12.9 Alternative Methods
Nontraditional health insurance plans have increased due to rising health care costs.
Self-Insurance
Large corporations especially will self-insure their sick-leave plans for their employees. Labor unions, fraternal associations, and other groups often self-insure their medical expense plans through dues or contributions from members. Others may self-insure part of a plan and use insurance to protect against large, unpredictable losses.
Administrative Services Only (ASO) or Third-Party Administrator (TPA) entities are paid a fee to provide the service of handling paperwork and processing claims, which alleviates the task from corporations.
A Minimum Premium Plan (MPP) insures against a certain level of large, unpredictable losses above and beyond the self-insured level and is available for a fraction of the insurer's normal premium.
Multiple Employer Trusts
Multiple Employer Trusts (METs) are another alternative form of group coverage. METs are used for small group employers, and the employer must become a member by subscribing to the trust.
Once subscribed, the employer is then issued a Joinder Agreement detailing the relationship between the trust and the employer and the coverages the employer has chosen to offer its employees. Each employee in the company is issued an individual certificate of insurance.
Multiple Employer Welfare Arrangement
Employees covered under a Multiple Employer Welfare Arrangement (MEWA) are required by law to have an "employment-related common bond." In the MEWA, a number of employers pool their risks, self-insure, and attain tax-exempt status.
