HSA & ASO
Traditional insurance programs have worked well for the employee beneifts market place, however depending on a few variables it is possible a traditional plan may not be the best suited for you and your company.
Healthcare Spending Account (HSA) or Administrative Services Only (ASO) plan’s offer a different approach to funding claims and in turn may provide your business a solution that provides flexibility and cost savings.
Administrative Services Only
Simply stated, ASO has no upfront insurance element, the plan sponsor (you) are responsible for the paying all claims, plus an administration fee. However often a plan sponsor would put in a stop-loss provision to protect from larger claims that may and often do arise. For example a stop loss of $10,000 per employee. Any claims beyond $10,000 for each employee would be the responsibility of the insurer from that point forward. This of course comes with it risk and is suited best for larger companies (50 plus) that have the ability to create their own credible risk pool. Having said that, many larger companies still prefer the the traditional method of funding because the risk exposure is to great for them.
Healthcare Spending Account
Healthcare Spending Account ‘s however is on the rise in the smaller employee benefits market. And that is because it provides a great degree of flexibility of how your premium dollars can be used. A Healthcare Spending Account is essentially a bank account (health trust) that is set up for each employee that then can make claims up to a specified maximum, plus administration fees. Often times these work very well coupled with a traditional or pooled insurance program providing the protection and the flexibility everyone is trying to achieve. However, they are also available on a stand alone basis and can be a great stepping stone to introducing employee benefits to your employees.