In any service industry, there\u2019s a wide range of quality and pricing. People often tell me I focus too much on third-party administrators (TPAs), but that\u2019s where I\u2019ve spent a lot of my career\u2014as an ERISA attorney and former TPA employee. I know the business inside and out.<\/p>\n
I get asked all the time, \u201cAry, do you work as a TPA too?\u201d My answer is always no\u2014and it\u2019s simple: I respect the work TPAs do way too much to jump into their lane. It\u2019s not just about pushing paper; it\u2019s complicated, and it requires real expertise. The good ones get too little credit and too much blame.<\/p>\n
What I see, time and again, is a huge difference in service quality\u2014far beyond just price. Take one of my clients, for example: stuck with a TPA that\u2019s really just an insurance company in disguise. They sold the client life insurance policies the company couldn\u2019t afford and set up a \u201cspecial\u201d sub-trust that the IRS no longer recognizes as special. That\u2019s not administration\u2014that\u2019s selling snake oil.<\/p>\n
Now the client is trying to get out of a plan that\u2019s a half million dollars underwater. A new TPA who actually knows their business took one look and said, \u201cThis should have been wound down years ago. Why didn\u2019t the old TPA tell you that?\u201d Well, because the old TPA wasn\u2019t really in the administration business\u2014they were in the insurance sales business. And terminated plans don\u2019t pay fees or premiums, so it\u2019s no surprise they dragged their feet.<\/p>\n
When it comes to choosing a TPA, price matters. But it\u2019s service quality that makes or breaks the whole deal. A cheap TPA who can\u2019t\u2014or won\u2019t\u2014give you honest, proactive advice will cost you more in the end. The right TPA is a partner, a trusted advisor who knows ERISA, knows your plan, and is looking out for your best interest.<\/p>\n
That\u2019s why I focus on the good TPAs, and why I don\u2019t try to be one myself. Let the experts handle their side of the business\u2014and hold them accountable.<\/p>\n
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