Traditional group insurance plans might look attractive on the surface, but the numbers rarely tell the full story. For business owners with a long-term outlook, an Administrative Services Only (ASO) plan offers something better than price, it offers value. Not just lower costs over time, but control, transparency, and a benefits strategy that reflects a company’s risk tolerance, business philosophy, and goals.
Let’s explore why ASO funding is becoming the smarter choice for business leaders who don’t want to feel like they’re gambling with their benefit dollars.
From Chasing Price to Investing in Value
A common hot button for employers is the feeling of overpaying for minimal return. It’s not just a perception. Traditional fully-insured group benefit plans are built on anticipated claims, padded with reserves and risk charges that often exceed actual usage. Insurance companies rely on this model to maintain profitability.
ASO plans change the game by focusing on actual claims. Over five years, ASO plans almost always outperform fully-insured models financially. Business owners who understand this shift no longer chase the lowest annual premium. Instead, they focus on long-term value and predictable outcomes rather than surprise renewals.
At The Benefits Trust, we’ve seen firsthand how ASO funding delivers measurable results. In one recent example, a client saved 14.9 percent annually compared to their traditional funding model, while gaining full transparency and greater control over how every benefit dollar was spent.
Understanding Risk Tolerance Leads to Smarter Planning
Risk tolerance is personal. Some clients prefer predictability, similar to those who arrive at the airport hours early. Others are comfortable cutting it close to maximize efficiency. Benefits advisors must uncover these nuances to develop group benefit strategies that reflect business reality.
Just like individuals set car insurance deductibles based on their comfort with risk, business owners must determine which benefit expenses they can manage directly and which should be pooled as insurance.
The fundamental role of insurance is to cover catastrophic, sudden, and unexpected events. Routine costs, like dental visits or chiropractic appointments, don’t meet that threshold. ASO plans give employers the ability to insure the unpredictable while budgeting appropriately for the expected.
Clarity and Confidence Through Monthly Reporting
Renewals in traditional insurance models are often met with confusion. Acronyms and terms like “incurred but not reported” only deepen the disconnect. Monthly financial reporting, a core feature of ASO, replaces guesswork with clarity.
The Benefits Trust provides clients and their advisors with simple financial reports that include current contributions, claims paid, and operational costs. This continuous feedback removes surprises at renewal time and builds long-term stability. In one notable case, a 500-life renewal meeting took just 30 seconds because the client already understood their numbers.
Building Plans That Reflect Your Business
ASO plans offer unmatched flexibility. Employers are no longer locked into standardized packages that don’t reflect how their teams actually work. With ASO, plan design becomes a strategic exercise.
Employers can implement executive healthcare spending accounts, create hybrid models that mix defined contribution and defined benefit elements, and even design multiple plan tiers within the same organization. These are practical tools that align benefits with specific goals and workforce needs.
Proven Results from Real Businesses
Through leveraging The Benefits Trust, advisors have supported a wide range of organizations in making the switch to ASO, and the outcomes speak for themselves.
One client with 32 employees reduced their annual benefit spend by more than $23,000.
Another, a 69-employee group, chose ASO not for immediate savings, but for the transparency and control it offered, a decision that aligned perfectly with the owner’s long-term vision.
In a third case, a fast-growing company used our claims-based budgeting and regular reporting to fine-tune their contributions over three years. Each of these organizations gained a benefits solution that made stronger financial and operational sense.
Advisors Add the Most Value by Asking Better Questions
The best advisors don’t just quote rates. They ask strategic questions about a company’s long-term vision, employee composition, and risk philosophy. These future-based conversations help uncover what clients value most in their benefits offering.
With ASO, business owners are empowered to make choices based on data, not assumptions. The plan becomes a promise, built around transparency, control, and tailored design.
The Bottom Line
ASO plans reflect actual claims, not predictions padded with risk charges. They offer financial transparency through monthly reports, simplify the renewal process, and give employers the flexibility to design benefits that match their business. Advisors who take time to understand client goals and risk tolerance can use ASO as a tool to deliver lasting value.
Talk to Us About the Right Benefits Strategy
Ready to stop chasing price and start building long-term value into your benefits plan?
Reach out to our team today to explore how an ASO plan could support your company’s goals and your people. Let’s find a better way forward, together.
