Administrative Services Only saves your company money, gives you more control over your benefit plan and stabilizes your annual costs.
You will no longer be saddled with inconsistent renewal increases. With ASO, you make the rules. You control your options, risks, and costs.
ASO is a different way to provide Health, Dental and Short Term Disability benefits to your employees. It’s often called a ‘self-funded’ plan because the employer provides the funding for these benefits. Maximum Benefit can adjudicate your self-funded claims and consolidate all your benefits: one plan, one billing.
So then the employer takes on all the risk?
Yes and No. Health, Dental, and Short-Term Disability benefit claims are typically high in frequency but low in cost, meaning that spending patterns from past experience can allow future costs to be successfully predicted.
Even though there is minimal risk involved for these benefits, there is still the chance of unexpected and catastrophic health claims occurring, which is why health plan designs are paired with Stop Loss insurance. Stop Loss insurance covers all expenses over a predetermined threshold. If your threshold is $7,500, for example, all annual costs over that limit will be paid by your Stop Loss insurance, capping your risk at that level.
What are the advantages of ASO?
Under an ASO plan the employer controls their cash flow and only pays for claims WHEN they occur.
With a fully insured plan, a portion of the premiums held by the insurance company funds reserves for future claims – whether these claims occur or not. Under an ASO plan the employer maintains and controls these reserves, allowing these monies to work for the employer, not the insurer.
Because you are only paying claims plus expenses, benefits will always cost less under an ASO plan. This is because you are not paying for profit, risk charges, trend factors and reserve charges in addition to the insurance coverage.
ASO plans can help your company realize cost savings, improved cash flow and plan flexibility. Monthly budgeting and reporting also allow your firm to better manage and control the costs of your plan. Bottom line - cost stability. Switch to an ASO plan with Maximum Benefit and take control of your employee benefit program. Speak with a Maximum Benefit advisor to learn more.