(3) Cooperative Purchasing Arrangements

Some school districts have attempted to band together with other districts to jointly purchase benefits for their employees. For example, the Metropolitan Detroit Bureau of School Studies (often referred to as Metro Bureau) maintains such an arrangement.[234]

In a cooperative purchasing arrangement, each district maintains its own claims experience and has its own individual contract. However, by purchasing the benefits together with other districts and thereby increasing the number of employees covered, a substantial discount can be obtained from an insurance carrier or third-party administrator.

Cooperative purchasing arrangements, while possible for small districts, may be most appropriate for medium- to large-sized districts. Very small districts have significant claim fluctuations and are accordingly difficult to service on a continuing basis. Medium- and large-sized districts have the more certain claims experience that the provider of the cooperative purchasing arrangement needs to accurately provide a discount.