Administrative Services Only (ASO) and Thirty-Party Administration (TPA)
For many years, the employee benefit options of ASO and TPA were only available to businesses with 500 or more employees. Today, with my partners Health Source Plus and The Benefits Trust, we are able to offer smaller employers this alternative and often better solution.
The benefits to this approach can significantly reduce the high overhead costs of traditional employee benefits.
How It Works
With a traditional insurance company employee benefits plan, it is not uncommon today for many employers to be paying as much as 40% in administration fees, risk fees, marketing costs, and surplus charges. Using an independent company to provide claims administration and stop-loss insurance to offset any catastrophic claims can substantially reduce overhead costs, often by up to 50%.
In this arrangement, we still work with traditional insurance companies to provide pooled insurance (life insurance, accidental death and dismemberment insurance, and long-term disability insurance). As the employer, you self-insure the health and dental care part of the plan along with stop-loss insurance to offset any potential catastrophic claims.
This arrangement is far more transparent. Unlike a traditional insurance employee benefits plan, if at the end of the year you have a surplus, it does not stay with the insurer but is returned to you.