Self-funded health care, also known as Administrative Services Only (ASO), is a self insurance arrangement in the United States, whereby an employer provides health or disability benefits to employees using the company's own funds.[1] This is different from fully insured plans where the employer contracts an insurance company to cover the employees and dependents.[1]
In self-funded health care, the employer assumes the direct risk for payment of the claims for benefits. The terms of eligibility and covered benefits are set forth in a plan document which includes provisions similar to those found in a typical group health insurance policy. Unless exempted, such plans create rights and obligations under the Employee Retirement Income Security Act of 1974 ("ERISA").