Health insurance third party administrators are available to provide a range of services to your small business and its employees. Many third party administrators of health insurance that offer individual health care plans also offer small business plans, while others have plans for larger businesses and corporations. Your location and the number of employees will dictate the plans available to you from a healthcare TPA.

When working with third party administrators of health insurance, it is important that you know your own roles and responsibilities for providing healthcare to your employees and for working effectively with a third party administrator.

1. Get tips and advice for managing a small business health plan.
2. Learn about your responsibilities as an employer when dealing with a healthcare TPA.
3. Compare quotes from a number of health insurance third party administrators.

Action Steps
The best contacts and resources to help you get it done

Be prepared when searching for a health insurance TPA

Know what to expect from third party health insurance, as well as services you do and don't absolutely need from your insurance provider. While providing good coverage is valued by employees, it is also important to consider employees that might rather have extra money added to a paycheck than above average healthcare coverage. When working with a TPA, know your bottom line needs as well as your preferences for group plan rates and coverage.

I recommend: My Own Business offers do's and don'ts of insurance for small business, suggesting that employers establish a flexible area of expectations for healthcare coverage within which to work with TPAs. The Health Care Blog also offers advice to employers managing third party health insurance health plans.

Understand your responsibility to find a healthcare TPA

Third party health insurance is increasingly becoming mandatory for some business sectors to provide their employees. In some cases you may be held legally responsible for providing third party benefits and ensuring employees are knowledgeable about their coverage, but it is always a good business practice to make sure your employees are informed about their rights and the existing regulations.

I recommend: The U.S. Department of Labor provides links to legislation online and a site for helping employers understand employee health benefit regulations. The U.S. Chamber of Commerce also offers up-to-date information about the regulation of small business health plans. When working with third party administrators of health insurance, be aware of initiatives such as COBRA that ensure health plans can be bought by not just full-time employees, and make sure your TPA will be in compliance with these laws.

Compare quotes on third party health insurance before you buy

When looking for a health insurance TPA, make sure you shop around to compare plans and rates. Fine distinctions or large discrepancies may exist between plans, especially for businesses with fewer than 20 employees. Make sure you speak with at least five different TPAs to discuss the specific needs of your business before you agree to a coverage plan.

I recommend: The Small Business Health Insurance Network provides free quotes from leading providers and guides for small business health plans, so that you can have a basic idea of coverage and rates by state before working with third party administrators of health insurance. You can also get quotes and read about plans directly from small business TPAs like United Health Care and eHealthInsurance.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When looking for health insurance third party administrators to serve your business, ask about and consider the industries typically served by each provider of TPA health insurance. By working with a TPA that has already served other companies in your industry, you can have more assurance that your specific needs will be addressed.

Third party administrators of health insurance make up a separate entity used as a way to process insurance claims. A company outsources to health insurance third party administrators in order to have them handle claims that have been filed by one of your employees.

A third party administrator or healthcare TPA will also secure and provide benefits information to employees of your company. These representatives typically work on an independent basis without any affiliation to a particular insurance company.

1. Determine third party benefits. Typically, owners find that instead of taking the time to handle healthcare packages, they can bring in a third party administrator to do the work.

2. Find health insurance third party administrators that operate in your area. Discuss cost of services during initial contact.

3. Hire a health insurance TPA. Once you find available representatives in your area, hire the medical insurance TPA on a short or long term basis.

Action Steps
The best contacts and resources to help you get it done

Determine the services of an insurance third party administrator

You'll want to get a general overview of the services provided by third party administrators of health insurance. Typically, healthcare TPAs have expertise in the field of insurance and can provide your company with services, such as health insurance enrollment, claims processing and appeals.

I recommend: Look through the services provided by Associated Third Party Administrators or ATPA to get an idea about what type of job a TPA health insurance professional performs. Compare these services to the similar insurance services firm F.A. Richards & Associates.

Locate a third party administration firm

Inquire from business associates about different third party administrators they have worked with. You can also use association groups to locate TPAs that work in your area. You'll want to typically hire a medical insurance TPA prior to enrolling your business in a health insurance plan.

I recommend: Through TPAA, you’ll receive recommendations for a reviewed third party administration professional. You can also navigate the site to find out additional information on the health insurance TPA field. You can also use the directory of third party administrators insurance professionals on Judy Diamond Associates.

Hire a third party health insurance professional for your company

Once you have located third party administrators of health insurance, you can choose the representative that can provide you with the best service at the lowest possible cost. Once you determine payment and duration of employment, you can draw up a contract.

I recommend: You can hire one of the associates of the Benefits Administrators & Consultants to work with your firm and assist with your healthcare benefits package and claim processing. Health Cost Solution will include services, like HIPAA administration, benefits counseling and healthcare savings plans to parties that hire their third party administrators.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Most third party administrators of health insurance will have access to lower premium rates for many medical insurance policies. This savings can offset the cost of hiring a healthcare TPA.

