do better, switching to flat fees instead of commissions, hoping to draw a sharper contrast with agents who may not have the employer's bottom line in mind.

  • But even efforts to work around this incentive structure can go awry.
  • Morris County, New Jersey paid its broker directly, in an effort to make the broker unbiased about which plans it recommended. The broker collected that fee and also a $235,000 commission from Cigna, according to the lawsuit.
  • It also accuses the broker of hiding the costs of switching to a Cigna plan, including $800,000 in administrative fees.

Go deeper: The unclear benefits of drug price coalitions

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Politics: Trump calls Fauci a "disaster" on campaign call.
  2. Health: Coronavirus hospitalizations are on the rise — 8 states set single-day coronavirus case records last week.
  3. States: California to independently review FDA-approved coronavirus vaccines
  4. Wisconsin judge reimposes capacity limit on indoor venues.
  5. Media: Trump attacks CNN as "dumb b*stards" for continuing to cover pandemic.
  6. Business: Consumer confidence surveys show Americans are getting nervousHow China's economy bounced back from coronavirus.
  7. Sports: We've entered the era of limited fan attendance.
  8. Education: Why education technology can’t save remote learning.
Dion Rabouin, author of Markets
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The 2020 holiday season may just kill Main Street

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State of play: Anxious consumers say financial concerns and health worries will push them to spend less money this year and to do more of their limited spending online.

California to independently review FDA-approved coronavirus vaccines

California Gov. Gavin Newsom. Photo: Justin Sullivan/Getty Images

California will "independently review" all coronavirus vaccines approved by the Food and Drug Administration before allowing their distribution, Gov. Gavin Newsom (D) announced at a news conference Monday.

Why it matters: The move that comes days after NAID director Anthony Fauci said he had "strong confidence" in FDA-approved vaccines could cast further public doubt that the federal government could release a vaccine based on political motives, rather than safety and efficacy.