What is the function of a minimum premium plan (MPP)?

A minimum premium plan (MPP) is designed particularly to support self-insured plans against large losses. This means that while the employer or organization retains a significant portion of the risk by covering smaller claims, the MPP provides a safety net for catastrophic or unexpectedly large expenses. This approach allows organizations to manage costs effectively while protecting themselves from the financial impact of severe health-related claims.

The essence of an MPP is to strike a balance between self-insurance and traditional insurance coverage. Organizations utilize MPPs to control their healthcare costs while still having a form of coverage that mitigates the risk of high-cost claims. This makes option C the correct choice, as it reflects the primary purpose of a minimum premium plan.