Which statement is FALSE regarding Multiple Employer Trusts (MET)?

The statement that the employee has a right of conversion upon leaving the group insurance is not accurate when discussing Multiple Employer Trusts (METs). Under typical group insurance arrangements, a right of conversion allows an employee to convert their group coverage into an individual policy upon leaving the group. However, METs often have specific terms and conditions regarding conversion rights that differ from traditional group insurance policies.

In many situations, METs are designed to provide insurance at a lower group rate for small employers who pool their resources together. The structure allows them the benefits of group purchasing while sharing risks and costs, which can significantly enhance their bargaining power with insurers.

The formation of trusts by sponsors such as insurers, agents, brokers, or third-party administrators highlights the organization behind METs, ensuring that the plans offered are developed and managed effectively. The sponsor is responsible for developing the plan, setting underwriting guidelines, and administering the MET, which plays a crucial role in maintaining the integrity and functionality of the trust.

Therefore, the indication that employees have a universal right of conversion when participating in a MET does not generally hold true, making that statement false. Understanding the specifics of coverage and rights in relation to METs is vital to grasping how these trusts function in the overall landscape of