What type of arrangement might Mr. Frankston pursue to manage his group's health plan risk while minimizing taxes?

Mr. Frankston might consider pursuing a TPA (Third Party Administrator) arrangement to effectively manage his group's health plan risk while minimizing taxes. A TPA is an organization that provides comprehensive administrative services for health plans, including claims processing, member services, and compliance oversight, without taking on the financial risk associated with those health plans.

By using a TPA, Mr. Frankston can maintain more control over the health plan's finances and operations, which can contribute to efficiency and better risk management. This arrangement also aids in creating a self-funded plan where Mr. Frankston's group could save on premiums typically associated with fully-insured plans, thus optimizing tax efficiency. The cost savings realized from a TPA arrangement can be significant, as it allows for more predictable budgeting and potential tax advantages related to self-funding.

Other arrangements like a PPO (Preferred Provider Organization) or an HMO (Health Maintenance Organization) typically shift more of the risk to the insurance carrier and may involve higher costs due to the insurance premiums that are less flexible with regard to tax management. An ASO (Administrative Services Only) arrangement can also provide administrative support similar to a TPA but doesn’t focus equally on risk management and tax optimization in comparison to the primary benefits a