TPA's in the group employee benefits insurance industry are the providers of claims payments and administrative services associated with a benefits plan. The Third Party Admin does not assume the actuarial risk of the claims activity. TPA's perform their duties as an outsourced vendor. The risk of the plan is assumed by the company(s) who have implemented the plan(s). State insurance laws regulate and require TPA's to be licensed.

Are all TPA's the same?
No many TPA's offer additional features and unique benefits. These may include Employee Assistance Plans (EAP's) built into their service. Leased network discounts for health, dental, and vision coverage's for example. In addition some TPA's specialize in customer service with many live representatives, and/or up to date technology and software to improve administrative duties and efficiency.

Many HR directors find out from experience that a TPA is much more then a check writing service and the right relationship is based on meeting a businesses specific need. Contact us or request a quote below for our TPA recommendations for your employee benefit needs.

Third Party Administration Costs
TPA's bill by employee head count. The cost of as admin service would be displayed as $1.00 per ee per month. So a business with 50 employees would pay $50 a month for the TPA's service. Prices vary based on services and competition but are typically in the $1 per ee per month range for basic service. Larger groups typically will have lower costs per employee.

What is ASO?
ASO stands for Administrative Services Only. Many insurance carriers offer ASO plans. ASO is requested via an RFP just like traditional benefit requests. A policy acts just like a "normal" plan with one exception the insurance company does not pay the claims. It is up to the group to pay the claims. The insurance company is providing their resources - Network, Administration, Cards, Customer Service, web capabilities... But not paying the claims. The ASO rate is displayed per employee for example $2.25 per employee per month. The ASO rate is paid monthly in addition to the monthly claims. This is a competitive field using neBrokers.com as your employee benefits broker will guide in your decision and insure you have the best quote for your specific benefit need.

Is using a TPA or going ASO right for my business?
The answer to this general question has many variable and financial components. It is important that group's especially larger companies have a professional analyze this question. A proper self-funded program will save a company money and give flexibility in certain benefit decisions they would not have under a fully insured insurance plan.