Moving from a fully insured to self-funded plan is enough of an adjustment itself, so making sure you’re aligned with a TPA (third party administrator) you trust and feel comfortable with is a big deal. There are a lot of us out there, so how do you make that ever-important decision of who to have administer your plan? Besides the fundamentals like self-funding know-how and experience (things that come from administering plans of all different sizes, scopes and industries), here are three things I’d recommend paying careful attention to:
- Claims Review Approach Claims play a huge role in self-funded plans as this is where a lot of potential savings are found. Before selecting a TPA, it’s important to know what sort of claims review process the firm has in place and how well claims are being scrutinized. Ask what steps the TPA’s claims team takes in analyzing billed charges, if they participate in claims negotiation (and their success rate), and if examples of its savings results can be shared.
- Flexibility in Customizing Your Health Plan A reputable TPA should offer a variety of options for customizing your benefits plan the way you want it. When meeting, ask about the different programs and services available – everything from prescription management to telemedicine – and which ones will help with cost containment efforts. Make sure the TPA isn’t limited to working with only a few select partners and has a broad network of collaborators instead.
- Compliance Knowledge In self-funding, ERISA is the main governing law and health plans are generally only subject to federal regulations (vs. state AND federal). Your TPA should understand all aspects of ERISA inside and out, especially fiduciary duty. There is a lot that goes into maintaining plan compliance, so it’s good to feel confident that that your TPA partner is on top of the details.
When companies choose to self-fund, the employer-TPA relationship is a critical one as the two will work very closely together. There are many factors to take into consideration when choosing a TPA. Do your homework and you’ll know when you find the right one!