The purpose of an Administrative Services Only (ASO) plan is to reduce the high administration costs charged by an insurance company.
Under this arrangement, an employer provides benefits to plan members on a self-insured basis. No premium is paid to the insurer for ASO benefits. The employer only pays for the actual claims incurred by plan members, plus an administration fee.
The ASO arrangement is best suited for benefits such as Extended Health Care and Dental, since claims for these benefits are predictable, short-term, and generally not catastrophic.
Stop Loss Insurance
To mitigate the impact of unexpectedly high claims under a self-insured plan, MDM offers Stop Loss Insurance.
Once claims for an individual or family have reached a certain amount, the cost for any further claims during the policy year transfers from the employer to the insurer.
The MDM per individual or per family Stop Loss Benefit can be designed in two different ways:
We offer flexible Stop Loss benefit amounts, starting at $500.
The average industry fees range from 7 - 12% of paid claims. Some companies will charge an additional set-up fee.
MDMs fees are typically 5% of paid claims, depending on the method of administration and plan design.
Contact us to find out if an ASO Plan is suitable for your company.