The Real Deal New York

Health care for all? Compass to roll out agent coverage

VC-backed firm isn't paying for insurance
By E.B. Solomont | October 22, 2018 12:30PM

Robert Reffkin (Credit: iStock)

UPDATED, Nov. 15, 11:35 a.m.: With more than 7,000 agents working under its banner, Compass is wading into health care coverage.

The venture backed-firmed said Monday that it’s partnering with a human resources provider, Idilus HR, to provide agents with access to health care from Cigna. Agents will have the opportunity to purchase their own health care plans in 13 states.

Starting in November, Compass agents will be able to enroll in a Cigna plan in states where the firm currently operates, including New York, California, Florida and Illinois.

A spokesperson for the company confirmed that Compass is not paying for the coverage. Compared to plans available through state health care exchanges, Compass claims agents will save up to 62 percent on insurance (though it didn’t go into detail on how it arrived at that number).

“Because prices are so high on the open market, there are tens of thousands of agents who are going without any health insurance,” CEO Robert Reffkin said on Instagram.

Historically, agents who are independent contractors haven’t been eligible for employer health insurance. One real estate executive said firms don’t offer or administer insurance because it would be considered an employee benefit, potentially jeopardizing the independent contractor status of agents. In New York, agents are able to purchase insurance via the Real Estate Board of New York, which connects members to vendors who offer insurance.

The offering is likely to become the latest tool in Compass’ arsenal, as it aggressively woos agents across the U.S. Earlier this month, agent Jonathan Keith’s 17-person team in Fort Lauderdale left Coldwell Banker for Compass in part because of the health care offering.

Over the past year, Compass, which has raised $1.2 billion from investors to date, has been growing aggressively by hiring agents and acquiring firms nationwide. It currently has offices in New York, California, Illinois, Washington, Pennsylvania, Texas, Georgia, Massachusetts, Florida, Connecticut, Colorado and Washington, D.C.

Compass is also offering agents the opportunity to invest commission dollars into stock options. For every dollar agents invest, the firm will give them an additional 30 cents.

The company is valued at $4.4 billion following its latest round, led by SoftBank and Qatar Investment Authority.

Clarification: This story has been updated to clarify that Compass is partnering with a third-party agency that will give agents access to health insurance plans from Cigna.