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.
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.