Page 119 - Group Insurance and Retirement Benefit IC 83 E- Book

Eligible Groups

Exactly what constitutes an eligible group for group insurance purposes is regulated by

law since certain tax benefits accrue to group participants. Following is a short summary
of the common types of groups the law deems eligible for group insurance plans.

Single Employer Groups

A single employer group is probably the most familiar type. Under this arrangement, a

single employer makes group benefits available to its employees. Employers can be sole

proprietors, partnerships or corporations. Medium and larger sized companies provide the
primary market for single employer groups, which account for most existing group

insurance plans. They are also a lucrative source of new business for agents selling group
insurance plans.

Multiple Employer Trust

Groups composed of two or more small employers who join together to receive the same

group insurance consideration as larger employers are called multiple employer trusts or

METs. Without METs, many small employee groups would be ineligible for group
benefits since a group must have a minimum number of people-usually 10-to qualify. A

separate trust is formed to handle the group business, from collecting and paying

premiums to filing claims. Insurance companies and non-insurance organizations sponsor
and administer METs.

Organized Unions

Organized unions are groups comprised of workers in related fields, such as the

Communications Workers of America, the United Auto Workers and any other organized

labor or workers' union. Federal law requires a trust to be established to collect funds and
otherwise administer employee benefits for unions.