Third Party Administrators (TPAs) Provide Various Administrative Services to Health

question 59

Multiple Choice

Third party administrators (TPAs) provide various administrative services to health plans or groups that provide health benefit plans to their employees or members. Many state laws that regulate TPAs are based on the NAIC Third Party Administrator Model Statute. One provision of the TPA Model Law is that it

• A) Prohibits TPAs from performing insurance functions such as underwriting and claims processing
• B) Prohibits TPAs from entering into an agreement under which the amount of the TPA's compensation is based on the amount of premium or charges the TPA collects
• C) Requires TPAs, upon the termination of a TPA agreement with a group, to immediately transfer all its records relating to the group to the new administrator
• D) Requires TPAs to notify the state insurance department immediately following any material change in the TPA's ownership or control

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