Silverberg Group - Bringing Your Employee Benefits into Focus

ASO VS Fully Insured (health, dental, vision)

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There are two main ways to fund your health, dental and vision group benefits.

The first is through a traditional Fully Insured plan. Under this plan, the insurer sets a monthly premium which claims can be drawn from. At the end of the year (renewal) the insurer will cover any deficits, or reduce premium if they experienced a surplus. Unfortunately, after trend/inflation, credibility, administration, weighting, etc are factored in, the surplus experienced by the employer is quite often reduced or the deficit experienced by the insurer is increased. These factors also lack transparency, leaving employers wondering why their premiums keep increasing.

Budgeted ASO plans offer employers a greater deal of flexibility. Under this type of plan employees draw their claims directly from the money an employer has invested into their plan and by doing so the employer may be able to save the profit margin that an insurance company adds to it’s premium. Through this type of plan an employer is 100% responsible for any profits or deficits. The main asset of the Budgeted ASO plan, however, is the level of clarity that it provides. This clarity allows employers to know exactly where every dollar of their group benefits fund is being spent and assure them that they have made the right choice for their business.