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What an employer should expect from their third-party administrator

Written on May 1, 2020

Employers rely on third party administrators (TPAs) to be their experts in analyzing and quickly grasping the implication of new workers’ compensation rules, regulations and programs. Your third party administrator should be viewed as part of your team, which comes with the same expectations for performance, quality and results that exist for any of your direct reports. Use appropriate due diligence when making your selection comparing not only price, but reputation, history, type of services and their results. 

What type of TPA should an employer partner with? First and foremost, ensure that the TPA is full‐service. There are a fair number of organizations that refer to themselves as full‐service that are not. A true full‐service firm provides claims management, cost containment solutions, administration of alternative rating / premium discount programs, rating and actuarial services as well as hearing representation for the employer before the Ohio Industrial Commission (IC) and Bureau of Workers’ Compensation (BWC). None of these services should be outsourced to another organization.

What is the reputation of the TPA and how can it be validated? You can learn a lot about a TPA from the references that they provide, but there are other ways to learn about their services. Ask for information on their results such as settlements obtained, handicap reimbursements awarded, refunds generated from group performance, experience rates of their clients, etc. Also, speak to their business partners. In particular in Ohio, many TPAs work with trade associations such as The Ohio Society of CPAs that could provide a tremendous amount of feedback about their products and services. Your peers in the industry could also be a valuable resource. Ask which TPA their organization has selected and the reasons for their choice.

What type of training and educational opportunities might a TPA offer? A full‐service organization should offer training opportunities in the area of workers’ compensation and safety. Look for topics related to the management of claims, return‐to‐work strategies, premium rate calculation, programs impacting premium, safety best practices and industry issues so that you and your team are kept abreast of all matters impacting workers’ compensation today. Ideally, training should also be offered via different media, and cover multiple positions such as employee level, supervisor and management training.

Should a TPA have the personnel to offer consultative support? If your organization is like many today, the person in charge of workers’ compensation most likely wears many other hats. It’s not realistic to be an expert in all matters concerning workers’ compensation if this is the case. This is where a full‐service TPA can assist your company and bring an overall peace of mind that they are always a step ahead on making the right decision for both your injured worker as well as your bottom line. Consultative support should come from all levels of the TPA and be consistent and thorough.

About the author: Rejeana Woolum‐Napier is the client services representative at CompManagement working with the Ohio Society of CPAs and their members. Learn more at www.compmgt.com or contact Rejeana at Rejeana.Woolum‐Napier@sedgwick.com.

CompManagement is the OSCPA’s workers’ compensation administrator for their group rating program in Ohio. This OSCPA member benefit offers a discount off your annual premium ranging from 20% to the maximum allowed by the Bureau of Workers’ Compensation which has been 53% for the last several years. The next enrollment deadline is November 19, 2018 for the 2019 policy year (July 1, 2019 – June 30, 2020).