what is a tpa

A Third-Party Administrator (TPA) is an organization or individual that handles the claims, processing, and reporting components of insurance or employee benefit plans for a separate entity. TPAs provide operational services such as claims processing, employee benefits management, and administrative services for self-insured health plans under contract to another company. They can also administer other services such as underwriting, customer service, and regulatory compliance activities. TPAs are commonly used by insurance companies, self-insured companies, and employers with self-funded health care plans to outsource the administration of claims processing and other day-to-day operational services. They play a crucial role in the insurance and health care industries, helping to save costs, manage risks, and ensure compliance with regulations