If you are asked to research material related to finding a third party administrator or TPA for your company, there are several things you need to keep in mind. As an employer, which things are most important for your company to evaluate?
A TPA is not just a single person but is an entire company that you will need to trust with your money, cooperate with on a daily basis and form a partnership that goes on for many years. Your main contact with the company should be personable and should help to establish a solid relationship with the TPA. You need to match your specific needs with what they are offering you in terms of services.
Cost is important. Can the TPS help you lower claims costs and administrative fees? TPAs traditionally can reduce your claims costs and can develop a good plan design that works for you. Their administrative costs should be less than that of a regular insurance company and this should save you some money. TPAs can also be cheaper than self-administering your own plan. You should look over their fee schedule carefully to make sure they end up cheaper than other options.
Remember that TPAs belong to a service industry so that what you want should be what they deliver, no questions asked. Make sure the TPA is flexible around your needs and not the other way around. You should have a close, personal relationship with your TPA’s contact people so that, if issues arise, they get solved as a team. They should be able to research your questions and get back to you within minutes.
Remember that if the TPA breaks the law, it can reflect on you and you can be personally liable. New regulations are made regarding employee benefit plans all the time. It is up to your TPA to be knowledgeable about any legal changes that can affect the way you and the TPA do business. Make sure they have a legal team or at least legal representation to handle any regulatory issues that might come up. Ask them how they stay up to date on all the regulatory changes and how they stay compliant with the government.
Find out about their hardware and software capabilities and whether or not they have staff to handle this sort of thing. How fast are claims made? Do they have a high error rate in doing claims? The TPA should be able to walk you through the entire process of getting claims and processing them. Meet with the employees of the TPA who do these things and see if they are knowledgeable and competent.
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