Should you ask yourself if your association plan management provider qualifies as TPA or ASO? Not necessarily. The name does not play as important a role as the qualifications and services of the organization. As we pointed out in this article, AsOs has its drawbacks with a single insurer and should be examined very carefully if one wants to use an independent TPA that works with several insurers. Sometimes, when investigating third-party administrative services (TPAs), associations come up against an entity called the “administrative services organization” (ASO) that provides services similar to a TPA. So what is the difference between a TPA and an ASO? Technically, there is no strong and fast distinction between the two. In some cases, a TPA and an ASO may offer the same services as: Most states have a licensing or registration requirement for third-party administrators. Any provider that provides these services (whether tPA or ASO) should have the corresponding licenses in the state or states where you wish to operate your association health plan. If you are considering the services of a TPA or ANO, you can contact your state`s Ministry of Insurance to inquire about registered claims for the company. You can also check for organization data in the Better Business Office. While we could link the above benefits with health insurers, a TPA or ASO can offer many of the same services of dental insurance, vision insurance, occupational disability insurance or even life insurance.
Many insurance companies do not want to allow employers to access their claims data. An ASO with a single insurer is probably a bad lawyer on behalf of a company that sees the strategic importance for analyzing that data, either on its own or through a third-party company. Similarly, ASO is unlikely to compare its insurer`s rates with those of other insurers when an ASO is limited to a single insurer. If your AHP is fully insured and you want to receive the most competitive rate proposals, you should consider a TPA that works with a large number of insurers that will receive competitive offers. A consulting firm that compares TPA costs against DenA`s costs said: “I have empirical data that says our independent third-party directors work 10% or 12% better than my ASO contracts with the same draft plan, claims and everything, because we are able to use top-notch price controls if an independent TPA allows us.” As noted in this article, there is no generally accepted distinction between TPA and ASO organizations. However, in practice, you can see significant differences between these organizations. According to the Society of Professional Benefit Administrators, ASOs are instead under the control of a parent insurance company.