We have over 70 years of combined industry experience, on both the insurer and broker sides of the industry. We take a forward-looking approach to benefit plan design and claims funding. By using insurer-backed self-insurance, you can significantly reduce the cost of your plan. We also provide an optional HCSA (Health Care Spending Account)/WSA (Wellness Spending Account) that can be accessed with both a web-application and mobile phone applications (iOS and Android), and can be added to any plan, for a company of any size.
Experienced Employee Benefit Specialists
The employee benefits insurance industry has become very specialized over the years. Each insurance company has five or more benefit coverage categories and uses their own metrics to come up with their own cost structure. With changes in legislation, the introduction of new technology, the need for HR liability protection, and changes in taxation, it's easy to see how complex employee benefits can get. This is why it's important to have an employee benefit specialist on your side. Companies often come to us for a benefit plan review and it's very easy for us to tell that the broker who helped the design their plan is not an employee benefit specialist. There are many generalist brokers who choose to make employee benefits a secondary offering, but the problem with that is employee benefits is the largest and most complex type of insurance offering of the three: employee benefits, life insurance, and general insurance.
It's important to enlist an employee benefit specialist firm to help you with your employee benefit plan. We often hear of companies who think they can simply call insurance companies and request a plan quotation, but the reality is, you will always be referred to either an internal direct representative (if you call Alberta Blue Cross) or a preferred employee benefit firm (if you call any other insurance company). And, unless the broker you're referred to has a solid fundamental understanding of employee benefits, and is not a generalist, they will not be able to provide you a quality rate comparison of many insurance companies and you will end up paying a lot more for you plan than you need to.
We Negotiate for the Long-Term Success of Your Business
When you employ an experienced group benefits specialist firm, you know you're getting the best rates possible and you know that those rates will be consistently reasonable year-after-year. Often inexperienced broker will get "low-ball" rates for their client thinking they're saving their client money, but this is a tactic insurance companies use to get business; they offer low rates for the first year, then at the next renewal, they jack up the prices to recover their losses. And, insurance companies will not quote your plan more than once ever 3-4 years. An experienced employee benefit broker understand this, and will negotiate good rates for you that will be consistently reasonable year-over-year.
Why You Should Consider a Partial ASO Plan
ASO (Administrative Services Only) claims funding arrangements, primarily for EHC (Extended Health Care) and Dental claims, has been around for a few decades; however, employee benefit plan insurers have only been offering this option to small to mid-size companies for about the past 10 years. Select insurers will allow an ASO funding arrangement for companies that have no fewer than 20 to 25 employees, depending on their average annual claims amount. There are various reasons for this change: increased competition, reduced risk, improved systems, improved market understanding, flexible pooling and Stop Loss arrangements, etc.
We use ASO to reduce processing, inflation, and risk expenses. We also use ASO to eliminate the ultra-conservative insurer run-off reserves built into traditional group benefit plans. Our application of ASO significantly reduces the EHC and Dental rates by having the company take on a small and easily manageable part of the plan’s claims risk. Insurance remains in place for the potential catastrophic risks like out of Canada travel or high in Canada drug or medical claims.
How We Administer Partial ASO Plans
At HFI Benefits, ASO policies are always through insurers and generally through the same insurer that holds the pooled components of coverage: Life, AD&D, LTD, dependent Life. There are a number of TPA (Third Party Administrator) ASO claims funding arrangements in the marketplace; however, our sense is that they have a difficult time staying competitive with major insurers’ investments in systems development, fraud deterrence, plan administration, and user-interfaces like web applications. In our opinion, the added value of using an established insurer for ASO policies is worth the nominal savings in expenses gained by going with a TPA; especially now that insurer systems accommodate direct claims submissions of paramedical practitioners like massage therapists, chiropractors and physiotherapists, and ancillary benefits like Vision, either at the point of sale or online through the insurer’s website.
With ASO EHC and Dental through an insurer, your employees are able to deal with the same insurer they do on all their other benefits: the same toll free #’s, the same booklet format, the same plan design, the same website access, the same smartphone apps, the same claims payment methods and the same fraud and adjudication controls and protections. We think ASO is a great way to save you money, but we also understand the value insurers bring to the table, which is why we think the sweet-spot is ASO EHC and Dental claims funding through an insurer.
We understand ASO funding arrangements very well and we use them for many of our clients, but they are not without risk and they demand a higher level of advisor expertise and support to help manage. It is not advisable to request ASO funding arrangements from your average broker.
Funding EHC and Dental claims through an insurer based ASO plan is a great way for an employer to get the best of both worlds when it comes to their benefit plan; however, ASO plans do come with higher risk, which is why we recommend you only request them from an experienced group benefits advisory. We have had great empirical success with our ASO funding arrangements, because we deeply understand employee benefits, but we advise you not request an ASO plan from a generalist insurance broker or someone who is not a senior group benefits specialist. An ASO plan design that does not keep claims amounts reasonable could be very costly to your business. Well designed ASO funding arrangements give you lower costs and better rates as they effectively eliminate all the insurers' high margins: premium tax, inflated reserves, inflated trend and the excess risk allowance charges.
Frequently Asked Questions
How much can I save by having our EHC & Dental claims funded through an ASO arrangement?
Depending on plan design, the level of advisory advice that you’re currently receiving and the pooling arrangements (domestic and international), companies can expect to reduce their insured EHC and Dental costs by 7-12% per year.
What’s the risk of going with an ASO Benefit Plan?
With proper catastrophic risk insurance in place for emergency out of Canada and domestic drugs and medical, the primary risk is that a company can no longer ‘walk away’ from an account deficit caused by more claims + expenses being incurred vs deposits submitted over a given year. But we put safeguards in place to ensure it rarely happens and if it does it’s to a nominal extent.