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Features
Ref. No. KLI/22-23/E-BB/492
TPAs are registered organizations that administer insurance policies on behalf of insurance companies.
Imagine you have just been diagnosed with a health issue. Instead of focusing on the treatment or recovery plan, you are worried about the never-ending documentation and long queues you might have to wait in to file the insurance claim. That should be the last thing you want to worry about, right?
But what do you do in such a situation? Do you wait for magic to happen, or do you wonder if there is a way to simplify this process? To make life easier for you, a Third-Party Administrator (TPA) in health insurance comes into the picture.
Third Party Administrators (TPAs) provide administrative services for insurance companies, especially in the health insurance and employee benefits sectors. They act as intermediaries between the insurance provider and the insured parties. Insurance companies appoint Third Party Administrators (TPAs) to manage different types of individual insurance policies on their behalf.
TPAs are registered with IRDAI (Insurance Regulatory Development Authority of India). Insurance providers and policyholders are linked through TPAs, and they handle various aspects of health insurance, such as claims administration, premium billing, customer enrollment, and other day-to-day operations. They are responsible for maintaining high-quality, consistent services and managing a large number of claims.
TPA health insurance manages and processes insurance claims, handles policy administration, and facilitates the smooth functioning of policy management. Here are some more benefits to explore:
These administrators simplify the claims process by reducing processing time, managing documentation, and coordinating payments. They ensure timely and accurate settlement of claims, reducing delays and administrative burdens for insurers and policyholders.
TPA health insurance offers dedicated customer support, helps policyholders with their claims, and resolves issues more effectively, resulting in higher overall customer satisfaction.
Insurance companies control costs by managing claims and healthcare services, which can lead to more competitive premiums for policyholders with the help of third party organizations.
They bring specialized knowledge in handling complex claims and administrative processes of insurance policies, and this ensures compliance with regulatory requirements and industry standards.
Insurance companies can easily focus on their core operations by outsourcing administrative tasks to TPAs. It, therefore, results in increased efficiency and better service.
The Third Party Administrators offer various services provided by health insurance providers. However, specifics can vary based on the policy. Common coverage includes:
A Third Party Administrator plays an important role in health plan by managing the relationship between insurance companies and policyholders. Key responsibilities include:
It is the responsibility of Third Party Administrators to ensure that policy documents are submitted accurately and verified. They ensure the smooth settlement of insurance claims by processing them efficiently and accurately.
They manage policy details, including updates, renewals, and amendments, making administrative tasks easier for insurers and policyholders.
These administrations are also responsible for providing support services to policyholders by answering their questions, assisting them with claim-related issues, and ensuring a smooth customer experience.
Maintaining and managing a network of healthcare providers is important, along with facilitating cashless treatment options and ensuring that policyholders receive care at network hospitals.
These organizations serve as a link between the policyholder and the insurance company, collecting, managing, and analyzing claims and policyholder data to assist them in making informed decisions and improving service quality.
Ensuring that insurance processes and practices comply with regulatory standards, industry guidelines, and legal requirements is their responsibility.
TPAs and insurance providers work together but have a slight difference between them that is mentioned below:
| Purpose |
Third Party Administrator |
Insurance Provider |
| Role |
Acts as an intermediary between the insurance company and the policyholder. |
Insurance providers only provide insurance coverage to policyholders |
| Managing Claims |
Processes and settles insurance claims on behalf of the insurance company. |
Approves claims based on policy terms and conditions. |
| Issuing Policy |
Does not issue policies. |
Issues insurance policies. |
| Interacting With Customers |
Handles queries of customers related to claims. |
Handles policy issuance, renewals, and customer interactions. |
| Financial Risk |
It does not assume financial risk and operates on fees from insurance companies. |
Assumes financial risk associated with policyholder claims. |
| Regulatory Compliance |
Ensures that claims and administrative processes comply with regulations. |
Ensures overall compliance with insurance laws and regulations. |
| Managing Network |
Manages network hospitals and healthcare providers. |
Does not manage it networks directly. |
Third Party Administrators play important role in the health insurance industry. They handle various administrative functions on behalf of insurance companies.
Insurance companies appoint TPAs because they specialize in specific administrative functions like claims processing and customer service. This specialization ensures that these tasks are handled efficiently and in compliance with regulations.
TPAs make it easy for insurance companies to focus on their core functions. They offer assistance that can scale insurance companies’ services up or down based on the needs of their clients, making it easier for insurers and employers to respond to changing conditions.
TPAs are often well-versed in the complex regulatory environment. They help ensure that legal and regulatory requirements process claims and benefits.
These organizations specialize in handling the day-to-day processing of claims, which includes verifying eligibility, judging claims, and managing payments. This speeds up the process and minimizes errors.
They help insurance companies manage and analyze large amounts of claims, benefits, and data utilization. This helps provide valuable insights to policyholders that can improve their healthcare system and cost management.
TPA health insurance helps policyholders by:
If a policyholder feels like cancelling their TPA health insurance, they can contact their insurance companies. A few steps need to be followed to cancel TPA health insurance:
TPAs are essential in the health insurance industry because they simplify administrative tasks like claims processing, benefits management, and customer service, which can enhance efficiency and reduce costs for insurance companies and employers. Their expertise helps ensure compliance with regulations. They improve operational effectiveness and are an important asset when managing complex insurance processes.
While TPAs offer various benefits, they also come with several risks that lead to losses for both insurance companies and policyholders.
TPAs can be involved in fraudulent activities that can lead to losses for both the insurance company and policyholders.
TPAs handle sensitive personal and health information for policyholders, which puts them at risk if there are data breaches or if information is not properly protected.
If the TPA experiences operational issues, policyholders will face difficulties because they rely on the TPA for claims processing as well as the entire insurance policy process.
Poor communication between TPAs and their clients can lead to misunderstandings, delays, and inefficiencies.
1
To find out which TPA is associated with your health insurance policy, contact your insurance company and ask for the list of TPAs associated with them.
2
Yes, all the insurance companies use TPAs as they play an essential role in managing insurance policies on their behalf.
3
You can contact your TPA for a claim by emailing them or calling their toll-free mobile number.
4
The following documents are required for processing the claim by TPA:
5
You can select your own TPA when purchasing a health insurance policy. The only requirement is to choose from a list of TPAs associated with your insurance company.
6
The primary difference between a TPA and an insurance company is that an insurance company only provides insurance coverage to the policyholder, whereas TPAs manage policies on their behalf.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Ref. No. KLI/22-23/E-BB/2435
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
