Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires various disclosures to be made regarding health insurance benefits and coverages. Existing law generally regulates the conduct of business between insurers and broker-agents, including requirements regarding contracts in which the broker-agent represents the insurer.

This bill, the Public Agency Benefits Intermediary Compensation Disclosure Act, would require a covered service provider, defined to mean a broker, agent, consultant, or advisor that meets specified criteria, to disclose to a public agency or its group health plan the direct and indirect compensation it expects to receive for providing brokerage or consulting services, among other information, before it enters into, extends, renews, or materially amends a contract or arrangement for brokerage services or consulting services with the public agency or its plan. The bill would also require a covered service provider to disclose compensation and material financial interests related to a covered health care benefits arrangement that the covered service provider recommends, places, renews, services, or materially influences for the public agency or its group health plan. Disclosure would be required under these provisions if the covered service provider reasonably expects it would receive $1,000 or more in compensation during the term of the contract or arrangement. The bill would require these disclosures at specified times.

This bill would prohibit a covered service provider from requesting, accepting, or receiving direct or indirect compensation in connection with brokerage services or consulting services provided to a public agency or its plan unless the compensation is disclosed, and would prohibit evasion of disclosure requirements. The bill would authorize the Insurance Commissioner to investigate alleged violations of these provisions and would set forth specified administrative penalties for violations.