First of all, you may be wondering what exactly a Third Party Administrator does. A TPA works between employers and insurance providers to handle the administration of the company’s benefits plan. This can include all manner of services – processing claims, record-keeping, enrollment, and other responsibilities. So, why should an HR department outsource their benefits administration to a TPA? We have 3 good reasons, none of which require downsizing your HR department!
Especially now in the wake of the Affordable Care Act (ACA), the complexity of rules and regulations governing health care and financial planning require a more advanced level of expertise. Non-compliance can result in hefty fines if a company does not interpret the laws correctly. A TPA is equipped with extensive training and industry education that includes keeping up with all regulatory changes that could affect your company.
Outsourcing benefits to a TPA will inevitably free up more time for your HR department. It’s not about replacing HR staff; it’s about creating a partnership that allows HR to be more productive, more efficient, and more thorough. Not to mention there are potential savings your company could benefit from by participating in large group plans accessible through a TPA, e.g. Benefit Cooperatives.
Privacy and Security
One very important advantage of outsourcing is the protection of your employees’ privacy and guaranteeing the security of information through a HIPAA and SSAE-16 secure platform. Employee health and financial information are sensitive topics that can lead to feelings of discomfort in the workplace and even punitive risk if coworkers have access to those materials. If you have a neutral, outside Third Party Administrator handling their claims and account information, you can preserve that sense of privacy and avoid possible financial penalties.
Outsourcing benefits to a TPA is a straightforward way to ease the stress on a company’s HR department. It safeguards the employer’s best interests, as well as those of its employees, without sacrificing precious time and resources. To find out more about our benefits administration services, contact FBS for more information or request a demo of our online benefits enrollment system “THEbenefitsHUB.”