Administrative Services Only (ASO)
What is Administrative Services Only (ASO)?
Administrative services only (ASO) is a term that may refer to a type of insurance arrangement. In an ASO plan, the insurer provides administrative services only and does not assume any risk for the insurance coverage.
Administrative Services Only (ASO) in More Detail
An ASO plan is an agreement between an employer and an insurance carrier, whereby the employer pays for the insurance coverage and the insurance company provides the administrative services. The employer is responsible for deciding which services to include in their plan, and the insurance company is responsible for processing and paying claims.
The employer is the primary party responsible for managing the risk associated with providing insurance coverage for their employees. The employer is usually responsible for setting the premium rates, determining the coverage levels, and managing the claims processing.
The insurance company’s role in an ASO plan is to provide the administrative services associated with providing insurance coverage. This includes processing and paying claims, collecting premiums, and customer service.
The advantage of an ASO plan is that it allows employers to maintain control over their insurance coverage. Employers are able to set the premium rates and coverage levels and have more control over the claims processing. Additionally, ASO plans often provide more cost-effective insurance coverage than traditional insurance plans.
Overall, Administrative services only (ASO) is an insurance arrangement in which the insurance carrier provides administrative services only and does not assume any risk for the insurance coverage. The employer is responsible for deciding which services to include in their plan and is the primary party responsible for managing the risk associated with providing insurance coverage. The insurance company’s role is to provide the administrative services associated with providing insurance coverage.
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