By Kate Ranta on Dec 9, 2020 11:00:00 AM
With so many plan designs available for health insurance and ancillary benefits, some brokers may be wondering about administrative services only, better known as ASO or self-funded healthcare services. What does ASO mean? And what's the benefit?
Well, ASO is a group program for employers where the employer funds its own employee benefits plans and purchases only administrative services from the insurer. These services can include:
- Preparation of an administration manual
- Communications with employees
- Determination and payment of benefits
- Preparation of reports
- Preparation of summary plan descriptions
There are many benefits of ASOs--and reasons why brokers should include it in their sales portfolio. These programs are a great way for many third party administrators (TPAs) to monitor, and in some cases cut, costs. Employers who are in a low-risk job category (for example, an employer who employs nothing but office workers or remote workers) may find that going ASO is more affordable, and suitable to their needs, than a traditional insurance provider.
Under certain rules, tax credits can be granted to employers running self-funded programs. This is a great incentive for a smaller business. Because of the transparent nature of an ASO, many employers are offering this as a viable option for their employees, regardless of the benefits of the more traditional insurance plans.
In addition, ASOs offer access to national PPO networks, plan flexibility (which is perfect for offices who have multi-generational staff—not everyone's medical needs are the same, so their coverage needs are different), and overall cost savings.
Finally, but no less importantly, ASOs can also allow for prescription drug cards, stringent claim adjudication, and employer/employee cost of sharing, and access to value-added benefits through your chosen TPA - all of which can save employers and their employees money.
Adding ASO into your sales portfolio can open up additional options to your clients, allowing more flexibility and increased choice. So start selling it today! And if you're looking to increase your marketing efforts and attract new clients - check out our FREE digital marketing guide below!