Committee Wants To Make Direct Fee-Only Compensation The Gold Standard For Benefits

Phoenix, AZ, The Camby Hotel (Feb. 7, 2022) — A group of seven professionals throughout the health care industry announced the formation of The Committee for Fee-Only Benefits Advisors. The committee’s mission is to make direct fee-only compensation the benefits industry gold standard.

Darren Fogarty, executive director of the committee, explained in a statement, “Traditionally, health insurance brokers have been compensated mainly though commissions as well as bonuses from insurance companies. This compensation positively correlates with an employer’s total health care spending, so that as expenses rise so does the broker’s pay. This does not serve employers, employees (patients), or the country well.”

Fogarty continued, “However, in recent years forward-thinking brokers have begun to shift their
compensation toward fee arrangements, and some have even switched over to direct client fees
entirely (“fee-only”). These transparent and direct fees align the interests of the broker and the
employer. They are consistent with advising relationships in other professions, like law and accounting.”

The committee seeks to provide leadership and guidance on the advantages of fee-only
compensation, both for benefits brokers themselves and the employer clients they represent. To
provide this guidance, the committee plans to hold quarterly webcast events with prominent thinkers and to release position papers on broker/advisor compensation and fee transparency.

David Contorno, founder and CEO of EPowered Benefits, a fee-only health care benefits advisory firm in Charlotte, N.C., offered his thoughts on how important the advisor-client relationship is: “The broker is the first link in the chain of advice for employers, who provide half of all health care coverage in the U.S. When a broker’s payment is realigned from the status quo, it opens a path of opportunity to fix most of — if not all — the perverse incentives that continue at nearly every segment of the healthcare system. The results are nothing short of remarkable. Transparent compensation redefines how brokers give advice.”

Gayle Brekke, a PhD candidate at the University of Kansas Medical Center and a longtime employee benefits actuary, made the connection between how a broker is paid and how patients experience health care on the ground: “The root of all dysfunction in our health care system is that we think about health care differently than we think about other goods and services. We require transparency in the purchase of all other goods and services, and when we require transparency in health care, we enable a dramatically better and healthier health care system. The importance of restoring the benefits broker/employer relationship to one based on transparency and fiduciary trust cannot be overstated. Fee-only benefits advisors are best positioned to incorporate the cornerstones of healthy health care financing and delivery, such as direct primary care, into the health plans they advise on.”

Emma Fox, partner and chief operating officer at EPowered Benefits, emphasized how direct compensation restores control and transparency to the health care system overall: “Everyone involved in the purchasing of health care, and the health insurance we often use to pay for it, needs to demand two things: (1) control, and (2) transparency. That includes brokers who need to be able to control the way they are compensated so it truly reflects their high value. It includes employers who have a right to know exactly where their company and employee dollars are going and why. It also includes employees who, as patients, should have the tools and ability to consider quality health care options over a list of printed names in a directory. Finally, it includes doctors who deliver the care and have a responsibility to refrain from harming the patient clinically and financially. Everyone in health care has an opportunity and obligation to align themselves with the goal of reaching better health care outcomes all around.”

Committee Mission, Vision And Agenda

Vision - An employee benefits advisor profession renowned for client-first, fiduciary principles
based on clear and transparent fee-only compensation.

Mission - The mission of the Committee for Fee-Only Benefits Advisors is to make transparent, fee-only compensation the industry gold standard.

Strategy - Identify industry thought leaders, academics, experts and practitioners to become
founding members of a committee to advance the vision and mission.

Meaning - Advancing the vision and mission through research and education to the
health care industry, to policymakers, and to employee benefits advisors on why fee-only
compensation is best for the employer client.

Tactics - Produce quarterly activities and programs on fee-only benefits advising and its importance, including virtual panel discussions, thought-leadership papers, and educational materials. Operate the informal “committee” at a nonprofit standard. Put the committee on a path
toward official 501(c)(3) nonprofit status.

Operations - The committee is launched by a group of seven health care industry leaders as a
volunteer effort. The executive director is Darren Fogarty.

Committee Member Biographies

David Balat, MHA, MBA is the Director of the Right on Healthcare initiative at the Texas Public Policy Foundation, a non-profit thinktank in Austin, TX that promotes conservative policymaking. Balat has broad experience across the health care spectrum, with expertise in health care finance and more than 20 years of industry leadership and executive management experience. He is a fierce patient advocate, an earnest health care reformer, and is often featured in an array of media outlets on health care issues.

Gayle Brekke, FSA, MBA, PhD Candidate is a sixth-year doctoral student at the University of Kansas Medical Center and a Fellow of the Society of Actuaries (SoA). Brekke has nearly 20 years of experience as a health actuary and business leader with Assurant Employee Benefits and Sun Life. She uses actuarial and economic principles to explore the frontier of health care delivery and finance, with her forthcoming dissertation focusing on direct primary care, an innovative way for patients to receive and pay for their health care directly.

David Contorno is the founder and CEO of EPowered Benefits, a fee-only health care benefits advisory firm in Charlotte, NC and Portland, OR. Contorno has 21 years of experience in employee benefits and is an outspoken critic of the status quo brokerage business model. He is a member of the board of advisors of the Validation Institute, a strategic coach at Q4intelligence, and one of the inaugural Health Rosetta advisors. Contorno is regularly featured in prominent media outlets and high-profile books on health care thought-leadership. He also is a frequent co-advisor to benefits brokers.

Darren Fogarty, MEM is an analytics and strategy advisor at Adept Benefits, a health care benefits advisory firm in Seattle, WA, and is a director at the Institute for the Fiduciary Standard, a nonprofit thinktank in Washington, DC. Fogarty has four years of experience with benefits advising and has spent six years researching fiduciary advice and fee-only advisor compensation in financial services. He has (co)authored dozens of articles on the nature of sales, advice, fiduciary duty, benefits, and health care/insurance economics and policy.

Emma Fox is the COO of EPowered Benefits, a fee-only health care benefits advisory firm in Charlotte, NC and Portland, OR, and is CEO of Signal Health Consulting, a health care data analytics company that provides transparency to employer group health plans. Fox has over 15 years of experience in employee benefits, is an outspoken proponent for transparency in health care, and is an advocate for women in benefits. She is founder of Empowered Leadership, a mentoring organization for minority group professional development.

Mike Hanlon, PhD, MA is founder and CEO at Abett, a SaaS technology company in Seattle, WA that enables employers to transfer benefits and health care data across an array of vendors. Previously, Hanlon was the seventh employee of Amazon where he worked in business and software development. He also has six years of experience as an economics and statistics lecturer, and as an assistant professor of Global Health at the University of Washington.

Leon Wisniewski is founder of Health Cost Labs, a technology and data analytics company that offers transparency in health care pricing from insurers and hospitals, and is the pricing director at Medxoom. Wisniewski has over 20 years of experience as an actuary, a health care cost modeler and a forensic auditor. Prior to Health Cost Labs, Wisniewski worked at BlueCross BlueShield, which familiarized him with fee schedules, billing patterns, and the inefficiencies created from information blocking.