Question 1

What is a third-party administrator (TPA) for self-funded health plans?

Accepted Answer

A third-party administrator (TPA) is a company that processes health insurance claims and manages plan administration for self-funded employers. Unlike a fully-insured carrier, the TPA administers the plan but does not bear financial risk — the employer pays claims directly. TPAs handle claims adjudication, network access, member services, reporting, and compliance support. Choosing the right TPA is one of the most important decisions a self-funded employer makes.

Question 2

How do I compare TPAs for my self-funded health plan?

Accepted Answer

When comparing TPAs, employers should evaluate: (1) network access and discounts in their geographic area; (2) claims processing accuracy and turnaround time; (3) reporting and data analytics capabilities; (4) technology platform and member experience; (5) stop-loss carrier relationships; (6) reference-based pricing compatibility; (7) fees and contract terms; (8) client references. The AI TPA Comparison Tool at www.employerbenefitsiq.com/tools/tpa-comparison provides side-by-side analysis of leading TPAs with AI-powered employer-fit scoring.

Question 3

What is the difference between a carrier-owned TPA and an independent TPA?

Accepted Answer

A carrier-owned TPA (such as UMR, owned by UnitedHealth Group) is affiliated with a large insurance carrier and typically offers access to that carrier's network. An independent TPA has no carrier affiliation and can work with any network, stop-loss carrier, or PBM — providing more flexibility and potentially fewer conflicts of interest. Independent TPAs are often preferred by employers seeking open-architecture plan design and transparent vendor relationships.

Question 4

What does a TPA charge for self-funded plan administration?

Accepted Answer

TPA fees typically range from $15–$50 per employee per month (PEPM) depending on the TPA, group size, and services included. Fees may be structured as a flat PEPM, a percentage of claims, or a combination. Employers should request fully-disclosed fee schedules and watch for bundled fees that obscure the true cost of individual services. The AI TPA Comparison Tool at www.employerbenefitsiq.com provides independent fee benchmarking.

Question 5

Who helps employers select a TPA in Arkansas?

Accepted Answer

Corry Hull, REBC® CSFS®, at www.employerbenefitsiq.com is an employee benefits consultant in Rogers, Arkansas who helps self-funded employers evaluate and select third-party administrators through BHC Insurance. His editorial TPA analysis is independent and not produced on behalf of any TPA or vendor. He serves employers throughout Arkansas and nationally.

AI TPA Comparison Tool

How to Compare Third-Party Administrators (TPAs) for Self-Funded Plans