Administrative services only (ASO)

Administrative services only (ASO),

Definition of Administrative services only (ASO):

  1. A benefits plan structure in which the employer funds the plan and assumes financial responsibility for all of the claims and liabilities made against it. In most cases, the employer hires a third party to administer the plan and process claims and payments. ASO arrangements are common in large corporations that can achieve greater efficiencies through self funding of benefits.

  2. Administrative services only (ASO) refers to an agreement that companies use when they fund their employee benefit plan but hire an outside vendor to administrate it. For example, an organization may hire an insurance company to evaluate and process claims under its employee health plan while maintaining the responsibility of paying the claims itself. An ASO arrangement contrasts with a company that purchases health insurance for its employees from an external provider.

  3. ASO arrangements are common in Canadian health plans. Plan specifics vary depending on the agreement a company establishes with insurance companies and third-party administrators (TPA). In ASO arrangements, the insurance company provides little to no insurance protection, which is in contrast to a fully insured plan sold to the employer.

How to use Administrative services only (ASO) in a sentence?

  1. ASO-based, self-funded benefit plans are common among large firms because they can spread the risk of costly claims over a large number of workers and dependents.
  2. Because employers with an ASO take full responsibility for claims made to the plan, many also establish stop-loss arrangements.
  3. ASOs were designed for larger companies that prefer to outsource payroll, workers' compensation, health benefits, and human resources functions, but also want to fund their own health plan. .

Meaning of Administrative services only (ASO) & Administrative services only (ASO) Definition