There's a story explaining this in the Sacramento Business Journal, by Kathy Robertson on August 22.  The feature is for subscribers only, but there is a summary on a free website.  The technique is called a "wrap-around".  (I think Ms. Robertson misunderstood it a little, because she identified Health Savings Accounts as the tool to execute the wrap-around, but I don't think it's possible to abuse an HSA like this.  I think it's more likely Health Reimbursement Arrangements or Flexible Spending Arrangements.)

The broker sells the small business a high-deductible health plan, with a lower premium, but then "immunizes" the employees from the high deductible by having the employer wrap it so that the employee pays only a fraction of the deductible.  As a result, the employee faces the incentives of a traditional policy (e.g. $20 co-pay, $250 deductible) and the incentives for consumer-directed health care collapse.

Note: this is completely different than an employer depositing a few hundred dollars in your HSA every year, to motivate you to switch to a consumer-driven health plan.  It that case you control the dollars, and the consumer-driven incentives are not destroyed.  With the wrap-around, the employee does not see the dollars, but sends the invoice to his employer, just like any other business expense.

Because the wrap-around destroys the incentives for consumer-driven care, claims experience is much higher than in a real consumer-directed health plan.  All that the broker and small employer have really achieved is to fool the carrier into thinking it's written a consumer-driven policy when it's really written a traditional policy.

The carriers have wised up and are asking brokers to sign contracts that contain commitments not to wrap-around, or they'll lose their commissions.

What's the public policy issue? The state must ensure that such contracts are enforceable.  Both the sanctity of contract, and the success of consumer-driven health care, depend upon it.