Amid Uncertainty in Health Care, the Forecast for Self-Funding with an Independent TPA Remains Very Positive

The 2018 Forecast for TPAs & Self-Funding, recently released by the Society of Professional Benefit Administrators (SPBA), expects factors to fuel continued growth and expansion by TPAs and self-funded health benefit plans in the coming year. The most significant of these factors is a growing demand by today’s workforce for more personalized benefit offerings that help enhance the well-being of younger workers. Fred Hunt, past President of SPBA, describes independent TPAs as creative, flexible and well positioned to respond to rapidly changing needs of plan sponsors and their employees.

A Trusted Authority on Self-Funding

“As an independent TPA with 40 years of experience, Diversified Group has helped thousands of companies enjoy the flexibility and financial control that a partially self-funded health plan can provide,” stated Brooks Goodison, President of Diversified Group. “Our firm is a long-standing member of SPBA because of Fred Hunt’s experience and the unique vantage point the organization provides to the self-funded marketplace.”

As the need for customization and relevant plan data continues to grow, the Diversified Group of companies are uniquely qualified to help employer groups avoid the limitations and rising costs common to off-the-shelf, fully-insured plans. Let our experience in self-funding provide your solution to health benefits.

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SPBA Releases Industry Update & 2018 Forecast for TPAs & Self-Funding

The article below was published on October 17, 2017 by PRWEB, written by Chevy Chase, MD.

The Society of Professional Benefit Administrators (SPBA) has released its State of the TPA Industry & Forecast for 2018. Developed annually for the last 37 years, this report shares current happenings in health benefits and self-funding along with projections for the future.

dgb-spba-blogIn preparing for the year ahead, the Society of Professional Benefit Administrators (SPBA) has released its State of the TPA Industry & Forecast for 2018.

Fred Hunt, SPBA’s active past president, has been writing this report annually for the past 37 years with the intent to shed light on what is happening with third party administrators (TPAs) and the self-funded industry.

As with years past, the 2018 Forecast shares a candid perspective on current issues affecting the health benefits landscape as well as projections for the future. In it, Hunt describes the state of the TPA industry as “very good” amid the uncertainty in health care regulation the U.S. is facing and the ever-changing compliance requirements.

Some of his main projections include:

  • TPA growth – TPAs are positioned for a growth expansion as employers will continue to move to self-funding for the ability to design and fully customize health plans that fit their specific work populations.
  • State-level health care – With solutions for health care being debated, there will be more interest in exploring a state-centric approach as the 2018 Congressional and 2020 Presidential elections draw closer. Education will become key as careful consideration must be taken to address the many complications that would arise for the large number of companies with multi-state operations and plan participants.
  • Increase in “well-being” services – Employees will be looking for more benefits that enhance their well-being – things like wellness solutions (whole health and niche), student loan assistance, pension management, work-schedule management, etc. They will also rely on employers for help in overseeing these solutions.

“Fred has become such a trusted source for these forecasts based on his many years of experience in the self-funded industry and the fact that he stays so well-connected to regulators, policymakers and TPAs,” explained Anne Lennan, SPBA president. “He has a unique vantage point as he sees what is happening with health benefits from so many different angles.”

In sharing the 2018 Forecast, SPBA also includes background on the history of self-funding, why these health plans have become so widely adopted among companies of all sizes and formats and how ERISA serves as the main source of regulation. It also provides definitions of TPAs, including comprehensive service, specialty, minimal, ASOs and TPAs-of-convenience.

“Year after year, these forecasts provide a helpful, insightful look at the big picture for TPAs and self-funding,” Lennan said. “SPBA is happy to make them available to the public.”

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Why employers should be thinking TPA

The article below was published on September 5, 2017 by Employee Benefit News, written by Arthur Jonokuchi.

When it comes to healthcare plan administration, ASOs (administrative services only) say they offer a big discount to self-funded plans. If you look closer, however, you’ll see that they actually do come with a cost, both monetarily and in terms of lack of flexibility.

ASO’s omnipresence would make you think they are the only game in town. The reality, however, is that a combination of a third party administrator, along with robust internal plan administration, can do everything and more than an ASO does.

Here are five benefits of working with a TPA.

Unbundling drives down rates. When you unbundle plans, you invite competition for medical, prescription, dental, vision, wellness, disease management and stop-loss plans, and plan administration. Employers can choose premium providers with the services at the best rates.

This is a very powerful advantage not only for your current plan choices, but also for future rate increases. Competition helps reduce future rate increases by improving your company’s negotiation leverage. The big insurance carriers would like you to think that bundling saves money, but that’s often a lot of smoke and mirrors. Yes, some of the plan will be competitively priced, but other parts may be excessively high; there is no transparency. Transparency encourages competitive pricing.

Claims analysis catches errors and excessive billing. We’ve all heard about the $100 Tylenol tablet that appears on hospital bills. A strong TPA will perform comprehensive claims analysis. It will catch billing errors and line items that are excessive, egregious and unnecessarily expensive and go back to the provider before paying. The Tylenol tablet can be just the tip of the iceberg; some of these charges can be tens of thousands of dollars more than they should be.

Claims adjudication. ASOs often pay claims without performing due diligence; this is referred to as auto-adjudication. When ASOs occasionally go back and audit payments to doctors and hospitals, they keep a portion of the recovered amount. So they first overpay, then they keep some of the overpayment. But employers end up paying. As impartial third parties, TPAs will review large bills for accuracy. It is part of their service to contest bills that appear out of line and save the employer money, which could add up to six figures or more.

Cost containment through data analysis. For all the money that you pay an ASO, you would think that you get to own your own data. But think again. Information is power and, despite ERISA regulations, ASOs are not into sharing. In contrast, with a TPA, the employer owns the plan and member-level claims data.

When you own your data, your company can measure claims activity, such as top diagnoses and high claimants, evaluate preventative care and routine exam usage, make more informed decisions about plan strategy, develop better financial models and forecasts, and compare your company’s activity to industry and regional benchmarks.

Increased plan flexibility. ASOs limit clients to their own carrier’s plans. Large carriers can and often do curtail offerings to pre-defined plan options. What makes it easier for them doesn’t necessarily make it right for your company. With a TPA, you get to pick the best providers with the services that are right for your company and employees.

A strong TPA can make all the difference in how your self-funded healthcare benefit program is managed. It will make the difference in employee satisfaction, cost savings and quality service.

Don’t be misled by what appears to be bundled discounts. Dig deeper and you will see that savings is a relative term. Once you take apart the pieces and competitively price each service plan, you see that the parts add up to a lot less than what you are being charged for. TPAs offer savings and flexibility, transparency and objectivity. Isn’t that what you want for your company and employees?

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