According to the Society of Professional Benefits Administrators (SPBA), the national association for TPAs, some 66% of all U.S. workers are covered by self-funded health plans. Most are managed by Third Party Administrators. Choosing the right TPA for your company is essential in a successful self-insured program.
Here are 10 Tips on what to consider when reviewing TPAs.
1. Find a custom fit. Your TPA should have the ability to tailor a benefit plan that fits the specific needs of your company, workplace and industry. "One of the greatest benefits of self-insuring is structuring your plan to fit your company, and that should extend to your TPA as well," says Leesa Davis, President of SB Howard & Company.
2. Get references. Ask for and check references from some of the TPA's largest and smallest clients. Create a set of questions that address your needs, such as overall satisfaction with the level of service, accessibility, auditing and reporting platforms.
3. Accurate, accredited and legal. Request current accreditation and membership standings, as well and the TPA's method of keeping your company in the know. Laws involving self-insured health plans are complex and ever-changing. Employers have a legal responsibility to their employees, and the TPA is instrumental in avoiding costly mistakes.
4. Ask about integration. Consider how PPOs and other arrangements fit into the equation. You will want to know how your TPA will handle programs already in place or need to be put in place.
5. Funds management. Consider how your funds will be managed. Laws require every plan to safeguard its assets. A segregated trust fund protects money from misuse, but how will expenses and claims be paid when needed? What protocols will be in place and how will convenience impact the policies? With funds management comes management tools, reports and audits that can be useful to your HR and accounting departments. Will your TPA generate reports that matter to you?
6. COBRA and HIPPA documentation. Employer health plans must offer continued coverage to employees and their dependents who leave the company. Consider how your TPA will administer these programs, and if their errors and omissions insurance cover related errors.
7. Cost containment. Quality care is cost effective. Discuss how issues such as pre-certification, large case management, ultilization reviews, network evaluations, and catastrophic claims are handled. "The more your TPA does in house, the more cost effective the plan will be," says Davis.
8. Training and CEU. You should expect the professionals who handle your plan's funds and claims, known as claims analysts, be well trained and up to date on continuing education requirements. Look for the individual's experience in the industry as well as the TPA's turnover rates. You want smooth and reliable service from your TPA, along with the ability to recognize fraud and abuse or predict imbalances and stop-loss notifications.
9. Management reporting. Customized and detailed periodic reports about what's happening with your plan is essential to the stewardship of your self-insured benefits plan. Reports should cover such areas as finances, employee count, medical costs, medical services and savings realized. Your TPA should be able to generate most any detail you require. "Good reports allow your company to make informed decisions about your plan from year to year," says Davis. "With solid report histories, you can determine if you need to add services, increase or decrease employee contributions or make adjustments needed."
10. Review bids from stop-loss providers. Stop loss insurance is a back-up plan should your company experience unexpected high claims. Although your TPA should negotiate and contract on your behalf, you will want to review the bids, consider insurers' credentials, and study specific plan dates, details and claims definitions.
