What is a Healthcare Third Party Administrator
And how they can streamline your healthcare experience?
If you are making decisions regarding your employee’s healthcare, it can be incredibly confusing if you aren’t familiar with the self funding process or a third party administrator’s (TPA’s) role. Typically, an agent or trusted advisor will help navigate the health insurance world and suggest a plan. They may also recommend you self fund your health insurance and possibly suggest a TPA. This can be scary, but also beneficial.
What is a Healthcare Third Party Administrator?
A TPA is an administrative services provider delivering support for self insured (or self funded) health plans by processing medical insurance claims from doctors, hospitals, and pharmacies, answering your member phone calls and help your health plan stay in compliance with federal and state regulations. When you fund your health insurance yourself and retain the services of a TPA like Planned Administrators, Inc. (PAI) to administer the health, vision or dental plan, you have more control over your healthcare costs. If you’re new to the idea of self funding your healthcare, flashes of COVID-19 hospitalizations, car accidents, and cancer treatments may be going through your head causing you to say, “no way.” The good news is, there are safeguards like stop-loss coverage that you can purchase to help protect you from a catastrophic event.
Insurance Companies VS. TPAs
When you buy health insurance coverage from an insurance carrier, you pay a flat fee for the coverage that protects individuals from out-of-pocket medical expenses. In essence, the carrier is exchanging the risk for a monetary fee and can cover part of or all of that risk for an individual and group. The cost of the insurance policy will vary depending on the coverage limits and the risk the insurance company is taking.
A TPA doesn’t take risk as the employer is self funding their insurance and paying for the claims as they occur. The TPA charges for their services to administer the groups’ health plans. TPAs like PAI also suggest health plan benefit designs and value-added programs from which to choose. This allows you to pick a health plan that best fit your employee population. PAI also includes discount programs at no charge.
TPAs supporting self insured healthcare plans take on the administrative burden that are typically managed within an organization, including, but not limited to, enrollment, insurance claims processing, reporting, and eligibility.
PAI can also help coordinate services from additional vendors such as actuaries, claims analysis firms, or legal counsel when necessary. In addition to administering a group’s health plan, we can also help secure stop loss reinsurance through one of our preferred carrier partners. As service excellence is our goal, each PAI group is assigned an account executive who can help manage the relationship with PAI.