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Administrative Services Only (ASO)

Control the costs of an employee benefits plan by self-funding the health and/or dental benefits.


With an Administrative Services Only (or ASO plan), you control the cost of your health and dental benefits, without sacrificing coverage.


With an ASO plan, you pay for employee claims, administration costs for handling those claims, and applicable taxes. You also manage the risk of your benefits plan.

Differences between
fully insured and ASO

Fully Insured

yes Consistent, month-to-month costs during the rate guaranteed period

yes Insurer manages the plan’s risk during rate guaranteed period

no Less transparency into rate charges and adjustments

no Yearly negotiation may happen with the insurer

no No return of premiums if the actual costs of the benefits plan are less than paid premiums

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Administrative Services Only

yes Greater flexibility in plan design structure and coverage, with the same servicing as insured plans

yes Pay directly for the costs of the plan, no additional hidden charges

yes Renewal negotiations are not required

yes Extra protection and insurance for high-risk costs is available

no An unexpected high-cost claim may have a more significant negative impact financially

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Advantages of an ASO

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Lower Costs

By assuming some of the risk, you enjoy lower administrative costs and the elimination of insurance company profit and risk charges.

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Plan Flexibility

Endless possibilities for plan design, including comprehensive choice in covered benefits and exclusions.

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Clear and consistent fee structures and elimination for negotiation of charges with the insurer.

ASO Options

Non-Budgeted ASO

Non-Budgeted ASO arrangement allows for direct billing of claims with no calculated month-to-month premiums other than set cost benefits, such as Travel. In this arrangement, you can expect to provide a security deposit to the insurer to protect against loss of funds for paid claims.

You will need to have a steady cash flow to support the changes each month as funds can fluctuate based on employee claiming activity.

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Stop Loss

For an additional cost, you can include stop-loss protection for your ASO Extended Health Care. Stop-loss protection provides you with insurance for expenses above a limit for each individual covered under the benefit plan. We strongly recommend that you include stop-loss to help keep risk exposure controlled.

A $10,000 threshold is typical for stop-loss. With stop-loss, if an employee claimed a $23,000 drug, you would be responsible for $10,000, plus applicable administrative fees. Your insurer will pay the remaining $13,000.

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