How to read Schedule A broker pay

Where broker pay sits on the form

Read one Schedule A per insurance contract. The 2024 form is the layout in current filings.

Part I, line 1. Carrier name, EIN, NAIC code, contract or identification number, approximate number of persons covered at the end of the policy year, and the policy or contract year (From and To).

Part I, lines 2 and 3. This is the carrier-reported broker pay. Line 2 is the total commissions and the total fees. Line 3 lists each agent, broker, or other person paid, in descending order: sales and base commissions, then fees and other commissions, a purpose code, and an organization code. Those dollars are what the carrier reported on that contract. They are not a bill from the broker to the employer.

Part III is the welfare contract. Line 8 checks the benefit type: health (other than dental or vision), dental, vision, life, stop loss, and the rest. Line 9 is the experience-rated contract: premiums, benefit charges, and the remainder of premium, including retention. Retention has its own commissions line, 9c(1)(A), which is the carrier’s accrual, not a second copy of Part I you should add on top. Line 10 is the nonexperience-rated contract: total premiums or subscription charges paid to the carrier, plus any acquisition or retention cost the carrier incurred that was not already reported in Part I, line 2.

Part II is not the medical premium. Part II is investment and annuity contract information. On a medical welfare filing it is often blank. Do not read Part II as the health premium.

The filing instructions and the form are on the Department of Labor’s Form 5500 page. To open a filing, start with Form 5500 search.

What carrier-reported broker pay cannot show

Schedule A is one carrier, one contract, one policy period. Call the Part I dollars carrier-reported broker pay every time. These are outside that box:

• Consulting fees the employer pays the broker directly. They never hit the carrier’s commission system, so they are not on Part I.
• Fees billed through a PEO or a payroll company. The carrier may not see them, and the sponsor name on the filing may be the PEO rather than the operating company.
• Compensation on a self-funded TPA or stop-loss arrangement that does not file a medical insurance Schedule A the same way. A fully insured medical contract gets a Schedule A. A self-funded plan may file a stop-loss Schedule A, or none for the medical claims, and the TPA fee is often a plan expense, not a Part I commission.
• Whether the renewal was marketed when the carrier stayed the same. The same contract number, renewed, does not tell you whether anyone else was quoted.

Self-funded is a standard option shopped every renewal alongside fully insured and level-funded when group size and claims fit. Running a custom self-funded structure, once that option is chosen, is priced in the engagement letter before that work starts. The shopping is part of the renewal. The Schedule A read is not a substitute for it.

Three traps that throw the comparison off

Premium is not the company’s share. Schedule A premium and subscription charges include employee payroll contributions. A CFO who compares the filing to the employer-only general-ledger account will think the plan costs more than the company paid. Sometimes one contract also bundles dental, vision, or life. Check Part III line 8 before you divide premium by people.

The headcount is not payroll. The main Form 5500 reports participants at the beginning and end of the plan year. Schedule A line 1(e) is the carrier’s approximate number of persons covered at the end of the policy year. Those are the filer’s count or the carrier’s count. Sometimes the figure is total members. Sometimes it is a placeholder. Neither one is the payroll headcount, and neither one is the count a state uses to decide small group or large group. Large group health insurance is that other count.

The renewal date is the day after the policy period. Take the latest medical Schedule A. The renewal date is the day after the To date on line 1. The Form 5500 plan year at the top of the filing can be a different calendar, especially when the policy renewed mid-year or the plan year and the policy year were never the same.

A peer figure, and only the combined one

In the combined set of 52 Texas electrical, plumbing, and HVAC contractors published with the Health Plan Visibility Studies, median carrier-reported broker pay is 5.3% of medical premium, or $29 per participant per month. Median medical premium is $6,094 per participant. From the 10th to the 90th percentile, medical premium per participant runs from $3,802 to $9,972.

That is one combined set. Use it as context for a fully insured medical contract, after you have pulled dental, vision, and life out of the premium. It is not a target, and it is not a fee schedule.

Why the written disclosure beats the filing

The filing is public, and it is late. Form 5500 is due seven months after the plan year ends, or nine and a half months with a Form 5558 extension, so the newest Schedule A is usually one to two plan years back. Form 5500 search covers that lag.

The number a fiduciary can use before a renewal is the written disclosure. ERISA section 408(b)(2)(B), enacted in the Consolidated Appropriations Act, 2021, requires a broker or consultant who expects $1,000 or more in direct or indirect compensation to disclose it to the responsible plan fiduciary in writing, reasonably in advance of the contract. DOL Field Assistance Bulletin 2021-03 says the duty applies at any plan size.

Pay here is carrier commission, often set in the rates the carrier files with the state, and it is not billed to the employer. Every dollar paid on the contract is disclosed in writing, in dollars and per employee, before the plan goes through, for the current plan and every option quoted. How I’m paid.

A Form 5500 public-filing read can come first. It is an optional Step 0 before Step 1 in the seven-step process. It is not an eighth step. For employers with 100 or more employees, Steps 2 to 7 are the Renewal Control Plan, and the Plan Report is its first deliverable. Employers with 50 to 99 employees get the same seven steps. The size guide is group health insurance for employers with 50 to 500 employees.

Advisory analysis, not legal or tax advice.

What does Schedule A Part I actually show?

Part I is carrier-reported broker pay on that specific insurance contract. Line 1 names the carrier, the contract, the approximate number of persons covered, and the policy period. Lines 2 and 3 list total commissions and fees, then each person who was paid, with sales and base commissions, fees and other commissions, a purpose code, and an organization code.

What can Schedule A not show?

It cannot show consulting fees the employer pays the broker directly, fees billed through a PEO or payroll company, compensation on a self-funded TPA or stop-loss arrangement that does not file a medical insurance Schedule A the same way, or whether a renewal was marketed when the carrier stayed the same. The carrier stayed. The form does not say whether anyone else was asked.

Why is the premium on Schedule A higher than the company's share?

The premium or subscription charges include employee payroll contributions, not only the employer share. One contract can also bundle dental, vision, or life with medical. Part III line 8 is the checkbox list. If more than medical is checked, do not compare that premium to a medical-only peer.

Is the person count on Schedule A my payroll headcount?

No. The main Form 5500 participant count and the Schedule A covered-persons count are the filer’s count or the carrier’s count. Sometimes that is total members, employees plus dependents. Sometimes it is a placeholder. It is not the payroll headcount.

What is the plan's real renewal date?

Use the medical Schedule A policy period, line 1, From and To. The renewal date is the day after the latest medical policy period ends. That day can differ from the Form 5500 plan year printed at the top of the filing.

Why is a written disclosure better than the filing?

ERISA section 408(b)(2)(B), enacted in the Consolidated Appropriations Act, 2021, requires a broker or consultant who expects $1,000 or more in direct or indirect compensation to disclose it to the plan fiduciary in writing, reasonably in advance, at any plan size (DOL Field Assistance Bulletin 2021-03). The filing is last year’s carrier-reported broker pay. The disclosure is the current contract, in dollars and per employee, before the plan goes through. How I’m paid.

I built and sold a health insurance agency: grew it to 60 agents in about 3 years, then sold it. Licensed insurance agent since 2014: Texas license 2501238, NPN 17369817.