Administrative Services Only(ASO)

Meaning & Definition

The Administrative Services Only (ASO Model) is a healthcare benefit parameter under which an employer makes direct payment for employee health care expenses but utilises an outside company to handle administration related to employee health care benefits. The ASO Model allows the employer to outsource their health benefit administration to a third-party administrative services company while retaining the liability for medical claims. Most large companies use the ASO Model.

Important aspects of Administrative Services Only:

• More control for Employers Over Costs of Healthcare.
• Lower Premium Cost vs. Fully Insured Plans.
• Allows Employers Access to Experts for Claims Administration with Only Partial Outsourcing Needed.
• Increased Flexibility for the Design and Coverage of Benefits.
• Increased Transparency into the Way that Healthcare is Spent and Used.

Compliance & Policy Considerations:

Health benefit regulations governing ASOs, which are primarily used by self-funded employers, are established on a national basis and vary from country to country and by area of regulation.

The employer must make certain that:

• Benefit term documentation is maintained adequately.
• Claims are settled in a timely manner.
• Employee data is protected through data privacy and security practices.

Employers should implement ASOs based on their internal policies, along with the requirements outlined by regulatory bodies. For more info, visit: Payroll Software