Running a successful business, keeping employees happy and attracting new talent can be difficult. For a busy business owner, a big part of your value proposition are the individuals that work at your company.

Employee Benefits are non-cash compensation paid to an employee. There are a number ways to provide an employee benefits plan: Administrative Services Only or Traditional Fully Insured Plan.

To decide what works best, there are 3 main components of a benefit plan you should consider:

1) Insurance for catastrophic claims: this includes life insurance, accidental death and dismemberment, disability, out of country medical emergencies, high cost drug claims and critical illness.

2) Day to day claims: this includes medical, dental, drug and paramedical claims are based on the reimbursement principle. (“Money In and Money Out”)

3) Administration: every plan needs to be managed including maintenance of employee records, billing, claims adjudication, renewal process and employee communication.

In a traditional plan, anticipated increase in claims will be built in to the next year’s renewal rates, however ASO plan costs are based on actual claims experience, therefore if the actual claims exceed the budgeted amount the employer is responsible for the difference and vice versa, if claims are lower, the overage is for the employer to keep.

What about unforeseen high claims costs? Some ASO providers will offer stop loss contracts with insurance protection that begins at $5,000. This is an attractive option for small to medium sized businesses.

Does an Administrative Services Only Plan make sense?

This depends on your needs, we can do an evaluation to analyze your current situation and present strategies and solutions to achieve your goals. Once a decision is made, we implement and will continuously monitor and adjust if necessary.

Next steps…

  • Talk to us about helping put together an employees benefit package that makes smart business sense.