Third-Party Administrator (TPA) in Group Health Insurance

When a third party is involved in administering an insurance policy, they are called a third-party administrator. As the name suggests, this entity is neither the insurance provider nor the policyholder; it is a third party!

A TPA is a person or organisation that is licensed by the Insurance Regulatory and Development Authority of India (IRDAI). This entity is responsible for the administrative procedures of a policy.

How does this entity function with regard to a group health policy?

A health insurance TPA, the entity that oversees the administration of health insurance, can work in the group health insurance sector.

What should come under the administration of the TPA entities?

TPA usually moderates, regulates, and administers the claim settlement process between the insurance providers and policyholders. These administrators play a pivotal role in the day-to-day management of these group health policies.

We can refer to these entities as intermediaries or mediators between the insurer, insured, and hospitals. It is their basic duty to guide the insurance company by keeping track of all documents and judging the relevance of the policy for a given policyholder. This procedure helps the companies to offer the policyholders with rightful services.

Why is a third-party administrator in medical insurance, especially group medical insurance necessary? Let us see!

Claim processing is one of the most tiring tasks in health insurance, or any insurance, for that matter!

With health insurance, the intensity of the need to settle the claim is high and the speed of the administration is the same. It can become a hassle for the policyholder to go through the entire process all alone, and even for the insurance company.

With TPA, claim processing becomes easier!

TPA ensures that all the issues and queries regarding claim settlement are answered. They verify the claim’s validity, the policy’s status, and other important details regarding the insured and insurer.

The IRDAI introduced a mandate stating that every insurance company should appoint a third-party administrator and offer the policyholders the right to choose one among the enlisted entities.

The company that purchases the group health insurance chooses the administrator they find is the best. If they choose not to appoint an administrator for their employee health benefit policy, their workload increases and no one wants that. In this next section, we will understand what is the role of third-party administrators.

Claim Settlement Process

The first and most important duty of the third-party administrator is to offer hassle-free claim settlement to policyholders. The administrator is the link between the insurer, the insured, and the hospital. The administrator handles the claims settlement process on behalf of the insurance company.

Data Management

Administrators also manage data. They collect and analyse data related to claims, the utility pattern of claims, and healthcare costs. This offers useful insights to companies, enabling them to make informed decisions.

ID Cards

TPA also offers ID cards and unique identification numbers to the patients in order to make the process seamless.

Customer Support

The TPA is also responsible for offering 24/7 customer support services. As mediators and the link between all the direct parties, they become the primary point of contact for the insurance policyholder. They are supposed to address inquiries, resolve issues, and offer assistance regarding policy coverage.

Network Management

In the past, TPAs performed services like verifying that the chosen hospital was on the insurance company’s network list. However, this is not necessary anymore. Instead, they offer utilisation reviews. These reviews offer insights into the appropriateness and necessity of healthcare services provided under the claimed cost.

• Patient ID card provision

• Hassle-free claim settlement procedure

• Employers do not have to keep track of policy details

• Administration processes become seamless and streamlined

• Assistance regarding documentation and procedures

• Chances of miscommunications and delays in contact

• Lack of control over the process for both the insured and insurer

• TPAs and insurance companies might have distinct and unique processes that do not match with each other, creating issues.

• Increased dependency on TPAs can affect the customer experience of a particular insurance company

• TPAs and the policyholder might experience a conflict of interest.

• TPAs might prove to be problematic or incompatible with the client

As a policyholder, if you feel the need to change or cancel the third-party administrator entity, you can do that! There can be various reasons behind your decision for this change or cancellation. It becomes easy to cancel or change the third-party administrator at the time of policy renewal.

• First, you need to notify the insurance company about the cancellation initiation. You can initiate the procedure directly with the TPA organisation, but it is considered good practice to contact your insurer first.

• You will have to provide all the necessary documentation, policy details, and policy ID cars and numbers to the company. The insurance company will transfer the details to the respective TPA.

• Once that is done, you will have to provide a reason for cancellation.

• You will be appointed another TPA or will have no TPA, according to your preference. The company will keep the offer open for both possibilities.

Buying an employee health benefit plan is a norm in today’s work culture. Getting the best possible plan that can offer all-inclusive benefits is paramount. Without that, the policy can be burdensome to both employers and employees.

With Tata AIG, you can get an excellent group mediclaim policy that fulfils all of the necessities related to your employees and small-scale business, including hospitalisation expenses, family coverage, maternity and baby expenses, and more.

Every business, regardless of its scale and size, benefits from buying business insurance in India. The policy can benefit the business by protecting its operations, assets and employees!

Looking at the vast scope of a group health insurance policy, employers will eventually seek the help of third-party administrators. These entities stand as indispensable partners that help solve intricate complexities of group mediclaim policies.

This exploration has helped us uncover the vital functions of these assistants, who work behind the scenes for insurance companies and policyholders. Their expertise and knowledge help us swim the vast ocean of possibilities when it comes to claim settlements.

The complex process becomes easy and streamlined, thanks to third-party administrators, and that is why we need these entities in the group health insurance structure.

Can I change the TPA for my group health insurance?

Sure! You will have to contact your policy providers at the time of policy renewal and let them know about the change in decision. The agents and customer support will walk you through the entire process.

Does the third party have any say in the claim settlement acceptance or rejection decision?

No! Third-party administrators are only responsible for overlooking the management of the claim settlement process.

Who works as TPAs in health insurance?

TPAs are seasoned professionals who are certified by the Insurance Regulatory and Development Authority in India. Their professions can include doctors, consultants, IT professionals, lawyers, etc.

Can one TPA work with multiple insurance companies?

Yes! Since the third-party administrators are third parties to the insurance company and have no professional connection with the policyholders, they are not bound to work under a certain organisation. These entities can work with multiple insurance companies as TPAs at the same time.