A question many business owners asks is: Compared to traditional group benefits insurance, is a Budgeted Administrative Services Only Plan (ASO Plan) the most effective method to fund my group benefits?
To answer this question, we must understand the two components to every benefits plan:
1. Insurance
Insurance will protect against catastrophic, sudden and unexpected low frequency/high cost events, such as Life Insurance, Accidental Death & Dismemberment, Long Term Disability, Out of Country Emergency, and Critical Illness.
2. Administration Services
Administrative Services will expertly handle the day-to-day high frequency/low cost transactions, which include Health and Dental Care benefits. These benefits will operate on a reimbursement principle rather than requiring traditional risk insurance.
Important Key Points Include:
- Both Traditional and Budgeted ASO plans use insurance to protect against risk.
- The Health and Dental component is based on the principle of ‘Money-in, Money-Out’.
- With Budgeted ASO, you pay a fixed amount every month based on your previous claims history.
- Business owners need to fully understand their benefits costs as they arise.
Read the full details on ASO Plans
The chart below will explain the differences in greater detail.
(Click to Expand)
