For years, Third Party Administrators (TPAs) have been the norm in the United States. Their ability to knit together insurance carrier products to make best-in-class benefit packages while controlling costs, along with the administration and billing efficiencies they bring, have made them the obvious choice for managing employee group benefit plans.

Although TPAs have been around for a long time in Canada they have only recently started picking up steam. Traditionally, employers have gone direct to a single insurance carrier for their group benefits plans. As more sophisticated benefit offerings enter the Canadian market, the ability to piece together best-in-class employee group benefit solutions without increasing cost and complexity of plan administration has grown in importance. So how do you accomplish this? Enter the TPA.

Ok, so what does a Third Party Administrator (TPA) really do?

In its most basic form a TPA helps employers streamline and manage employee group benefit plans of any level of complexity. They take on the administration of your employee benefits plan and help to:

• Lower your administration costs
• Consolidate your management of all benefits into a single platform
• Keep you in control of your data across carrier changes
• Eliminate your billing reconciliation
• Improve the accuracy and compliance of your data
• Increase your plan design flexibility without increasing complexity

In conjunction with your benefits advisor, a TPA can:

• Increase your access to the market
• Help knit together best-in-class benefits
• Leverage your data to assist your advisor in performing independent renewal audits
• Provide your advisor with access to plan performance analytics

Now, not all TPAs are created equal, and not all TPAs offer the same set of services. When choosing a TPA it is important to ensure that they offer the platform and services that aligns well with your organization's unique needs. The right TPA will you save time and money and allow you to implement the right employee group benefits program for your organization.

What to look out for when choosing a TPA

TPAs come in all shapes and sizes.

Some TPAs perform both administration and claims adjudication. These TPAs use an insurance carrier in the background to insure risk and take over the function of paying claims. Other TPAs perform only administration and leave the claims adjudication to the insurance carrier thereby allowing you to work with the insurance carriers that are the best fit for your organization.

Some TPAs rely on largely manual process and third-party/outdated systems . Other TPAs have built efficient administration systems that are designed specifically for the Canadian market that take a lot of the manual effort of administration away.

These are just a few examples of some of the different services that TPAs offer.