Arizona Life and Health Practice Exam

What is the term for the grouping of multiple small employers to obtain group health insurance at better rates?

1. Multiple employer association

2. Cooperative insurance

3. Group health network

4. Multiple employer trust

The correct answer is: Multiple employer trust

The term for the grouping of multiple small employers to obtain group health insurance at better rates is "Multiple Employer Trust." This concept allows these small employers to join together, effectively pooling their resources and risks. By forming a trust, they can provide their employees with access to group health insurance benefits that are typically only available to larger companies. This arrangement offers multiple advantages, such as reduced premiums and enhanced bargaining power with insurance carriers, which small employers often lack individually. Additionally, the trust can create a more attractive benefits package for current and potential employees, fostering employee satisfaction and retention. While "Multiple Employer Association" might seem similar, it refers specifically to a formal association established for employers rather than a trust structure focused on insurance pooling. "Cooperative insurance" generally indicates a broader concept of shared risk among members but does not specifically refer to the arrangement for obtaining health insurance benefits. On the other hand, a "Group health network" typically pertains to a network of providers rather than the concept of multiple employers collaborating for insurance purposes. Each of these alternatives does not encapsulate the specific legal and financial relationship seen in a Multiple Employer Trust arrangement, which uniquely supports small employers seeking collective insurance solutions.