ASO what?

Healthcare is full of acronyms that can confuse the most seasoned health care professional. ACA, CMS, PCP, HMO, PPO, QHP, CHIA. The list goes on. An acronym that's not new but that you may be hearing more of is “ASO."

What is an ASO plan? We're glad you asked.

ASO stands for Administrative Services Only. An ASO, or "self-funded," health plan is an arrangement where an employer takes on the financial risk for health expenses covered by their health plan. The employer has the flexibility to define the benefits that are covered for their employees and their dependents. As the name implies, the health insurance company provides administrative services such as claims processing and customer service.

How do ASO plans reduce costs?

Most employers that opt for ASO plans want to customize their benefit plans to meet the needs of their employees. They select the administrator (health plan) that can offer the best customer service, price, program offerings, and extensive provider network in support of where the employees live and work. The employer has the flexibility to define the benefits that are covered for their employees and their dependents.

ASOs have been gaining popularity in recent years. Because the employer can customize benefit designs, they can offer high-quality benefits to their employees with lower premiums. In contrast, premiums for fully insured plans tend to be higher because the insurance carrier designs the benefit coverage and is taking on all the financial risk for the claims incurred.

ASO plans also allow employers to offer benefits that are relevant to their employee population. For example, a moving company might offer enhanced physical therapy care to help their employees manage back pain.

How do self-insured plans impact my practice?

With the number of customized plans being offered, it’s important more than ever to remember to always verify eligibility and benefit coverage for your patients before the service.