Exam SHRM-CP Topic 1 Question 378 Discussion

Explanation: The Youngblood Company's arrangement is known as a health purchasing alliance. This gives smaller businesses more purchasing power and leverage in negotiations with health insurance providers. In an administrative services only plan, the employer creates a claim fund and then hires an insurance company to manage it. In a third party administrator plan, a business besides the employer or the insurance company handles claims. In a partially selffunded plan, employers only provide a certain amount of coverage. This type of plan ensures that a small business will not be ruined by a single large claim.