Whenever you purchase health insurance from an agent or a broker, they are receiving a commission directly from the insurance company with whom they place your coverage. Insurance companies offer this commission to brokers in an attempt to encourage that broker to sell their product, versus the health plan of a competitor. All insurance companies offer commission payments to brokers, but the percentage that they pay is not always the same. Some commissions are a one-time flat rate, but most are residual and based on the premium amount. Residual commission means that your broker will receive a portion of your premium payment for every month that you are insured under that health plan. This can range from 5% to 20% of the premium amount, depending on how long you have been insured with that insurance company and the agreement that the insurance company has with your broker. Many consumers believe that if they purchase insurance directly from the insurance company, and not through an agent or broker, they will be able to acquire health insurance at a lower rate because they will not need to pay the commission. This is not true. Health insurance rates are approved and regulated by your department of insurance and the rates quoted to a consumer must be the same, regardless of the source of the quote. The insurance companies are willing to pay a broker this residual commission because it is the job of the broker to act as your continued representative for that insurance company for the entire time that you maintain your health plan. This broker should assist you with billing concerns, claims processing, plan descriptions, finding a physician and much more. In short, your broker should take the place of the customer service rep that works directly for the insurance company and should be your point of contact with any questions or concerns about your coverage. A good broker will encourage you to contact him for all of your needs before calling the insurance company directly. Let him earn his commission!!!