In this article, we interviewed Professional Liability Broker, Paul Hacker on the topic of Third-Party Administrators and assisting them with Professional, Management and Cyber Liability Solutions. Paul gets into detail below about how he recently helped a Southeast TPA. Book a Meeting with Paul Hacker here.
Paul, we know that you specialize in working with TPA’s, can you tell us what a TPA is?
A Third-Party Administrator (TPA) processes claims for their self-insured clients. A TPA can administer medical/hospital/dental/Rx, pension, disability, Workers Comp, and HRA/HSAs. Each TPA in all of these market segments need E&O, Surety/Fidelity Bonds (and each state has different requirements for TPAs), Fiduciary Insurance, D&O/EPLI, and Cyber Insurance.
What current trends do you see for the TPA market?
TPA's are alive and well and continue to expand their membership in the medical/hospital/Rx arena. This growth is due to more and more employers and Unions electing self-insurance since the premiums for fully insured plans continue to increase exponentially.
What type of TPA client did you help?
I met a medical/hospital/Rx TPA at the last SIIA conference in San Francisco. The TPA is in North Carolina. They are in the process of contracting with employers to be their TPA for their medical and hospital plan. Since 2020 is their first year of operation where they will be administering medical/hospital and Rx plans for their clients, there is a tremendous number of items they need to tackle in order to be a TAP. Depending on the state, there are requirements such as a Surety Bond or a Fidelity Bond. The definition of bonds is as follows:
A Surety Bond or surety is a promise by a surety or guarantor to pay one party a certain amount if a second party fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation. A fidelity bond is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
Axis Insurance Services, LLC is here to provide D&O, E&O, Fiduciary Insurance, EPLI, Crime, and Cyber Insurance for the entire TPA market. We can also help TPA’s meet their state by state requirements and mitigate their losses.
Download our TPA Informational Sheet to learn more.
