What is the term for an arrangement where an organization manages the administration of claims for a self-insured group?

An Administrative-services-only (ASO) plan is an arrangement where an organization, often an insurance company or third-party administrator, manages the administration of claims and related services for a self-insured group. In this setup, the business or group retains the financial risk associated with its claims but outsources the administrative tasks, such as processing claims and managing benefits, to a separate entity. This allows the self-insured group to maintain control over its funds while leveraging the expertise of the administrator to handle the complexities of claims management efficiently.

The other terms do not accurately describe this specific arrangement:

• An agency typically refers to an entity that sells insurance products on behalf of an insurer, rather than managing self-insured claims.

• Adverse selection is a concept related to the insurance market, where those most at risk are more likely to purchase insurance, impacting the insurer's risk pool, but it doesn’t pertain to claims administration.

• An admitted insurer is an insurance company granted permission by state regulators to do business in that state. This term does not relate to the management of self-insured claims.

The ASO plan is particularly beneficial for organizations looking to self-insure while still having access to professional claim administration services, making it a popular choice among larger employers