Administrative Services Only (ASO)
A Strategic Benefit Funding Option
Sometimes getting to DONE, is as easy as a coffee and conversation!
Acts in the manner of traditional insurance, but is self-insured.
Administrative Services Only (ASO) is a type of funding arrangement in group benefits where an employer self-funds their employee benefit plan but contracts with a third-party administrator (usually an insurance company) to handle the administrative aspects of the plan.
In an ASO benefit funding arrangement, the employer assumes all of the risk or liability of claim and the insurance carrier administers the plan and pays claims for a set fee. That is the reason the program is called Administrative Services Only, because the business entity is paying the cost of the claim, plus admin fee on the claim only.
Our mandate
Our mandate is to help provide the best Employee Benefit Program for each company we serve.
When identifying what kind of benefit plan to put in place, there are several options to consider:
- Traditional Benefits: fully insured by the insurance carrier.
- Administrative Services Only (ASO): looks, feels, and acts in the manner of insurance, but it is self-insured with defined benefit options, according to the benefit itself.
- Health Spending Accounts (HSA): self-insured benefits with defined overall maximum and open benefit options for health and dental services. Also commonly referred to as wellness accounts.
- Personal Spending Accounts (PSA): self-insured taxable benefits with a defined maximum and open benefit options outside of the specifics of Health Canada.
- Hybrid: combination of specialty designed benefits options able to meet the needs of all employees with significant cost stability and choice of coverage.
When to consider adding ASO to the Benefit Plan
A good rule of thumb would be, if the benefit plan already includes a maximum, then it is not really insurance. Take vision care for instance, offering vision on a traditional model of $250 every twenty-four months.
To insure this coverage, a customer would pay the insurance carrier against the risk of the claim occurrence based on the number of participants, plus an administrative fee to process, and underwrite the claims as they happen. This administration fee may run anywhere from 15% to 26% of the claim.
Whereby if the corporation decided to self-fund that same risk of claim, they would pay the claim, plus typically 8% to 12% administration to process. Because the final outcome of X number of employees multiplied by $250 every twenty-four months would not create an adverse burden financially to the company, they save significantly on the processing of the same claims and consider this financial model as part of their benefit plan strategy.
How is a Health Spending Account (HSA) different from Administrative Services Only (ASO)?
Where a contract offering administrative services only (ASO) looks, acts, and feels like traditional benefits, a health spending account (HSA) does not.
For instance, a company may elect to self-insure (own the risk of claim) for vision care, and they want the vision care coverage to remain at $200 per person, every twenty-four months, yet they will pay 100 percent of the claim instead of an insurance underwriter; this is ASO.
By contrast, an employer may elect to offer employees $200 in an HSA to use wherever they like, be it additional pharmacy, health services, vision, or dental. Though the company continues to pay 100 percent of the claim, the employee is not restricted on where they can utilize the allotted funds.
Let’s get some “Perspective”
…technology has enhanced the claims-processing timeline, even if the coverage itself has not changed and is often diminished. There are fresher options available, including health spending accounts (HSA) and administrative services only (ASO) for the self-insured. Employee assistance programs (EAP) and critical illness can be added to the menu of available coverage. Still, only about 30 percent of Canadian employers have customized their benefit plans while still toting the benefits as a means to attract and retain employees, all the while not recognizing the change in diversity that has eclipsed the previous workforce that the original idea of benefits catered to.
– Lori Power, Perspective
ASO Key Points
ASO plans are normally recommended for groups where the claim level is predictable (backed by data over the last number of years) and are used mainly for Extended Health Care, Vision and Dental Care benefits.
- 100% control of plan design options
- 100% paid by corporation
- 100% non-taxable to employees
- 100% corporate tax deduction
- 100% claims adjudicated by benefit provider
- 100% corporate control of overall funding
Boost employee performance by integrating the Industrial Athlete mindset.
Trusted By
Thank you for generously sharing your time on Let’s Talk About This SHifT with me on Thursday. I am always in awe of your dedication to your initiatives; from the meticulous planning, you do to the great questions you ask.
I really appreciate you as a person in my life and as a business colleague.
Marnie Kiel
I am posting this recommendation for the services provided by Lori Power/MP Benefits. For the past few years, I have worked hand in hand with Lori to assist us with numerous services, including establishing a health spending account for staff. At no one time has she failed me and she has always been very informative and up to date making her a reliable insurance broker. She is always just a phone call or email away and I think her knowledge and experience is top notch.
