What is ASO Insurance?
Administrative Services Only is a self-funded health care plan of an employer providing benefits to employees using the company’s own funds. This of course leaves the employer directly responsible for claims and payments associated, but most employers purchase stop loss coverage as well, to mitigate the risk. Still, even with the stop-loss, employers as the proxy insurance company for its employees, is still liable for funding benefit plan claims.
Employers using ASO plans generally hire a third party administrator to process the claims and “run” the system for the employees, but the employer remains financially responsible.
What Are The Benefits of Having ASO?
For the past thirty-forty years or so ASO was preferred by enterprise or corporations that have over a thousand employees, but with rising health insurance costs, ASO is becoming the preferred method of coverage for small employers as well, because of the opportunity to cut down costs. See the list of benefits of having ASO benefits in your company instead of traditional forms of insurance coverage.
Are There Other, Similar Options?
You may have heard of or explored PEOs in the same line of consideration. In a PEO (Professional Employer Organization), a third party partners with the employers to provide a shared responsibility experience, but effectively assumed employmentship of all the existing employees to be able to provide the insurance coverage as the assumed employer.
This makes employers feel less in control and frustration quickly follows when the benefits decisions are out of their hands. In the event you can predict yourself feeling this way in that situation, PEOs are not the best choice for you. ASOs will leave you feeling completely in control and offer the best savings.