If your clients own a small business, an Administrative Services Only (ASO) health insurance plan can be just the thing to take their companies to the next level. These employee health benefits plans are particularly beneficial for small businesses because they offer many advantages to the business owner that traditional health insurance plans may not.
How does an ASO plan work?
A company pays a monthly deposit that is used to pay for its employees’ predictable dental and extended health care claims which go into a Reserve Account. They also purchase Stop Loss insurance which works in a similar fashion to a deductible for Home and Auto Insurance. Plus, the employer includes pooled benefits like, Life Insurance, Long Term Disability and Critical Illness Insurance. The deposit belongs to the company which means that any funds not used to pay claims can be returned at the end of the plan year or re-invested into the following year’s benefits.
First, the group selects a Stop Loss level – this is their deductible level. Extended health care claims submitted by an employee or family member are paid using the group’s Reserve Account up to the Stop Loss level. Once claims have reached the Stop Loss level, they are paid using the Stop Loss insurance protecting the employer from high cost EHC claims.
One of the main benefits of an ASO plan is that it helps manage costs and create plans that are sustainable. ASO plans are also highly flexible – costs can be planned, managed and budgeted for.
The costs of an ASO plan are based on the actual paid-out claims to employees, not on the anticipated claim, which is how traditional insurance plans usually work. Also, since your client is assuming some risk when taking on an ASO plan, they’ll also be receiving more savings. Stop Loss coverage is also a benefit. It protects companies from paying the cost of “catastrophic health” claims. This benefit comes in handy if claims are higher than expected on any given year.
Here are some statistics to give your clients some perspective on how much they’ll save with an ASO plan:
Administrative fees for conventional health insurance plans typically cost most companies around 25% to 35%. However, an ASO plan only costs around 12% to 20% for the same fees. This is an incredible savings that clients and companies will undoubtedly want to be informed of.
While Traditional Stop Loss deductibles that can range between $10,000 to $15,000 have kept small businesses from benefiting from this type of insurance, Benecaid takes a different approach, one that is inclusive to small- and medium-sized companies. Benecaid provides proprietary “variable” Stop Loss levels, starting as low as $1,000 per certificate.
Benecaid can help combine these savings with the unprecedented ability to customize health benefits, including the ability to specifically tailor coverage and exclusions for a wide variety of your clientele – something companies haven’t been able to do throughout the years with traditional insurance plans.
Still Have Questions?
Still have questions related to ASO health insurance plans? Contact your Advisor or a Benecaid Benefits Consultant at sales@benecaid.com or call us at 416-626-8786.
