For decades, TPAs have been the norm in the United States, but not so common in Canada. Many employers in Canada simply did not know how to access the TPA market. But all that has changed. Canadian TPAs are now eclipsing the “direct to one insurer” model – one group at a time.
TPAs provide flexibility and empower employers to be better consumers through:
Power of change
In the single insurer model, moving from one insurer to another can be a massive disruption to HR, Finance and plan members. Implementing a new provider can take up to a year and create employee communication headaches, administrative errors and billing mistakes. For these reasons, employers are hesitant to change insurers, even when rates go up. This is where the real power of the TPA model emerges, because once an employer enlists a TPA, the game completely changes. Because the employer is being billed and served by the TPA, they can change insurers easily for any one or all lines of benefit, without any disruption to their operations.
More product options
Insurers may only offer one or two options for benefits like Stop Loss and Travel coverages. With a TPA, the employers’ options are no longer limited. While an insurer may only offer a $15,000 per individual Stop Loss for health and prescription drugs, a TPA can offer the employer almost limitless options for a wide range of innovative Stop Loss products from many different providers. This helps the employer make better risk management decisions, and simply offers more choice.
TPAs are making big investments in the employee experience, features including cloud claiming, smartphone apps, employee intranets, enrollment engines, and integrating your group benefits and wellness plans.
When selecting a TPA, it’s important to look at critical factors, like the number of insurers available through the TPA, the number of employer groups served, their geographic location(s), employee count and number of years in business. Not sure how to find a TPA? A good place to start is the Third Party Administrators’ Association of Canada (TPAAC) website.