Administrative Services Only (ASO)
Control the costs of an employee benefits plan by self-funding the health and/or dental benefits.
LOW COST, CUSTOMIZABLE BENEFITS FUNDING MODEL
With an Administrative Services Only (or ASO plan), you control the cost of your health and dental benefits, without sacrificing coverage.
WHAT IS AN ADMINISTRATIVE
SERVICES ONLY (ASO) PLAN?
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.
fully insured and ASO
✔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
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
Advantages of an ASO
By assuming some of the risk, you enjoy lower administrative costs and the elimination of insurance company profit and risk charges.
Endless possibilities for plan design, including comprehensive choice in covered benefits and exclusions.
Clear and consistent fee structures and elimination for negotiation of charges with the insurer.
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.
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.