The federal disclosure your broker owes your employer, not you

Our commission-disclosure explainer covers what a producer owes an individual customer under state law. This is a different rule entirely: a federal disclosure requirement that runs from a broker or consultant to the employer sponsoring a group health plan — not to any individual employee — and it only exists because Congress added it in 2021.

Where this rule actually comes from

Section 202 of Division BB of the Consolidated Appropriations Act, 2021 added a new subsection — ERISA Section 408(b)(2)(B) — effective December 27, 2021. It requires a "covered service provider" delivering brokerage or consulting services to an ERISA-covered group health plan to disclose specified compensation information to a "responsible plan fiduciary" — in practice, almost always the employer itself, or whoever inside the company is designated to administer the plan — before the parties enter into the contract or arrangement. This sits inside ERISA's long-standing service-provider fee-disclosure framework, extended to group health plans for the first time by this 2021 law; the same basic disclosure duty had already applied to retirement-plan service providers for years.

Who it applies to, and the dollar threshold that triggers it

The requirement applies to a broker or consultant who reasonably expects to receive $1,000 or more in direct or indirect compensation in connection with the group health plan engagement — a low bar that captures the great majority of employer group health broker relationships, not just large ones. "Direct" compensation is what the plan or employer pays the broker outright; "indirect" compensation covers anything paid by a third party instead — commonly a carrier paying the broker for referring or placing the employer's business — which is exactly the kind of compensation an employer has historically had the hardest time seeing without being told.

What actually has to be disclosed

A covered broker or consultant has to describe the services they'll provide, disclose whether they're acting as an ERISA fiduciary with respect to those services, and lay out the direct and indirect compensation they expect to receive — including, where applicable, commissions, bonuses, finder's fees, and other incentive payments tied to the arrangement. This has to happen reasonably in advance of the employer entering into the contract, not after the fact, and the Department of Labor's Employee Benefits Security Administration (which enforces this requirement) has published guidance describing a temporary, good-faith compliance posture while the industry adjusted to the new rule, rather than immediate strict enforcement against every technical gap.

Why this is a genuinely different rule from state commission disclosure

Three real differences separate this from the state-level rules our other commission-disclosure page covers: it's federal, not state, law; it's triggered by a flat dollar threshold rather than a specific dual-compensation sales scenario; and the person it protects is the employer sponsoring the plan, not the individual policyholder or employee enrolling in it. An individual employee has no direct disclosure right under this specific provision — their own state's commission-disclosure rule, where one applies, is the separate, narrower protection that still runs to them personally.

What this means if you're checking a broker who works with employer plans

If a producer or consultant markets group health plan services to employers, this disclosure is a real, dated, federally required paper trail — an employer weighing that relationship can reasonably ask whether the broker delivered a compliant disclosure before the current plan year's arrangement was signed. A broker who can't produce one, or who visibly resists the question, is failing a specific federal obligation that exists precisely so an employer isn't left guessing who's actually paying their broker, and how much.