Many clients have a hard time determining whether a budgeted ASO or a fully insured traditional plan is right for them. Below are some helpful tips to help you guide them towards making the decision that best suits their needs.
What’s included in your monthly payment
Budgeted ASO:
1. Insurance for Catastrophic Risk
2. Actual Paid Claims
3. Third-Party Administrator (TPA) Fees
Fully Insured:
1. Insurance for Catastrophic Risk
2. Anticipated Claims
3. Insurer Reserves
4. Insurer Administration Fees
If claims are lower than predicted
Budgeted ASO: Excess deposits are eligible to be returned to the employer (plan sponsor)
Fully Insured: Insurer keeps the excess premium
If claims are higher than predicted
Budgeted ASO: Mid-year plan adjustments can be made to mitigate large renewal increases at the end of year
Fully Insured: Insurer absorbs the short-fall during the plan year. Premiums and Reserves are increased at renewal
Typical Administration Fee for Small Businesses
Budgeted ASO: 15%-20%
Fully Insured: 25%-35%
ASO might be the right choice if your client is looking for…
– Lower administration fees
– Customized, flexible plans
– A long-term approach to benefit plan costs and budgeting
– Detailed reporting and transparency into claims cost
– Control of their health care spending
– Possibility of having unused funds returned
To find out more about our budgeted ASO plans and our unique Stop Loss offering, click here to download our Stop Loss brochure, and contact your Executive Benefits Consultant or email us at advisors@benecaid.com.
