More than 97 million people are covered by administrative services only (ASO) agreements with health insurance companies (as of June 2012), compared to 84 million who are covered by commercial fully insured risk arrangements, according to a study by Mark Farrah Associates.
ASO enrollment increased nearly 5% from June 2011 to June 2012. Enrollment in commercial fully insured products declined 0.4% during the same period. Driving these trends are health care reform, the economy, and the fact that ASO options that have become more readily available for small to mid-size employers. However, defined contribution health plans may affect the overall outlook for Third Party Administrator (TPA) and ASO business.
Health insurance carriers and their subsidiaries provide most of the administrative services for enrollment covered under TPA agreements for health benefits. ASO business is expected to continue to rise through 2013. But, this may change in 2014, if a large number of employers pursue defined contribution health plan options, if the costs of reinsurance and stop-loss coverage rise, or if state and local government regulations change regarding self-insured business. For more information, visitwww.markfarrah.com.
