Administrative Services Only

What Does Administrative Services Only Mean?

Administrative Services Only (ASO) is a program established by employers to provide benefits, such as health coverage or retirement plans, to their employees. Under an ASO arrangement, the employer directly finances the benefit plan and pays for claims, rather than relying on a third party, such as an insurance company, to do so.

Insuranceopedia Explains Administrative Services Only

While an ASO plan is funded by the employer, a third party may be responsible for overseeing and administering insurance transactions, such as processing claims. However, the employer remains responsible for paying the claims.

Employers who utilize an Administrative Services Only system typically purchase stop-loss insurance, which ensures that another insurer will cover claims if they exceed the maximum amount the employer has set for employee coverage.