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among all employers by charging each employer a premium
commensurate with its covered risk.
The relationship of the Trust to each participating employer
more closely mirrored self-funding than insurance. As a matter
of fact, the Trust Agreement provided that each employee's claim
could be funded only from the account of the employee's employer,
and that an employee did not have recourse against the employer,
the Trust, or any other person, to the extent of any shortfall.
It also is relevant that: (1) Prime accounted for each
employer's account separately; (2) the Trust Agreement provided
rules under which an employee's benefits would be reduced in the
event of a shortfall; (3) the Trust held and invested an
employer's contributions until benefits had to be paid to its
employees; (4) the Prime Plan did not pool all claim risk within
the Trust; and (5) an employer's contributions to the Trust could
pay its employees' claims after the year's end, while an insurer
will not return an insured's premiums to it at the end of the
policy.
Petitioners argue that the Suspense Account provided the
risk shifting necessary for the Prime Plan to qualify under
section 419A(f)(6). We do not agree. Notwithstanding the
reasons asserted by petitioners for the Suspense Account, the
record shows clearly that the Suspense Account's primary purpose
was to pay fees and expenses, and that only a de minimis amount
of funds was actually disbursed from the Suspense Account to
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