Administrative Services Only (ASO) is an arrangement where an employer outsources the administration of employee benefits, such as health plans, to a third-party provider while retaining financial risk.
- What does Administrative Services Only (ASO) mean?
Answer: It means an employer outsources benefits administration to a third party while self-funding the plan. - What are the benefits of an ASO arrangement?
Answer: It offers cost control, flexibility in plan design, and access to professional administration services. - Who bears the financial risk in an ASO model?
Answer: The employer bears the financial risk, as they self-insure the benefits. - What services are typically included in ASO?
Answer: Services include claims processing, customer service, and reporting on benefit usage. - How does ASO differ from a fully insured plan?
Answer: In ASO, the employer retains financial risk, while a fully insured plan transfers risk to an insurance carrier.
