Administrative Services Only (ASO)

An Administrative Services Only (ASO) plan is an alternative funding method to that of a traditional group plan. Unlike a traditional insured health and dental plan, under an ASO arrangement the employer is solely responsible for the cost of health and dental claims. A third party is appointed to administer the plan, in which the employer pays an administration fee to do so.

For routine day-to-day claims, such as health and dental benefits, an ASO arrangement is suitable. Other benefits with potential for much higher claims (i.e. life insurance, long-term disability, accidental death and dismemberment, and catastrophic drug claims) should almost always remain insured under a traditional funding arrangement.

When should an ASO be considered?

An ASO arrangement can be the right fit depending on a company’s risk tolerance and the level of desired customization.

Historically, ASO plans have been accessible only to larger employers, but due to lower administration costs, ASO plans are now offered to smaller employers.

Learn more about setting up an Administrative Services Only arrangement.
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