Over the past several years, we’ve noticed a growing trend in the insurance industry: the need for cost-containment and stability. While these were always important, the rising costs of providing benefits plans (consider the increasing costs of specialty drugs, for example), are bringing these aspects of a plan to the forefront.
Partly in response to this trend, and after extensive research and planning, Benefits by Design (BBD) Inc. launched Standalone® in 2017, and now, in partnership with ClaimSecure, we are proud to launch another cost-contained solution: our first budgeted Administrative Services Only (ASO) product, ASOnly.
What is an ASO?
Administrative Services Only (ASO) plans are a self-insured solution where 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 (since they only pay for what is actually being used, rather than set premiums), without sacrificing coverage employees want.
*plus any applicable administrative fees, commissions, and taxes.
What is Budgeted 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, which we’ve outlined below:
Want to learn more about our new ASOnly product? Register for our webinar on Thursday, June 20th beginning at 2:00 PM (EST) / 11:00 AM (PST)!
The Ideal Client for ASOnly
We’ve already written a blog post all about how to identify if an ASO plan is the right fit for your client’s organization, complete with a handy quiz to give out to groups, but here’s where we see ASOnly fitting in with your clients:
- Stable claims history. Because ASOnly is a budgeted solution, a stable claims history is necessary to properly determine what a realistic annual budget is for claims. The more accurate the budget, the stronger and more stable the plan.
- 35+ lives**. This is along the same lines as above, but 35 lives is a large enough group to determine that claims stability we’re looking for. With smaller groups, one employee’s claims can often destabilize the overall history, making a budgeted solution not ideal.
- Cash flow. The employer needs to have the necessary cash flows available to support the fluctuations in claims month-to-month, and to support larger claims.
- Willing to accept some risk. There’s no getting around it (and we would never wish to) – ASO plans and ASOnly put the risk on the employer, not the Insurer. 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.
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. For the right client, it can be a strong contender to the traditional insured solutions like our Benepac® or Benaccount® products.
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.