Health and Life Insurance

Category - Theory

What is an arrangement that allows very small groups to have some of the benefits of group insurance, specifically the lower costs?
  1. 501(c)(9) trusts.
  2. MEWA
  3. Blanket policy
  4. Franchise policy
Explanation
Answer: D - An arrangement that allows very small groups to have some of the benefits of group insurance, specifically the lower costs, is called a franchise policy. The franchise policy works like a group policy minus the master policy. Each member receives an individual policy allowing for individual coverage choices. Franchise policies require health information on the application and can be contributory or non-contributory.

Theory
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