Free rent may be “kick back” from insurance broker

Can an insurance broker pay the rent for a company and in return get their health benefits business?  I know of a situation where this is happening.

Whistle Blower Wannabe

Dear Whistle Blower Wannabe,

The insurance broker is prohibited from inducing a client to buy a product — that is, paying the client what amounts to a “kick back”.  It’s technically called “rebating” and all states have laws addressing this in various ways.

Unless someone is motivated to uncover and sue over the free-rent-insurance deal, it is likely to go unnoticed.  Indeed, any private company is free to award its insurance business to whomever it chooses, even to its own landlord, no matter how much or how little the rent is.

A whistle blower would need to go to the state’s insurance regulator, who is charged with enforcing the rebating/kick back laws.  The regulator would advise on what was needed for evidence, etc.  It’s possible the regulator would not accept an anonymous tip, or keep your identity confidential.  Take that into account before you decide whether to pursue this –you might be risking your job, your reputation (even though you are wearing the white hat here), and your future career.  Whistle blowers risk a lot; make sure you are willing to do that before you make that call.

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.