Life is good. You have contracted with a third party administrator (or TPA) for your pre-tax benefit program. Time to move on to the next benefits crisis, right? But, then you start to realize not everything is as it seemed.
Lesson 1: There are generally two kinds of TPAs.
It is important to be aware of the type of TPA you are working with to understand if they are going to adequately address your business needs. Let’s start with some quick definitions. A self-funded TPA is primarily in the business of claims management. A self-funded TPA replaces the day-to-day management of claims if an employer chooses to be self-funded for health insurance options instead of fully insured. This TPA’s underlying goal is to manage payments on behalf of the employer. Alternatively, a pre-tax benefit TPA is primarily in the business of managing pre-tax accounts such as FSAs, HRAs, HSAs and commuter benefits. Because of this, a pre-tax benefit TPA is more focused on accessibility of funds. This ensures participants have the ability to pay for out-of-pocket expenses. Next, let’s take a closer look at what it really means to be TPA.
Lesson 2: Some “TPAs” are generalists, not specialists. Some are not “TPAs” at all.
As you evaluate pre-tax benefit providers, it is valuable to understand their primary business focus. You are likely to come across payroll vendors that bundle pre-tax services in with other services or insurance brokers that offer a “consolidated” approach to benefits management. You may even come across a few banks and 401K providers that have decided pre-tax benefit accounts would be a good way to diversify their business. When everything works flawlessly, these providers are capable of managing your benefit accounts. However, sometimes you need a little expertise. That is when having a pre-tax benefit TPA makes a difference.
A pre-tax benefit TPA will have more specialized knowledge to help you navigate legislative changes, plan compliance, and other escalated issues. Compare it to your health. When you are healthy, you might not see the need for a cardiologist. But, after you have a heart attack, you want to make sure you have the best cardiologist in your corner.
Finally, you’ll want to review a TPA’s approach to support.
Lesson 3: Approaches to support can vary widely
Different TPAs take different approaches to client and participant support. You will want to clearly understand the support you and your participants will receive. There are three common approaches:
- Assigned specialist or team. You have a go-to individual (or team) knowledgeable on your program and responsible for the day-to day management or oversight of it.
- Specialized employer support line. A support line staffed with individuals trained on employer program management and issue resolution.
- General support line. A support line staffed with individuals that are likely to have generalized knowledge on programs and may also be supporting other product lines.
Understanding the support levels you will receive may not be black and white. Often a TPA will have a different approach based on employer size. There is also the possibility that your support options will be conditional based on the system or platform in which you start your program. However, it is not a guarantee that these options will increase as your business grows or even as your needs change.
Participant support options are equally important. Do participants have a toll free support option? Are there representatives dedicated to pre-tax benefit support? What other products are representatives supporting? Are representatives employed by the TPA or is support outsourced? Where are support staff located?
A Partner that Cares.
Benefit Resource is committed to the management of pre-tax benefit accounts. We believe in personalized service. Every client, regardless of size, receives a specialist to manage their programs. In addition, our participant service representatives are solely focused on the support of pre-tax benefit accounts and COBRA administration. Our staff has an average tenure of over eight years in pre-tax benefits. We have individuals throughout the organization who are certified in flexible benefits and COBRA administration. Finally, our organization improves the usability of pre-tax benefits through active involvement in advocacy efforts.
If you are in need of a TPA for your pre-tax benefits, we would love to provide you with a competitive quote.