What is the broker compensation disclosure requirement under the CAA?
Last updated October 2, 2026
Since December 2021, brokers and consultants expecting $1,000 or more in compensation for services to ERISA group health plans must disclose their direct and indirect compensation in writing before the contract is signed or renewed. Fiduciaries must use it to assess fee reasonableness.
The Consolidated Appropriations Act extended 408(b)(2)-style fee transparency, long familiar in retirement plans, to health plans. Any broker or consultant reasonably expecting $1,000+ in direct or indirect compensation for services to an ERISA-covered group health plan must disclose, in writing and before engagement or renewal: the services provided, and all compensation — commissions, overrides, bonuses, and other indirect payments included.
The fiduciary's job doesn't end at receiving the disclosure. You're expected to actually evaluate whether total compensation is reasonable for the services delivered — and a contract without the required disclosure is a prohibited transaction.
Practically: request disclosures ahead of every renewal, review them at a committee meeting, compare against market where possible, and record the conclusion in the minutes.
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