Recently, CLHIA released Guideline 19 to address the disclosure of compensation for the distribution of health benefit plans beginning in July 2018. Their stated purpose is to “get ahead of the regulators.” As a regulated industry that relies on licensed professionals to provide critical advice on complex products, the concept of transparency and disclosure is a good one. However, any disclosure that the industry implements must be fair and equitable for all participants.

At Benecaid, we will advocate for consistent disclosure across all channels of distribution. The proposed Guideline, as it is currently drafted, would disadvantage our trusted Advisor network relative to carriers selling directly to plan sponsors. Where benefits are administered by a TPA such as Benecaid, the guideline has been drafted to require disclosure for TPA compensation and costs, but with no corresponding obligation for the carrier to disclose the very same costs. So when the TPA performs functions on behalf of the carrier such as enrolment, implementation, policy issuance, claims adjudication and payment, customer service, and account management, the proposed Guideline requires the TPA to disclose all compensation for those responsibilities. We believe this will be confusing for the Plan Sponsor given that we already disclose all of our fees to the client. It also creates an uneven landscape where the carrier can unfairly compete for the customer by not disclosing any of their costs.

Benecaid believes Guideline 19 is therefore inherently anti-competitive and misleading in its current draft format. We are actively advocating through TPAAC to inform CLHIA of our perspective and our unwillingness to move forward with the Guideline as currently drafted. Any guideline must consider all of the participants who service the client, and the fact that we are dealing with products and services. A reasonable time horizon is necessary, and the industry should not rush to implement a Guideline that still clearly needs revision. We will keep you apprised of our efforts.

At Benecaid, we will be advocating with our carriers and through TPAAC to ensure that any disclosure is fair, consistent and transparent to the customer. If you have any questions about our position, please contact Peter Berczi, CEO of Benecaid, directly, at 416-626-8786  extension 7337 or pberczi@benecaid.com.