A Third Party Administrator (TPA) is an organization that manages employee group benefit plans on behalf of an employer. A TPA can provide more cost-effective and flexible group insurance administration for small and mid-sized businesses than larger traditional insurance carriers can – in some cases saving as much as 20% in admin fees.
However, it’s important for business owners to know that not all TPAs are created equal.
For example, the Financial Services Commission of Ontario recently issued a $50,000 penalty on Platinum Health Benefits Solutions Inc., and consequently the company decided to close its business on December 31st, 2017, causing significant disruption for its clients.
In order to help business owners mitigate risk and avoid choosing the wrong TPA, many years ago, we put together a handy guide: How to Choose Your TPA. This guide provides 16 questions you should ask any TPA before making a decision. Given recent development, this is even more important today.
Here are a few of the key questions from the guide:
- What services do you provide in-house and what do you contract out?
- Do you provide a written agreement that outlines all financial terms, services, and fees?
- Do you provide regular financial reporting with a breakdown of claims paid by type of claim?
To find out the rest of the questions, along with why they’re important, check out the guide now!
A TPA is often the most advantageous option for small and mid-sized businesses – and choosing a reputable TPA is just a matter of knowing what to look for and asking the right questions.
The Benefits Trust helps successful business owners build a better benefits plan than they can get anywhere else. Get in touch with us today!
For more information about TPAs and The Benefits Trust, watch our video!
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