Self Insurance Plans
I want to self insure my plan.
Why ASO?
(Administrative Services Only)
Policyholders Surplus
The employer only pays the pure cost to have the benefit plan adjudicated, and potentially insure whatever risk they choose. The margin or reserve of insurance company is removed.
No Hidden Costs
Since there are no risk charges, the benefit plan is fully funded with the policyholder's contributions, the policyholder is completely aware of how their money is being used.
Reserve Ownership
Unlike with a retention or fully insured option of underwriting the benefit plan, under ASO the policyholder would own any reserve established.
Flexibility
Since the ASO provider is adjudicating the plan design based on the direction of the policyholder, the policyholder would have the discretion to request special handling of claim situation and benefit structure. Policyholders are also given more freedom as to whom they want covered and when (i.e. retirees, consultants, etc.).
Administration
Unlike self-insured plans or cost-plus benefits, an ASO plan is administered with the same standards and technology that is afforded to insured plans. Maintenance of records, additions and deletions, plan maximums, and claims payment are all provided by the ASO provider. This ensures that CCRA and privacy legislation are adhered to.
Catastrophic Risk
Since there is some coverage that could not be 'self-insured' effectively, like travel and blockbuster drug claims, Stop-Loss insurance is available to insure the specific risk that you determine is beyond your risk tolerance. Once a Stop-Loss level is reached, the policyholder does not directly bare any of the claims beyond the Stop-Loss point. For example, Stop-Loss coverage can be implemented to insure claims over a specific level per member ($5,000, $10,000 etc) or over a total aggregate amount (110%, 150% etc.).
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