When it comes to managing employee benefit plans, many companies outsource the job to a third-party administrator (TPA). TPAs provide benefits administration services, specializing in designing, implementing, and managing employee benefit plans.
What Are Third Party Administrators (TPAs)?
A third-party administrator is a firm that specializes in designing, implementing, and managing employee benefit plans. TPAs typically have a staff of experienced benefits administrators who are familiar with the rules and regulations governing employee benefit plans.
Why Use a TPA?
There are a few reasons why companies choose to use a TPA to administer their employee benefit plans.
1. Saves You Time and Money
One big reason companies turn to TPAs is to save time and money. TPAs have the experience and expertise to design and administer employee benefit plans quickly and efficiently, saving you both time and money.
For example, for the Employee Family Administration Program (EFAP), a TPA will typically design and implement the plan within two weeks. This includes setting up employee accounts, notifying employees of their coverage, and enrolling employees in the plan. Click here for more info about EFAP.
2. TPAs Are Familiar with Rules and Regulations
Another reason companies use TPAs is because TPAs are familiar with the rules and regulations governing employee benefit plans. TPAs stay up-to-date on all the latest changes to the law, so you can be confident that your employee benefit plans comply with the latest regulations.
3. Provides Expertise and Support
Reputable TPAs, such as LifeWorks, also provide expertise and support administering employee benefit plans. They have experience designing and implementing plans, dealing with vendors, tracking expenses, and more.
This expertise and support can be invaluable when administering employee benefit plans. Go to this page to see other services from LifeWorks.
4. Reduces Your Liability
Another reason companies choose to use a TPA is to reduce their liability. When you outsource the administration of your employee benefit plans to a TPA, you are essentially transferring that responsibility to someone else. This can be helpful if you are not familiar with the rules and regulations governing employee benefit plans or do not have the time or resources to manage them yourself.
5. Better Service for Employees
When you use a TPA to administer your employee benefit plans, you also provide better service for your employees. TPAs have the knowledge and experience to help employees enroll in and understand their benefit plans. This can reduce the need for employee training and support that can save you time and money in the long run.
6. Helps You Comply with the Government’s Policies
When you use a TPA to administer your employee benefit plans, you can also comply with the government’s policies. TPAs are required to follow all federal and state laws when they administer employee benefit plans.
7. Makes Benefits Administration Easier
When you use a TPA to administer your employee benefit plans, you can also utilize their administrative services. TPAs can handle all of the paperwork and red tape associated with benefits administration, saving you a lot of time and hassle.
There are numerous reasons companies choose to use a TPA to administer their employee benefit plans. TPAs can save you time and money, reduce your liability, provide better employee service, and help you comply with the government’s policies.
If you are considering using a TPA to administer your employee benefit plans, be sure to research various TPAs to find one reputable and has experience in your industry. You should also ask for references from companies that have used TPAs in the past.