More and more employers are using Administrative Services Only (ASO) plans for such health benefit as Dental Insurance.
Under an ASO, the employer self-insures the benefits it pays, but uses an outside firm (such as an insurance company or third-party administrator) to process claims and pay providers, based on a fee per person. This approach reduces costs significantly by eliminating the risk charge and premium taxes associated with fully insured benefits.
What’s more, an ASO offers more flexibility than conventional dental plans; you can customize your plan, because it’s a self-insured contract outside the jurisdiction of state insurance regulators.
The downside: unlike Health insurance, which has lifetime maximums, dental plans are limited to an annual maximum payment, usually $1,000. In the first few years that a small business or group offers Dental insurance, claim payments are usually high before they settle down to the point that few group members will hit the maximum. This is the time to look into an ASO.
Many insurance companies will write ASOs only for businesses with 100 or more workers However, our agency’s Employee Benefits specialist shave developed relationships with carriers that will offer coverage for ASOs for groups as small as 25 members. If you have at least 25 employees in your Dental insurance plan and have been insured for three to five years, you should be a perfect candidate for an ASO.
For more information, please feel free to get in touch with us at any time.