With health care budgets constrained, companies that want to provide employees with quality dental benefits are discovering an attractive option – Administrative Services Only (ASO) insurance plans. Under an ASO arrangement, an employer self-insures for the benefits it pays out, but uses an outside company to deal with the nuts and bolts of handling claims and paying providers.
One main reason employers choose to go the ASO route is the potential to reduce dental coverage costs by eliminating the need to buy insurance. There are other advantages. A firm is free to customize the dental plan it offers its workers under an ASO. That’s because these self-insured contracts are generally outside the jurisdiction of state insurance regulators.
Self-insured ASO plans are especially appealing to employers with 500 to 5,000 lives because the level of annual claims is fairly predictable. With an ASO a firm is only responsible for paying a claims-processing fee to the administrator, bypassing the risk charge and premium taxes associated with fully insured benefits.
Sophisticated claims system
The Guardian Life Insurance Company of America’s cumulative knowledge and experience with these plans has made it No. 1 in new ASO business cases sold for six out of the past seven years.* “As ASO administrator, we offer the same sophisticated claims system whether a dental plan is fully insured by Guardian or it’s a self-funded ASO company plan,” says Chris Swanker, VP of Guardian Group Dental.
ASO clients gain access to Guardian’s extensive Preferred Provider (PPO) network and leading-edge back-office technologies. “There is no difference in how we administer the benefits or pay claims,” he declares. We treat the ASO customer’s money as if it were our own.”
Reviewing the strength of an ASO carrier’s dental network is also important. Guardian’s DentalGuard Preferred provider network has more than 70,000 dentists at more than 128,000 locations throughout the country. Such breadth permits Guardian to provide dental care discounts of up to 30% below what dentists ordinarily charge.
By having so many dentists in the Guardian PPO network “we can save the employer money for self-funded plans, and we can offer a more competitively priced product on our fully-insured plans,” Swanker observes.
Guardian also offers a unique guarantee to self-insuring employers, a point that brokers should emphasize. Guardian’s pledge is that the combination of our PPO network and automated Dental Review Logic (DRL) program will save companies an amount equal to their annual ASO fee. DRL is a sophisticated claims-processing system that detects unbundling, upcoding and other billing issues. For example, if a cavity is filled and local anesthesia is used, separate bills are sometimes submitted for each procedure. DRL combines the two, resulting in claims savings.
Response time is another factor companies should consider when selecting an ASO carrier. At Guardian, turnaround time for claims submitted is usually three days for either an insured dental plan or an ASO plan. “Our claims approvers do not know if a claim is from a fully insured plan or one in which we are only doing the administration,” notes Lloyd Tereno, second vice president of Guardian Dental Claims.
Guardian is known for its innovative, flexible menu of dental features that also add value – and these are all available on ASO plans as well. Maximum Rollover, for example, lets members store unused annual benefits for later use. The ability to tap what has been rolled over comes in handy if an employee’s benefits exceed the annual maximum at some point in the future. Another feature called Preventive Advantage allows members to obtain preventive care without subtracting the cost from their annual maximum. This frees up money for more extensive dental work.
Maximize choice, minimize cost
For employers, Guardian offers several ASO funding choices to dovetail with an employer group’s financial needs and billing preferences. A direct bill option helps a company manage its cash flow. Guardian pays claims as received and bills an ASO client at the end of month, along with the administrative fee.
With its comprehensive and innovative portfolio of dental plans that helps maximize choice and minimize costs, Guardian has earned a top reputation for servicing the needs of small companies. But midsize employer groups with 500 to 5,000 lives increasingly are finding that Guardian can address their dental coverage requirements with the same broad range of cost-effective options. Dental ASO is a great example of this.
“Guardian understands the needs of employers and their employees and offers options to match anyone’s target price point,” Swanker concludes. “And all of our products and services are available and useful for the entire spectrum of employers.”
* (Listed companies, LIMRA/NADP 2003-2009)
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