Administrative services only (ASO) is an arrangement an employer makes with a third party to administer the employer’s health insurance benefits to its workers, family members, and retirees. Employers often use ASO arrangements because they are self-insured, meaning they assume the financial risk of providing health insurance benefits to workers. When they are self-insured, they do not need to contract with a health insurer to provide health insurance to their workers. Many self-insured employers use health insurers as third-party administrators (TPAs) in ASO arrangements to process claims and make payments and let the employers’ workers, families, and retirees use the insurers’ physician and hospital networks.