Working with third party administrators of health insurance requires a background in banking, finance, accounting or private insurance. While experience and business skills will help advance a career in third party administration, a higher education credential is a good starting point for entry into work with a healthcare TPA.

Depending on your work area, either a bachelor of business or master of business administration degree is ideal for working with health insurance third party administrators. A more specific degree can be helpful for people with less experience, while those established in another type of investing or financial planning business may only need a more general educational background.

Begin your third party administrators of health insurance education and training with one of the following options:

1. Get licensed in insurance to gain experience in the field.
2. Earn a degree in banking or finance for a position with a healthcare TPA.
3. Use an accounting degree and certification to work with third party health insurance.
   

Action Steps
The best contacts and resources to help you get it done

Take courses towards an insurance license to join a health insurance TPA

One option for gaining the education and training you need in the third party health insurance field is to obtain an insurance license in your state. License requirements differ, and several license types are available for each state. Any insurance credential will contribute to your qualification to join a medical insurance TPA.

I recommend: American Investment Training allows you to search by state to see the license types available for you to earn online. America's Health Insurance Plans has a Center for Insurance Education and Professional Development, with online courses in insurance.

Work in third party health insurance with a banking or finance degree

Many people who work for a healthcare TPA have a background in banking or finance, which gives you the skills you need to determine third party benefits packages. Banking and finance degrees may be associate's, bachelor's or master's degrees and may be completed online or on campus, depending on the program.

I recommend: Strayer University offers an online bachelor of business administration in banking or a master of business administration in finance, which are both useful education fields for a health insurance TPA. Capella University also has a fully online bachelor of science in business, with a concentration in finance.

Use an accounting degree for third party administrators of health insurance education and training

Many other people in the third party health insurance business have backgrounds in accounting or are CPAs. While you can still benefit from the training you receive in an accounting degree without taking the CPA exam, becoming certified has extra benefits for higher level and higher paid work in insurance.

I recommend: New England College has an online master of science degree in accounting, and Ellis University has a bachelor's and master's degree in professional accounting. Before joining a health insurance TPA, you may also want to use a program like Becker CPA Review to prepare for the CPA exam.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Many people who work for health insurance third party administrators do not have advanced degrees in business or finance. With as little as an associate degree, it is possible to obtain the experience you need in the financial sector to work with a health insurance TPA, including experience working for a company that has a third party health insurance plan.

The health insurance industry is vast and complex, and understanding it as a beneficiary or as a third party administrator requires the understanding of some key terms. Third party insurance is used during hospital stays, emergency room visits, doctor appointments, and for prescription coverage.

Third party terminology generally consists of terms relating to organizations and tiers of care that are organized within a third party's structure. Learn the basic key terms of third party health insurance administration.

Action Steps
The best contacts and resources to help you get it done

Actuary

An actuary works in the financial sector of third party administration. They assess the possibility of risk and work with insurance administrators to develop policies and formulate copays and premiums based on risk and employment.

I recommend: The U.S. Bureau of Labor Statistics explains how actuaries work and how they affect the third party health insurance industry.

Managed care organization (MCO)

A managed care organization (MCO) is a health care provider or group of providers that contracts with an employer or employee to insure enrolled employees. Employees must see providers within the MCO plan to receive coverage. These plans are also referred to as HMO plans.

I recommend: Oregon's Worker's Compensation Division offers a simple explanation of how managed care organizations work and resources to learn more.

Ancillary services

Ancillary services are services that are not considered required care by most insurance companies, such as dermatological procedures, diagnostic testing, and acupuncture or massage. Many third party administrators require enrollees to pay out of pocket for these services and reimburse the member a portion of the cost.

I recommend: Assurant Health provides this explanation of ancillary services in relation to third party providers and health care coverage.

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act regulates patient privacy in the reporting and exchange of medical and insurance information. Third party health insurance providers are subject to HIPAA's guidelines.

I recommend: Direct Marketing Association explains how third party health insurance administrators are affected by HIPAA's guidelines.

Deductible

A deductible is the amount of money that an insured party is required to pay before the third party administrator begins paying for procedures or services. Deductibles help third party administrators of health insurance avoid paying for small claims and let them allot money towards more expensive claims or procedures.

I recommend: WiseGeek explains a high deductible health plan and how deductible amounts benefit or affect the operations of third party health insurance administrators.

Formulary

A formulary plan is a list of medications that insurance providers will cover at reduced or no cost to enrollees. Third party administrators base formularies on the acquisition cost of the drug, the availability of generic or low-cost equivalents, market availability, and other factors.

I recommend: PubMedCentral conducted a study on the effect of formulary drug programs on healthcare economics and third party insurance administrators.