When Covid-19 started, it was very overwhelming. However MP Benefits provided us with valuable information and kept us updated regarding benefits, employment issues and various other relevant materials to assist us as we strived to maintain a consistent presence to provide emergency orthodontic care to our patients.
I have had a very good experience with Lori Power/MP Benefits over the years for the services they have rendered to us. I strongly recommend their services.
Dr. Diane Ruud, Orthodontist
There are only a handful of companies that set the bar high as we do in our quest to exceed the service expectations and needs of our clients each day and MP Benefits gets very high marks in both categories. We are fortunate to work with you and look forward to a long and successful relationship.
All the best.
Scott
An employee group plan has been a great benefit for our employees and has helped with a lower staff turnover and job satisfaction. The health spending account model works well for us as a company, because we only spend what our employees use, plus a small administration fee. Our employees like it because they can spend their entire amount in one category such as dental or optical if they need to. Lori always responds quickly to any questions that we have and is good to work with.
Lowell Grasse
Having a health benefit plan shows employees that GreenLink cares about their well-being. In 2007 we decided to go with MP Benefits Inc., and have no regrets. Lori [Power] was able to understand our needs well enough to find solutions to issues and challenges rather than us selling us a product. Lori is always available and provides valuable information on a range of health plans, costs and benefits. Lori was a valuable resource in helping to develop and maintain an effective health wellness program. In today’s competitive marketplace, finding a company like MP Benefits is an essential part of an overall compensation strategy for retaining employees. You want someone who can guide you through changes and be able to plan ahead.
Sonia Prsa, Office Manager
For the past 8 years, our company has used MP Benefits for our employee benefit program. We like the program for a number of reasons. We can customize the program to meet our specific requirements and requests. The program is very flexible. We have the option of carrying forward any unused funds to the next year, increasing the amount in the employees funds as we see fit, and the administration fees are very small as compared to a lot of other insurance providers. This means our money is being spent on our employees. Our employees like the program because it is a ‘health spending account’ verses ‘insurance’. Therefore, it can be a supplemental program to any employee who may have spousal coverage. payment on claims is quick. Any issues that we have had are resolved easily with one call or email to Lori Power.
Annette Kuester
The employees here at Stellar greatly appreciate the package of benefits MP has supplied us with. It makes staff feel good knowing their health care needs are taken care of. Having a plan with great coverage for both individuals and families has been a great bonus for all employees.
We would certainly recommend MP Benefits to other builders, showing them the great coverage plans, communication and due diligence the company offers for their clients.
Hillary Klein, Director of Public Relations, Stellar Homes/Genesis on the Lakes
For over fifteen years (since 2001), Academy of Learning Career College and its affiliated divisions has been nothing but pleased with Ms. Power’s high level of professionalism, customer service, and knowledge and expertise as a benefits provider.
In our experience, Ms. Power has consistently demonstrated that she is an attentive and diligent representative who prides herself on being proactive in her professional approach. As such, Ms. Power makes the effort to regularly meet with Academy of Learning executives and management, in order to ensure that our benefits plan design continuously meets the needs and expectations of our business and employees. Accordingly, Ms. Power pre-emptively researches, analyzes, and provides comparative information on the most up to date products, services and package options. As a result, Academy of Learning always knows where it stands competitively, in relation to what other businesses in the industry are offering potential candidates, and existing employees.
Shelly Ann Berezanski, Human Resources Manager
Lori has been instrumental in assisting our staff with our benefits plan, whether it be over the phone, by email, or when she travels to Yellowknife to host information sessions for our staff each year. I often seek her advice if I need clarification and she has always been able to answer my questions or act on my behalf in a timely manner.
Lori’s skills as a negotiator can definitely be seen in our budget. Most recently, our insurer proposed a 0.9% increase to plan premiums, however through Lori’s exceptionable negotiating skills, we actually received a 1.4% decrease, resulting in a savings of over $20,000 for the year.
Amy Curran, Pay & Benefits Officer
Lori has been our group benefits consultant for approximately 9 years. Our companies are wide in range and diverse. On Lori’s recommendation, about a year ago, we changed group providers to streamline our benefits to all be combined, but individual per division under one policy and provider. It came with some challenges, but with Lori’s guidance and assistance, it was fairly smooth transition.
Lori is very knowledgeable, professional, and passionate about benefits. If her assistance is needed with inquiries or issues, she is always eager to help and responds very quickly.
Shelley Baker, Senior Accountant & Benefits Administrator