Next Level Benefits Administration: The Value of Working with a Third-Party Administrator

Next Level Benefits Administration: The Value of Working with a Third-Party Administrator

  July 27, 2023

SEB Marketing Team

In today’s dynamic and fast-paced business environment, many organizations rely on third-party administrators (TPAs) to realize efficiency gains. TPAs are experts in various fields, including human resources, benefits administration, claims processing, etc. By partnering with a TPA, businesses can access external expertise and resources while focusing on their core competencies to improve overall efficiency.

For organizations that are outsourcing their benefits administration to a carrier, there are some unique advantages of working with a carrier agnostic TPA whose core business is based on providing administrative services, rather than providing administration as an add-on. This article will discuss the main advantages of partnering with a third-party administrator for your benefits administration.

Specialized Expertise: Partnering with a third-party administrator (TPA) provides access to their extensive knowledge of group benefits. Benefits are complex and a TPA understands how to navigate specific benefits regulatory requirements and implement industry best practices. By delegating these functions to a TPA, businesses can gain access to this expertise and if currently administering benefits inhouse, they can eliminate substantial investments in training and can free up internal resources for other projects.

Enhanced Efficiency: By leveraging sophisticated technology platforms and efficient workflows, TPAs optimize administrative procedures, resulting in increased service efficiency, accuracy, and reduced response times that will enhance the member’s overall experience.

Flexibility from Carrier Agnostic TPA Services: Working with a carrier agnostic TPA can provide multiple advantages to your business and help you avoid being limited to a single insurer. If administration is currently with a carrier, the carrier cannot be changed without changing the administration.

Partnering with a carrier agnostic TPA, means that administration is independent of the insurer. This gives you the flexibility to evaluate multiple insurance options and select based on your requirements. If you decide to change carriers, you can easily, and cost effectively transition from one insurer to another without the hassle of a complex implementation.

Also, a TPAs platform can support multiple carriers across different benefits within the same employer plan for flexibility and cost savings by providing more negotiating influence with insurers.

Cost Savings: A partnership with a Third-Party Administrator (TPA) can substantially reduce costs. By utilizing a TPA, businesses can reduce the administrative burden on their team and can redeploy these resources. Also, implementation costs can be reduced if switching carriers.

Typically, TPAs operate on a fee-based model that enables businesses to pay by plan member headcount. In addition, TPAs are adept at negotiating favourable rates and terms with vendors and service providers, resulting in cost savings.

Compliance and Risk Management: The complexity of the regulatory landscape can be a challenge for businesses, especially those operating in highly regulated industries. Trusted third-party administrators (TPAs) understand regulatory guidelines and keep up-to-date on changes to laws and regulations. TPAs reduce the likelihood of incurring penalties, fines, and legal complications by ensuring compliance with applicable laws. In addition, TPAs implement stringent security measures and data protection protocols to safeguard sensitive employee data, thereby reducing the likelihood of data breaches.

Access to Advanced Technology: TPAs leverage cutting-edge technology solutions to enhance their service offerings and can offer advanced functionalities to handle complex plan design requirements. By partnering with a TPA, businesses gain access to these advanced systems, including cloud-based platforms, data analytics tools, mobile applications, and more. These technologies can improve the plan member experience, streamline processes, and provide real-time insights. Working with a TPA enables businesses to leverage the latest technology without heavy investments in infrastructure or ongoing maintenance.

A partnership with a third-party administrator offers numerous benefits to businesses. These include specialized knowledge, increased efficiency, cost savings, assistance with regulatory compliance, and access to cutting-edge technology. By outsourcing essential administrative functions to a TPA, businesses can free up internal resources, optimize operations, and concentrate on their core competencies.

As the business landscape evolves, working with a TPA becomes a more strategically appealing option for companies seeking to gain operational efficiencies.

SEB is Canada’s leader in providing benefits administration solutions to over 400,000 plan members from Canadian companies. You can check out the full suite of SEB’s TPA solutions here.