Third Party Administration

What Does Third Party Administration Mean?

A third-party administrator (TPA) is a company often hired by employers to handle certain administrative responsibilities. Employers engage these firms to reduce their workload. The responsibilities managed by TPAs may include risk management, claims administration, loss control, and various other tasks. TPAs are especially common in workers’ compensation claims, where many employers outsource claim handling and return-to-work coordination to firms that specialize in that kind of work.

Insuranceopedia Explains Third Party Administration

It often makes more sense for companies to hire third-party administration firms than to handle all administrative responsibilities themselves. These firms specialize in managing insurance policies and frequently act as intermediaries between the insurer and the company. By outsourcing the administration of insurance policies to third-party administrators, companies can focus on other priorities, such as increasing profits and managing other important 7uaspects of their operations. Setting up this kind of arrangement is a common part of how companies structure their overall business insurance program, since in-house staff can stay focused on running the business while the TPA handles paperwork and vendor coordination.