How Efficient Administration of Healthcare Makes Better Business

The ultimate in administrative support

In a study conducted by the U.S. Chamber of Commerce, 80% of respondents agreed that health insurance was one of the most important benefits for an employer to offer. But as health insurance premiums skyrocket, the current health insurance model is no longer viable for many companies and they are looking for alternatives that don’t break the bank. 

One option entering the spotlight is the self-funded health plan. While these plans have immense benefits, they can be very complex and a bit more challenging than traditional approach for a business to fully execute. Despite its challenges, 65% of U.S. employees with employer-sponsored insurance are in a self-funded plan, proving its favor. But businesses that choose the self-funded plan route need strategy that streamlines the administration of healthcare. Enter third-party administrators or TPAs. 

Understanding a TPA and How it Benefits Both Patients and Employers

First, it’s important for businesses to understand exactly what a TPA is to reap its benefits. A TPA, or third-party administrator, is an organization that provides operational and administrative services for an insurance plan including claims processing and employee benefits management for another organization. TPAs are a crucial part of self-funded insurance group health plans providing companies the ability to create and offer their employees a more customizable health plan. 

What’s more, TPAs can help tailor fit benefit plans based on the needs of a company’s employees, assist in enrollment, process medical claims and provide customer support to employees covered under the plan. In providing and performing their administrative support, TPAs can add efficiency to employers’ health programs. 

The Agile Game of Managing Healthcare Costs and Creating Effective Administration

The beauty behind employing a TPA is the value it brings to the business, and the cost saving game starts when a company elects to manage their employee benefits through a self-funded health plan. 

A self-funded plan takes the shape of a company itself collecting premiums from employees and taking on the responsibility of paying their medical claims. However, the business doesn’t have to take on the nitty gritty administration work. Instead, TPAs are the cornerstone of self-funded plans, taking on the behind-the-scenes operations, eliminating the extra workload and staff for the business itself. 

Self-funded plans aren’t foreign to businesses. KFF reports that in 2022, 65% of workers were covered under a self-funded health plan. These plans also offer the benefits of different taxes, rates and fees that become savings for the companies employing them. 

While TPAs take on the administrative work of self-funded plans, they add additional value to companies as a skilled partner that can leverage experience and deep integrations in the healthcare industry to help serve a self-funded plans’ needs. TPAs can negotiate rates with healthcare providers, manage claim processing and offer cost containment strategies. By managing plans, processing claims and reducing claim and administrative expenses, TPAs can save organizations money on health plan administration regardless of the carrier. And by contracting directly with the providers, companies have more control over their healthcare spend overall. 

Keeping Employees Happy with Low-Cost Health Plans

Not only can TPAs help manage healthcare spend for the company, but they also benefit the employee monetarily as well. A TPAs rate negotiation directly affects the individuals on the plan, offering lower rates. By managing healthcare costs and expenses, TPAs allow employees to seek and receive the care they need without the financial burden. Plus, TPAs provide quality service that also helps employees get the care they need in a timely and efficient manner. 

TPAs can help prepare and encourage employees to seek preventative care programs, ultimately reducing the risk of high-cost future medical treatments that could be prevented. And to help employees maintain good health, further helping to reduce future costs, TPAs can manage wellness programs for individuals. Through these resources, TPAs help teams make informed decisions about their healthcare plans and avoid unexpected medical expenses. 

Although choosing the right healthcare plan structure may seem like a simple task, it should be a no-brainer for companies to choose self-funded plans and employ a TPA. Changing strategies can help both businesses and their employees access much-needed healthcare without the high costs and eliminate the mundane for the company itself. While the traditional healthcare model begins to look out of scope for many business budgets, companies mustn’t fret with the option for self-funded plans with TPAs at the helm.