The TPAs have been dominant in supervising self-funded plans because:

  • Being local, accessible, service-oriented, and entrepreneurial by nature, they bond with employers

  • They offer one-stop service (consulting, claims and recordkeeping, managed care options, e.g.)

  • They are independent from the stop-loss carrier.

TPAs are generally characterized as being quick to adapt, reasonable in price, attentive to good service, and able to offer a broad range of products and services.

TPAs typically have dominated the small-medium plan market while insurer-administrators have dominated the large plan market. TPAs who supervise the small-medium plans typically offer both (a) consulting and risk management services as well as (b) claims and record-keeping services. As the plan size increases, these two primary functions are split with (a) going to a large consulting firm and (b) going to either an insurer or an administrative-service-only TPA.