Yes – companies who are looking to go ASO need to be comfortable with ebbs and flows in monthly costs as it pertains to health and dental claims. Claim amounts can fluctuate from month to month so a business that wants to explore implementing an ASO plan should have a comfortable level of cash flow.

No. This is a common misconception in the industry, however, an ASO plan doesn’t carry any more risk than traditionally funded programs. With an ASO program, you will still have a plan design in place that has limitations surrounding what can be claimed and how much – the only difference is that the company is paying the claims directly rather than the insurance carrier reimbursing the claims from premiums paid. Furthermore, companies who choose to go ASO are well established and have had benefits in place for some time. This provides a healthy history of claims experience to look back on which can help to guide an expectation for ongoing costs.

One of the benefits of an ASO model is that your fees and taxes are paid based on the actual claims paid, whereas with traditionally funded plans you pay taxes and fees based on your premiums paid, and the fee percentage is typically lower with ASO than with traditionally funded programs.

An ASO plan also has incredible flexibility when it comes to creating a plan that truly meets the needs of your business and your employees.

In an ASO plan, the employer can enjoy the advantages and savings in a few ways. The first of which is a favourable claims experience. From the perspective of a traditionally funded program, when the claims experience is better than anticipated, those savings are profit for the insurance company. In an ASO model, a favourable claims experience is realized in cost savings for the company.

Additionally, because the administrative fees of an ASO plan come at a lower cost than a traditionally funded model, the company will experience cost savings in this area as well.