How do you choose the right insurance plan for your employees?

Choosing the right health insurance plan for your employees can be a difficult decision. There are a few key differences between fully insured and ASO (Administrative Services Only) plans. Typically the choice between the two will depend on the business’s preferences, risk tolerance and specific needs. Careful consideration should be given to the differences before making a decision and this infographic will help you get started.

Fully insured vs. ASO insurance: Which is right for your business?

When offering employee health insurance, two popular choices for employers are:

Fully insured

  • Employer and advisor are responsible for managing the plan to keep claims in check
  • Insurance company assumes the financial risk for the cost of the employees’ medical care
  • Premiums for the year are the same regardless of claims made making it easy to budget for
  • Premiums may increase in subsequent years if the policyholder group has higher-than-expected claims

ASO insurance

  • Employer hires a third-party administrator (TPA) to manage the plan and process claims
  • Employer is responsible for paying the claims out of their own funds and larger claims could exceed budget
  • The employer retains the funds in their own account and only pays IF and WHEN a claim occurs

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