What Is a Third-Party Administrator and How Can It Help

A third-party administrator, or TPA, is a company that helps manage employee benefits, such as health insurance and retirement plans, for other companies.

A TPA can provide a range of services, including plan design, enrollment, and claims administration.

By outsourcing these tasks to a TPA, companies can save time and money, and gain access to specialized expertise.

This allows companies to focus on their core business operations and leave the administrative tasks to the TPA.

Hiring a Third-Party Administrator (TPA) can provide numerous benefits for your business.

One of the most significant advantages is cost savings, which can be expected in a TPA's work from planning through administering the plan.

A TPA can help you save money by streamlining processes, reducing administrative burdens, and increasing cash flow.

Hiring a Third-Party Administrator (TPA) can bring significant cost savings to your organization. By outsourcing administrative tasks, you can expect to reduce expenses associated with plan development, implementation, and ongoing management.

One of the key areas where TPA's shine is in cost savings. From planning to record keeping and reporting, they can help you save money on various aspects of your health plan.

By leveraging a TPA's expertise and resources, you can reduce the financial burden of administering your health plan and free up more cash flow for your business. This can be a game-changer for organizations looking to optimize their budgets.

In addition to cost savings, a TPA can also help you streamline administrative tasks, making it easier to manage your health plan and reduce errors. This can lead to increased efficiency and productivity within your organization.

A retirement plan must have a designated plan administrator who is responsible for the day-to-day management of the plan. This person handles a lengthy list of responsibilities, which can be overwhelming and comes with liability.

A plan sponsor often outsources these administrative duties to a company that specializes in delivery of such services, like Definiti. The plan sponsor retains its status as a plan administrator even if many of the day-to-day retirement plan administrative duties are delegated to a Third-Party Administrator (TPA).

A TPA is well-versed in the plan provisions and regularly consults with the plan sponsor to ensure the retirement plan continues to fit the organization’s goals. This ensures the plan remains aligned with the company's objectives.

The TPA also maintains the plan’s compliance with any updates to the legislative and/or regulatory environment for retirement plans. This includes staying on top of changes to ensure the plan remains compliant.

The TPA performs required annual nondiscrimination tests on the plan to ensure it does not disproportionately benefit highly compensated employees. This helps prevent unfair treatment of certain employees.

The preparation of IRS Form 5500 is also a key benefit of engaging a TPA. The plan sponsor only needs to sign the document, while the TPA handles the preparation.

The TPA will also prepare any required or elective plan amendments to meet the changing needs of the sponsoring organization. This ensures the plan remains flexible and adaptable to the company's evolving needs.

A Third-Party Administrator (TPA) offers a wide range of services to help healthcare providers and organizations manage their business efficiently.

TPAs provide access to real-time eligibility and claims history reports, giving you a clear picture of your financial situation at any time.

They also offer accounting support and reconciliation, ensuring your books are accurate and up-to-date.

In addition to these services, TPA's provide billing services, eligibility management and communication, claim adjudication and auditing, case management and utilization reviews, customer service and call center support.

Here's a breakdown of the services offered by a TPA:

These services are designed to help you navigate the complexities of the healthcare industry and stay compliant with regulatory requirements.

To manage your relationships with third-party administrators (TPAs), you can save their roles to your account. Click "Save" to assign a TPA with selected roles to your employer account.

Once a TPA is assigned, they will have immediate access to and management of your account. You can also use this opportunity to remove a TPA from your account by clicking "Modify" and un-assigning their roles.

Employers can search for existing TPA relationships by clicking the "Account Maintenance" dropdown tab and then selecting "Third Party Administrator (TPA) authorization". From there, you can click the "Search" button to see a list of TPAs assigned to your account.

Here's a quick summary of the TPA roles management process:

Note: Only one role can be assigned to a TPA account at a time.

Recordkeeper Responsibilities play a crucial role in managing retirement plan accounts, and it's essential to understand what's involved.

A recordkeeper processes investment transactions for participants, managing and tracking contributions by source type. Employee enrollments are also processed by the recordkeeper.

In addition to these tasks, recordkeepers provide secure online access for participants to view their account information. This is a convenient feature that allows participants to manage their retirement plan accounts remotely.

Recordkeepers also generate quarterly participant statements and deliver them to participants. This helps participants stay informed about their account balances and investment performance.

Here are some key responsibilities of recordkeepers:

Saving the TPA relationship and roles is a crucial step in setting up your account. Click "Save" to assign the TPA with selected roles to your employer account.

Once you save the TPA relationship, they will be able to access and manage your account immediately. This means they'll have the necessary permissions to perform tasks on your behalf.

You can modify the TPA roles by clicking the "Modify" button. This allows you to add or remove roles, or even remove the TPA from your employer account altogether.

Here are the key steps to save the TPA relationship and roles:

By following these simple steps, you can ensure that your TPA has the necessary permissions to manage your account effectively.