Context: Third-party administrators (TPAs) play a critical role in how corporate risk teams manage insurance claims tied to programs like workers’ compensation (WC), general liability (GL) and auto. Primarily used by large corporates with self-insured retention (SIR), TPAs handle day-to-day claims administration—processing paperwork, interacting with injured employees or third parties, coordinating with legal and insurance teams and ensuring claims are paid (or challenged) appropriately.
While TPAs don’t underwrite insurance or assume financial risk, choosing the right one can reduce friction, improve reporting and prevent delays in high-stakes or high-volume claim environments. Corporate HR and benefits teams also often use TPAs to administer employee health plans and manage medical claims and provider networks.
In a recent exchange among members of NeuGroup for Insurance and Risk, one treasurer planning an RFP for a new TPA asked peers for recommendations and insights on the process. A number of responses came from companies in the life sciences sector, some of which employ in-house medical staff, giving them direct involvement in workers’ compensation triage and claim filing.
Member question: “Have you had a recent positive experience with a third-party administrator (TPA)? Would you recommend them? Who else would you suggest? My company is planning an RFP this year for its TPA.”
Peer answer 1: “CorVel is our TPA for WC, GL and auto. We went through an RFP in 2022 and are in the process of negotiating renewal terms with CorVel for another three-year engagement.”
Peer answer 2: “We have used Broadspire for many years and can recommend it as it has done a good job for us. Regardless of the TPA that is chosen, one needs to carefully monitor and oversee the TPA so that your claims are getting the attention they deserve.”
Peer answer 3: “As part of your RFP, I would recommend dedicating time to thoroughly evaluate the implementation process. We conducted an RFP and transitioned to a new service provider. Reflecting on that experience, I believe our prior inefficiencies were self-inflicted. We previously got stuck on thinking, ‘This is how we have always done it,’ and our internal teams became more disconnected with the TPA as people transitioned to new roles. “I can say we are at a good spot and have no complaints, since we made some adjustment as follows:
- “Our occupational health team files workers’ compensation claims as part of in-house nurse triage.
- “A separate incident intake vendor would file a liability claim directly to our TPA.
- “We established a good claim escalation process between claims handlers, corporate insurance and legal.
- “Our invoicing process includes intake, payment and how much we receive monthly/quarterly.
“I think all TPAs could be good or bad, and having a good account executive helps when a fix is needed.”
Peer answer 4: “The question didn’t indicate what the TPA would be used for. We have several TPAs (GB, ESIS, TRISTAR) for various programs, which isn’t optimal, but we do it for legacy purposes. - A couple of my takeaways on our U.S. workers’ compensation/disability benefits RFP was the distinction between designated or dedicated adjusters, and if there is a level of customization your company requires. Not all TPAs manage this in the same way. It’s a high-turnover, low-margin service industry, so oversight is important.”
Peer answer 5: “This is perfect timing for us as we are considering a TPA for the first time. We are being recommended ESIS for the product line. We will need the TPA for reporting purposes mostly as we are converting to an SIR from a deductible. We do not have a lot of activity.
- “I like the sound of a centralized structure with one TPA like Peer 2’s recommendation of Broadspire. Peer 4’s response that multiple isn’t optimal seems to support that theory as well. Can I get a consensus that centralizing it all under one TPA is the way to go? Should the TPA be independent of any underwriters in the coverage tower?”
- Peer 2 response: “I would just add that some insurers are ‘bundled’ insurers, meaning they may require you to use their TPA. I think most are now ‘unbundled,’ but it is something to be aware of. In addition, centralizing the TPA makes sense for lines of coverage that could potentially overlap like casualty, workers’ comp. and auto.
- “However, there may be other lines that are completely separate, and in that case, you could go with a separate TPA. In our case, we only use a TPA for casualty, auto and WC—thus, it makes sense to have them all centralized with a single TPA.”
