Why would a health trust usually be considered unsuitable for a smaller employer?

A health trust is typically structured to accommodate a larger pool of insured individuals, which allows for more effective risk distribution and management. For a smaller employer, the impact of a few large claims can be disproportionately significant. If an employee from a small group files a high-value claim, it can lead to a significant increase in the overall costs for the health trust. This volatility can result in higher premiums or unexpected financial burdens that small employers may find difficult to manage.

In contrast to smaller groups where risk is concentrated and can fluctuate greatly based on the health events of a few individuals, larger groups tend to experience more consistent risk profiles. Thus, a smaller employer might find that a health trust increases their financial risk rather than mitigating it, making it an unsuitable option.