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Choosing the right benefits structure for your business can feel like putting together a puzzle. Between rising health care costs, employee expectations, and your organization’s bottom line, it’s no longer just about picking a plan that checks the boxes. It’s about finding the right fit: something that reflects your values, your team’s needs, and your long-term goals.
If you’ve ever wondered whether an HSA, ASO, or traditional benefits plan makes the most sense, this breakdown is for you.
What’s a Traditional Plan?
This is the most familiar model for most employers. Traditional group benefits plans are fully insured, which means your insurer charges a set premium, takes on the financial risk, and pays claims on behalf of your employees.
Pros:
- Predictable monthly costs
- Minimal admin work for your team
- Access to a wide range of coverage options
Considerations:
- Less flexibility in plan design
- Higher premiums, especially if claims increase
- You pay for the plan whether your team uses it or not
Traditional plans work well for employers who want something straightforward and consistent. However, they can be limiting if you’re looking for more flexibility or long-term cost control. Insurer fees are also higher since the provider is taking on the risk.
What’s an HSA?
A Health Spending Account (HSA) is a pool of funds you set aside for employees to use on eligible medical expenses. It gives your team the freedom to spend those dollars based on their personal needs, including prescription drugs, dental visits, therapy, or vision care.
Pros:
- Budget control, since you decide the amount per employee
- Flexibility and autonomy for employees
- No premiums or claims risk
Considerations:
- Doesn’t cover catastrophic expenses
- Some employees may not view it as “real” insurance
- Usually not a full standalone plan
HSAs are ideal for startups, small teams, or companies with younger workforces who value choice. They can also be a great way to supplement a core benefits plan and offer employees more personalized support.
What’s an ASO?
Administrative Services Only (ASO) plans are a hybrid between a traditional plan and a self-funded model. With an ASO, you fund the claims directly, and your provider administers the plan for a fee. You only pay for what your team uses.
Pros:
- Potential for cost savings if claims are low
- Greater control and visibility into plan usage
- Plan design can be customized to your workforce
Considerations:
- You take on the financial risk
- Costs can fluctuate with claim activity
- Requires a more hands-on approach
ASOs are often a strong fit for larger organizations or those with predictable usage. If you’re seeking more transparency and control, this structure may offer a better long-term strategy.
In fact, in our recent blog on Ozempic’s patent expiry, we touched on how sudden demand for high-cost medications can create challenges for insured and ASO plans. It’s a reminder of why a forward-thinking approach to plan sustainability is more important than ever.
How to Choose the Best Fit for Your Business
Selecting the right plan comes down to a few key questions:
- How much flexibility do your employees want?
- How much risk are you willing to take on?
- Do you want to prioritize predictability, personalization, or protection?
- What does your budget look like today, and what will it need to support in the future?
There’s no wrong answer, but there is a better fit. The right plan balances employee satisfaction with financial sustainability, and it evolves alongside your organization.
Want to Talk It Through?
At Quinn Advisory Group, we specialize in helping businesses across Canada understand their options and choose a path that makes sense. Whether you’re exploring HSAs, thinking about switching to ASO, or reevaluating your traditional insured plan, we’re here to help you make an informed decision.
Reach out to your Quinn advisor or call us toll-free at 1-844-725-3131. Let’s build a benefits strategy that works for your business and your people.
