What is Administrative Services Only ?
‘Administrative Services Only’ is the practice of hiring another company to provide administrative services for employee benefits while providing the benefits themselves. In such a business agreement, the vendor company simply provides the services and not the benefit itself.
For the company providing the benefits, this provides the advantages of better cash flow, lower costs, and flexibility in designing the term plans.
This business practice usually takes place for the employees’ health benefits. The initial company is liable for paying premiums, assuming risk, and maintaining statutory compliance in this scenario.
