Media & Insights

Judge Rules: FL School District Allowed to Sue Giant Brokerage for Hidden Fees

Great news! Osceola School District in FL has prevailed against a motion to dismiss its lawsuit against Gallagher, one of the largest brokerage firms in the country. Osceola had a contract with Gallagher that was typical of most employers. They thought they were paying the firm about $200K to advise them on how to select and manage their self-funded health plan. Instead, Gallagher was making $2M – 10x off the account that amount in undisclosed fees from carriers and other middlemen outside their contracted rate! When Osceola hired a new consulting team, including Health Rosetta advisor (rising star and friend of AllBetter) Carolyn Grant, they saved $20M+ in the first few years! With an honest consultant who was truly only working for them, they now know all the ways they had been taken for a ride by the health care status quo that is bankrupting patients, employers, unions and taxpayers across the fruited plain. But unlike most firms who figure this out – Osceola fought back and sued. Gallagher threw up a bunch of nonsensical reasons behind their motion to dismiss, and just LOST. Expect General Counsels for all the big brokerages (such as Aon, Mercer, Towers, Lockton, McGriff, etc) to start freaking out, since the business model of hidden and additional fees, multiples above what is claimed a the much lower flat fee for the employer, is absolute standard practice across most of the biggest players and many of the smaller players.

And so, that begs the question for every business – are you actually paying your broker, carrier, PBM, stoploss provider, administrator and all your other vendors what you think you are? Do you even know what everyone involved in delivering your health plan makes and for what? Did you agree to that in advance? Under the Consolidated Appropriations Act of 2021, you are now more on the hook than ever before for knowing this information and acting on it as a responsible fiduciary.

(Pssst – AllBetter Health can help you figure out whether you are being similarly taken to the cleaners, and fix it if you are!)

Spread the love
Share This: