The Health and Dental component is based on the principle of “Money-in, Money-Out”. For routine health and dental claims, funding on a Budgeted ASO basis is simple and transparent. Stop Loss Insurance is specifically designed to limit potential exposure to catastrophic health care claims. These benefits operate on a reimbursement principle rather than requiring traditional risk insurance.īoth Traditional and Budgeted ASO plans use insurance to protect against risk. These include Health and Dental Care benefits.
These include Life Insurance, Accidental Death & Dismemberment, Long Term Disability, Out of Country Emergency, and Critical Illness.Įffectively handle every-day high frequency/low cost transactions. Insurance protects against catastrophic, sudden and unexpected low frequency/high cost events. However, the question every business owners asks is: Compared to traditional group benefits insurance, is Budgeted ASO the most effective method to fund my group benefits plan? To answer this question, we must understand the two components to every benefits plan – Insurance & Administration: Through a Budgeted ASO contract, a small enterprise can work with a Third Party Administrator (TPA) to build a plan tailored to their business objectives while putting controls on cost. Weary of escalating premium costs, rigid options and a lack of transparency, smart entrepreneurial employers are moving away from traditional group benefits plans and adopting Budgeted Administrative Services Only (ASO) Plans to control costs and improve retention of key employees. However, having an acceptable solution is not the same as having the best solution strategically designed for your business and your employee population. Many employers regard their benefits plan as “good enough” for their purposes.
A group benefits plan is a promise made by an employer to their employees.
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