Your TPA May Be More Important Than Your Network
Everyone compares networks, stop-loss rates, and pharmacy contracts. But the decision that has the biggest impact on how a self-funded health plan performs over time is often the one that gets the least attention: choosing the right Third-Party Administrator.
VP of Employee Benefits · BHC Insurance · Independent Benefits Consultant
After spending years helping employers evaluate self-funded health plans, I've come to believe something that doesn't get talked about nearly enough. Everyone wants to compare provider networks, stop-loss rates, pharmacy contracts, and discounts. Those are important conversations, but they often overshadow one decision that has a bigger impact on how the plan performs over time: choosing the right Third-Party Administrator.
A TPA is more than a claims processor
A lot of employers assume a TPA is simply the company that processes claims. That's only part of the story. A good TPA becomes the operational backbone of your health plan. They're handling eligibility, claims, customer service, reporting, compliance support, vendor coordination, and a hundred other things that most employees never think about — unless something goes wrong. When they do their job well, HR spends less time putting out fires. When they don't, HR becomes the customer service department for the health plan.
Where employers lose savings they worked hard to negotiate
I've seen employers spend months negotiating a better stop-loss renewal only to lose those savings because their TPA wasn't providing meaningful reporting, wasn't coordinating with cost-containment vendors, or simply wasn't helping manage the plan proactively. The truth is, processing claims is a commodity. Helping an employer operate a better health plan isn't.
"Processing claims is a commodity. Helping an employer operate a better health plan isn't."
What the best TPAs actually do
The best TPAs aren't waiting until renewal to tell you how your plan performed. They're meeting with you throughout the year, reviewing data, identifying trends, coordinating with your broker and other vendors, and bringing ideas that can improve both the financial performance of the plan and the employee experience. Technology matters too. Employees expect to manage their health benefits as easily as they manage their banking or shopping. HR teams deserve eligibility systems that actually make administration easier instead of creating more work. If your TPA's technology feels outdated, chances are other parts of their operation are too.
Transparency is non-negotiable
Another thing I look for is transparency. Can they explain how claims are being paid? Can they produce meaningful reports without weeks of waiting? Are they willing to share data that helps employers make better decisions? If the answer is no, that's usually telling. One of the biggest shifts I've seen over the past several years is that successful self-funded plans aren't built around one great vendor. They're built around a group of partners who communicate well and execute together. Your broker, TPA, PBM, stop-loss carrier, care management vendors, and compliance partners should function like one team — not a collection of companies working independently.
The right question to ask
That's why I believe choosing the right TPA is one of the most strategic decisions an employer can make. Because the best TPAs don't just pay claims — they help employers build health plans that perform better year after year. If you're evaluating a self-funded strategy, don't just ask what a TPA charges. Ask how they help your plan improve. The answer to that question will usually tell you everything you need to know.
Evaluating a self-funded strategy or looking for a better TPA? I'm available for consulting engagements across Northwest Arkansas and beyond.
Sources & Further Reading
- Self-Insurance Institute of America (SIIA): Self-Funded Health Plan Administration Guide — Industry guidance on TPA roles, responsibilities, and selection criteria for self-funded employer health plans.
- DOL: Understanding Self-Funded Health Plans — DOL overview of self-funded plan structure and the employer's administrative responsibilities under ERISA.
- KFF Employer Health Benefits Survey 2024 — Self-Funded Plans — Data on self-funding prevalence by firm size and the role of TPAs in plan administration.
- ERISA Section 503 — Claims Procedure Requirements — Statutory basis for TPA claims processing obligations and the employer's fiduciary oversight role.
- PBGH: Evaluating Third-Party Administrators for Self-Funded Plans — Employer-facing criteria for TPA evaluation including data access, network performance, and claims accuracy.
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About the Author
Corry Hull, REBC®, CSFS®
VP of Employee Benefits · BHC Insurance
Corry Hull, REBC® CSFS®, is VP of Employee Benefits at BHC Insurance and the founder of Employer Benefits IQ (www.employerbenefitsiq.com). He is a Certified Health Rosetta Advisor — one of fewer than 200 nationwide — and a multi-year presenter at United Benefit Advisors (UBA) national conferences. He specializes in self-funded health plan design, PBM contract strategy, stop-loss structuring, group medical captives, and ACA/ERISA compliance for mid-market employers. His work has been recognized by Health Rosetta (Rosie Award, 2026), UBA (Producer Peak Performer, 2025–2024), and BHC Insurance (Producer of the Year, 2021–2025). His employer-education content has been referenced in BenefitsPro and cited within the Health Rosetta advisor community. All consulting and brokerage compensation is fully disclosed.