Articles | February 10, 2020
The right third party administrator (TPA) provides the expertise and staffing that allows the machinery of your benefits programs to run smoothly and efficiently. Finding the TPA that matches your needs can take a lot of effort, but you’ll make things immensely easier by nailing your request for proposal (RFP).
The right TPA for your organization won’t just show up in your office, so you need to make sure your RFP spells out exactly what your requirements are in order to avoid proposals that do not meet your needs. In addition, you don’t want to have any surprise fees down the road.
Issuing an RFP to qualified TPAs which fails to address the important (but often overlooked) needs of the plan sponsor-TPA relationship can lead to surprises. It can also lead to additional costs and fees that could have been avoided in the first place.
Other reasons why issuing a well-conceived RFP helps your plan:
• Allowing the plan to scan the vendor market in a meaningful way. There are many high quality TPAs but not everyone is right for every organization
• Giving the plan the opportunity to make an “apples to apples” comparison of the vendors
• Helping the plan select a TPA that best meets your requirements or the scope of services you are seeking
• Aiding you when negotiating a contract that has the appropriate performance guarantees and service level agreements (SLAs)
While you’ll need to go into greater detail regarding the specific requirements of your plan, we recommend you include the following in your RFP:
• All requirements of the plan that a TPA must comply with
• Service levels and performance guarantees that set expectations for the TPA
• All start-up and ongoing fees
• Current and future supporting technology utilized by the TPA
• Ownership structure
• Any out-of-scope services and the cost of those services
• Information about the TPA, references, staffing levels, and services to be performed
• Implementation and transition timelines
Even though the above helps you determine what you should include in the RFP, you still need to make value judgements specific to your organization and benefits plan. For example, how do you determine what service levels and performance guarantees are appropriate? What about their fee structure? What metrics will you put in place to hold the TPA accountable?
Finding the right TPA can help your operations run smoothly and enhance member satisfaction, so it makes sense to get the help of experienced professionals when it comes to drafting the RFP that is tailored to your needs. Our team will work with you to understand your benefits needs, and will make sure you develop and issue an RFP that will provide you the information you need to make a well-informed decision. Once you have selected a TPA, we can also assist you with the transition process to ensure everything is in place and meets your expectations.
Some of the ways we can help include:
● Drafting a thorough RFP to vendors that meets your administrative requirements
● Evaluating RFP responses and identifying which vendors best meet your requirements
● Benchmarking the proposed fees against similar clients to ensure the plan is receiving fair and accurate pricing for the services
● Working with plan counsel to help ensure that the plan enters into a contract that contains service level and performance guarantees that are right for you
● Providing implementation oversight to ensure a smooth transition to the selected TPA
Our team has helped hundreds of organizations find TPAs for a variety of benefits plans. These TPAs in turn have helped our clients administer their retirement and health benefits and provide quality member services. Reach out and we’ll get to work finding the right TPA for your organization.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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