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Find the Right TPA for Your Self-Insured Level Funded Health Plan
If you have decided to consider a self-insured level funded health plan for your business, you’ve made a smart decision. However, an important part of having a self-insured level funded plan is choosing the right Third Party Administrator (TPA).
Choosing a TPA Over a Carrier
Traditionally, TPAs are known for white glove service. They are in the business of customizing service and plan designs to meet the needs of each client. Insurance carriers administer self-insured level funded plans and fully insured level funded plans the same way. To them, the only difference is the financial aspect. This is why employers favor TPAs for their self-insured level funded plans.
There are a myriad of other reasons to choose a TPA:
- Group Size: Most insurance carriers will not provide self-insurance administration for groups under 500 people. This has led to a misconception that self-insurance is for larger groups. A good TPA, like Insurance Administrator of America, has created self-insured plans for as low as 35 lives.
- Savings: Be wary of the carrier or TPA that credits your account with a percentage of your savings. The employer should always keep 100% of the savings.
- Select a TPA that provides 24/7 access to your claims data. The broker and employer should have access to data and standard reporting at all times.
- Shell game: Some carriers present level funding as a new, exciting product, when it is nothing more than a funding method. The employer always has the option of paying for claims as they are incurred or paying a fixed amount (level funding).
- TPAs are the self-insurance level funding experts because that’s all they do. TPAs think outside the box, the type of creative thinking that leads to savings.
Of course the best benefit of all with a TPA is more money in the employer’s pocket.
How to Choose a TPA
When choosing a TPA there are many factors to consider:
- Years of existence/experience
- Funding options: Traditional and level funding
- Savings: Make sure your savings don’t turn into a TPA surcharge
- Education of staff
- Claims risk: Your TPA should be able to clearly estimate the maximum claim liability of your plan and provide multiple stop loss insurance policy limits and health plan design options to help lower the overall claims risk for the health plan.
- E&O insurance and bonding
- Claims system flexibility
- Reporting
- Internet capabilities
- Claims turnaround
- PPO re-pricing and UM
- Underwriting
- Stop loss administration
- Termination: Even if and when you terminate with a TPA, claims that were incurred during the health plan year, but received after the termination date of the contract, should be managed by the TPA. Your TPA should be able to help manage payments for terminal liability costs easily, as well as provide accurate estimates of what terminal liability costs will be.
How IAA can Help
IAA has been a TPA for over 20 years. Our knowledgeable and dependable staff has been in the insurance business for over 20 years as well. IAA prides itself on being able to offer employers and brokers a personalized experience that comes with great advantages. As your TPA, IAA can offer:
- Access to multiple stop loss carriers so IAA can provide the one that works best for your business
- Employee web portals so they can keep track of their claims information
- Experienced, expert plan administration
- Reports that will help you keep track of your savings goals
- And so much more!
If you are interested in learning how IAA can become your TPA please reach out! You can reach IAA by phone at 856-470-1200. Remember, with IAA one call does it all.
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