Tuesday, September 19, 2006

A little side money

Why does someone with grown kids take a consulting job for the state that pays $36,000 a year? If you're an employee-benefits consultant, you take the job because you can also earn a little side money from health insurance companies, a little being, perhaps, twice as much as the salary from the consulting job. Apparently, paying bonuses to 'consultants' who swing business your way is standard practice for companies such as UnitedHealth and Aetna.

There is a case being tried in Ohio where the consultant was specifically told that the client was aware of the practice of consultants being paid for bringing business to companies and did not want the consultant being influenced by the insurance companies. It made no difference to the consultant. His argument is that this is standard practice. Aetna has codified these payments. They pay .75% of the clients' total premiums if the consultant brings Aetna 90% of his Aetna clients; the rate goes to 1.25% for hitting 100%. The temptation is strong. But what about a little thing known as ethics?

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