Budgeted Administrative Services Only (ASO) Plan Through ASOnly
By: Benefits by Design | Tuesday June 18, 2019Updated : Wednesday January 13, 2021
Over the past several years, we’ve noticed a growing trend in the insurance industry: the need for cost-containment and stability.
In response to this trend, Benefits by Design (BBD) Inc., in partnership with ClaimSecure, is proud to launch our first budgeted Administrative Services Only (ASO) product, ASOnly.
What is an Administrative Services Only (ASO) plan?
Administrative Services Only (ASO) plans are a self-insured solution and one of several benefits funding options. This means employers pay for their employees’ eligible health and dental claims*, up to a stop-loss threshold.
With the right fit, this arrangement provides a measure of cost-savings to employers. As a result, employers only pay for what is used, rather than set premiums, without sacrificing coverage employees want.
*Plus any applicable administrative fees, commissions, and taxes.
What is a Budgeted Administrative Services Only (ASO) plan?
A budgeted ASO plan works similarly to a traditional benefits plan in the way of monthly premiums.
The difference comes at year-end when the provider reviews the claims throughout the year, totals them up, and compares them to the total of annual premiums. This creates three outcomes.
The Ideal Client for ASOnly
A budgeted ASO plan is the right fit for your client, if:
- They have a stable claims history. A stable claims history is necessary to determine what a realistic annual budget is for claims. The more accurate the budget, the stronger and more stable the plan.
- Their organization is 35* or more lives. With smaller groups, one employee’s claims can often destabilize the overall history, making a budgeted solution not ideal. Additionally, a group with 35 lives or more is likely to be more stable, due to the number of employees making claims. to determine that claims stability we’re looking for.
- Their cash flow to support monthly fluctuations. The employer needs to have the necessary cash flows available to support the fluctuations in claims and to support larger claims. For instance, one month could be very high in claims while the next very low.
- They’re willing to accept some of the plan risk. ASO plans and ASOnly puts the risk on the employer, not the Insurer. As a result, employers need to be aware of what this means and be willing to accept it in order to reap the potential cost-savings.
*Some exceptions may apply. Please speak with your Regional Director or BBD Quoting team for more information.
In conclusion, ASOnly provides small- to medium-sized Canadian employers with a state-of-the-art Budgeted ASO plan with the feel of a traditional insured plan.
To help you sell this product to your clients, we’ve created the ASOnly Advisor Guide, which summarizes everything you need to know about the product and the process, from quoting, sale and implementation, through to reconciliation and renewal.