Budgeted ASO vs. Traditional Group
Health Insurance

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Whether you are a start-up company looking at group health insurance for your employees or an established one that is looking to make a change, one of the tasks you could face is deciding between traditional group health insurance or a Budgeted ASO plan. There are several differences that you should understand. Although a few will be touched on in this article, your best course of action is to work with an independent agency with access to various insurance carriers and products.

Budgeted ASO vs. Traditional Group Health Insurance

One difference between the two is the administrative fees. Generally speaking, a Budgeted ASO is going to have a lower fee (15% to 20%) than a traditional group health insurance plan (25% to 35%). Risk is another thing to consider. With a traditional plan, your company has no immediate exposure should claims exceed estimates. With a Budgeted ASO, you’ll need to pay for the deficits upon renewal, although the loss can be capped by stop loss insurance. On the flip side, if claims are lower, you have no benefit with group health insurance, but you would keep the surplus in a Budgeted ASO.

There are a couple of benefits of Budgeted ASO plans to know about. The first is that your plan can be designed strategically for your company, whereas a traditional plan is a one-size-fits-all situation. In addition, your plan can be customized to get optimal tax advantages, which is not possible for a traditional plan.

If you would like to know more about a Budgeted ASO plan or a traditional group health insurance plan, reach out to us at Elite Benefits Group in Monroe, North Carolina. We will be happy to get into the details and assist you with selecting the best coverage for your company.