Georgia Navigator Practice Exam

What advantage do Multiple Employer Trusts (METs) provide to businesses?

1. Enable businesses of all types to share resources

2. Allow employers to pay higher premiums to increase coverage

3. Allow businesses with similar characteristics to pool employees for lower premiums

4. Provide a full range of services for free to all employees

The correct answer is: Allow businesses with similar characteristics to pool employees for lower premiums

Multiple Employer Trusts (METs) provide the significant advantage of allowing businesses with similar characteristics to pool their employees together, which can lead to lower insurance premiums. When companies join a MET, they combine their risk exposure. This collective pooling can often result in economies of scale, as the shared risk reduces individual businesses' financial burden compared to if they were to purchase coverage independently. By combining their resources and risk profiles, businesses can negotiate better rates and potentially gain access to superior benefits that may not be available to smaller companies operating alone. This collaborative approach to employee benefits is especially beneficial for smaller businesses that might struggle to provide competitive insurance options on their own.