Self-insurance – also called administrative services only (ASO) – saves your company money on administrative and inflation costs. In essence, your company takes on low risk claims like Dental & Vision while insuring high risk components like Prescription Drugs and Out of Country Coverage.
On fully insured plans, insurance companies charge high administration fees, anywhere from 25% - 35%. Furthermore, excess premium paid to your carrier which is not used in the form of claims is retained by them, not your company.
Self Insured plans charge a 15% administration fee and no premiums. Instead of premiums, you are charged on a per claim basis with all refunds sent directly to your employees. As claims can fluctuate from month to month, we are able to offer budgeted plans averaging out your annual claims in one monthly payment. Your account is then reconciled quarterly.
Self-insurance generally leads to tremendous savings, especially on your employee health plan. Read our sample spreadsheet to see where you will save.