Administrative services only (ASO): what it is and what you still own.
In an ASO arrangement, the employer pays the claims and a carrier or administrator runs the plan: the network, claims processing and member service. It is the most common way a self-funded employer gets a familiar network without becoming a claims shop.
Who does what under ASO.
The Employer Funds the Claims
The plan sponsor pays claims from its own funds. The administrator processes and pays them, then bills or draws on plan funds under the contract.
The Administrator Runs the Work
The ASO provider handles claims adjudication, provider networks, customer service, appeals and reporting, for a fee that is usually per employee per month.
Stop-Loss Sits Alongside
ASO provides administration, not protection. Stop-loss insurance is bought separately, sometimes from the same carrier and sometimes from another.
The Network Can Be a Carrier Network
Carriers that sell insured plans also sell ASO, which lets a self-funded plan use a broad network without building one. That is why ASO is a common first step.
The Employer Stays the Plan Administrator
Under ERISA the employer is generally the named plan administrator and a fiduciary, even when a carrier does the daily work.
ASO Is Not Always Fee-Only
Some ASO contracts include network access fees, claims-based charges or rebates. The contract, not the headline fee, shows the real cost.
What to read before you sign an ASO agreement.
The administrator’s contract controls how money moves and who is accountable.
Fee Structure
Compare the administrative fee, network or access fees, pharmacy and other add-ons, and any charges that rise with claims.
Claims Funding Arrangement
Check how the administrator draws funds: per-claim, weekly or monthly, and what cushions or deposits are required.
Performance Guarantees
Ask for service guarantees on claims accuracy and turnaround time, with remedies if they are missed.
Data and Reporting
You should be able to get your own claims data in usable form. Ask what you will see and how often.
Fiduciary Language
Read how the contract describes the administrator’s discretion over claims decisions and how much of it is delegated.
Termination and Run-Out
Know what happens to claims in process when the contract ends, and what the administrator charges to finish them.
How we handle ASO for you.
Compare Administrators on the Same Terms
We put administrators side by side on fees, networks, guarantees and reporting, not just price.
Negotiate the Contract
We negotiate the ASO agreement, including fee transparency, performance guarantees and data access.
Monitor After Signing
We review service and claims reporting through the year, so the contract is enforced and not forgotten.
Three questions to settle.
What Do We Pay Beyond the Admin Fee?
Ask for every fee in writing, including network access, pharmacy and any claims-based charge.
Who Owns the Claims Data?
The plan should have access to its own data and the right to take it to another administrator.
What Service Guarantees Apply?
Get measurable guarantees with remedies, and ask how often they have been met.
Common Questions About ASO
Is an ASO plan self-funded?
Yes. ASO describes who administers the plan. The employer funds the claims, usually with stop-loss insurance behind it.
Is ASO the same as a TPA?
They overlap. A TPA is an independent administrator. An ASO provider is often a carrier that offers administration to self-funded plans. Both perform administrative services for the plan.
Is CFH an ASO provider or a TPA?
No. We place and manage the arrangement and the vendors behind it. We do not process claims ourselves.
Can an ASO plan use a carrier’s network?
Often yes. Carriers that offer insured products frequently allow self-funded groups to use their network through an ASO contract. Availability depends on the carrier and the group.
Do state insurance mandates apply to an ASO plan?
Generally not, because the plan is self-funded under ERISA. Federal requirements still apply.
What does the employer need to do?
Adopt the plan document, fund claims, monitor the administrator and handle ERISA compliance duties. We help with each of these.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
Laws and rules referenced
29 U.S.C. § 1002(16) — Defines the plan administrator under ERISA.
29 U.S.C. § 1104 — Fiduciary duties in selecting and monitoring service providers.
29 U.S.C. § 1144(b)(2) — Why state insurance mandates do not reach self-funded plans.
This page is general information, not legal, tax or actuarial advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.
An independent employee benefits consulting firm. We look at the entire benefits program: cost, plan performance, risk and administration.
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