3 REASONS WHY A THIRD PARTY ADMINISTRATOR MAY BE RIGHT FOR YOU

There are two different ways to secure group benefits for your employees. You can go directly to an insurer, or you can purchase the benefits through a Third-Party Administrator (TPA). A TPA is a company created specifically to administer and deliver employee benefits to businesses. They do not underwrite or assume the “risk” involved in insuring the employee benefit plan.

This is in contrast to the traditional insurance companies, who began as insurers. They were created to underwrite employee benefit plans and their business is assessing the risk and insuring it. For insurance companies, the employee benefits administration and delivery services were just a necessary addition to the business in order to deliver their product to customers.

Insurance companies have been around for a long time. While third-party administrators are certainly a newer addition to the employee benefits landscape, they have also been around for a while. What is significant is that third-party administrators were created as a solution to administration and delivery problems that many companies were facing with insurers.

Looking beyond the big insurers to a Third-Party Administrator

There are a lot of reasons to consider a third-party administrator for your employee benefits, but here are 3 of the best reasons.

1. A better employee benefits experience

Most third-party administrators are significantly smaller than insurance companies. In the case of GroupHEALTH, we began as a small business and we still remember what it feels like to be a small business. This means our services are designed to be straightforward and user friendly. We look at employee benefits from your perspective, then focus on ways of making things easier for you.

One example is online plan administration. At GroupHEALTH, we do this through our online benefits administration platform called WEBS Online. This platform is meant to save you time. It includes alerts and notifications to help you automate the key tasks and day-to-day duties of plan administration.

Another example is our online employee self-enrollment system. Walking employees through self-enrollment, sending reminders about enrollment deadlines, and reporting it all back to your plan administrator saves you a lot of time and headaches.

Customer service is another thing that sets third-party administrators apart from the competition. Being significantly smaller than the big insurers means our clients aren’t just numbers. We actually know our clients. Our clients can reach out to real people for help and we can offer flexible solutions to solve the most challenging situations.

2. The best products

One of the great things about using a third-party administrator is that you aren’t limited to using the same insurance company for all of your coverage. If you go to an insurer, this isn’t the case. Dealing directly with an insurer means you may have to settle for some not-so-great products along with the products that are good.

The scenario is different if you’re using a third-party administrator. With a third-party administrator, if you like the health and dental product from one insurer, and you like the life insurance product from another, you can have both.

A third-party administrator chooses the best products from multiple insurers and then packages them together for you. This way you get the very best products, but you don’t have to deal with multiple insurers or multiple bills.

In addition, a third-party administrator has substantial influence with insurers (based on the total volume of insurance purchased on behalf of customers). At GroupHEALTH, this has meant that insurers have created new products with us, based on feedback we received from customers.

3. Save money

Working with a third-party administrator can also save you money. When you approach an insurance company, you are essentially one small fish in a very big sea. You don’t have much bargaining power when it comes to negotiating good rates. As a third-party administrator, due to the scale of our operation, we are a much larger fish with some substantial bargaining power. This translates into better rates which are then passed on to you.

You can also save money through active cost containment strategies. The big insurers really don’t have much incentive to help you control your claim costs. As a third party, we’re looking out for your best interests, and we do want to save you money. We have developed cost containment strategies to help with things like prescription drug costs (Smart Rx Solutions), disability claim costs (disability management services) and mental health claims (employee and family assistance program).

We also have a long-term focus – this means no huge discounts on the front end and then big increases at renewal. Our goal is to make the plan sustainable and keep costs manageable over the long term.

Good advice is key

Are you interested in seeing what a third-party administrator can do for you and your employee benefits plan? Are you ready for a better employee benefits experience, great products and competitive rates? Review your options with one of our licensed advisors on the phone or in-person or contact us for a comparison quote.

Whether you’re looking for extended health and dental coverage, disability coverage, or life and critical illness coverage, GroupHEALTH has affordable benefit packages that work as hard as you do.