What is a Third Party Administrator?

What exactly is a third party administrator, or TPA? This kind of outside affiliate actually interacts with millions of employees every year. Want to learn more about this vital workplace service provider? Read on as we cover the basics of today’s third party administrator.

TPAs Explained

Third party administration is the use of a third party, or outside service in the handling of certain employee affairs and benefits. Many businesses, organizations, and even government agencies use the services of TPA providers in:

  • administering employee pay
  • miscellaneous benefits
  • insurance
  • in some cases, even injured worker claims

One might rightly wonder why a company might earmark such responsibilities to an outside service rather than handling them from within. There are several reasons for such external delegations of internal affairs. First, many companies just don’t wish to deal with the added responsibility of handling such employee affairs. They can instead hire a company specializing in this area to do just that, leaving them free to focus on more core company concerns.

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Second, when an outside company provides the administration of such benefits and pay, the concern of partiality in these areas is eliminated. Employees and their advocates cannot claim wrongdoings of the employer in these areas as they are handled by an outside service. Reallocation of liability is after all, an essential, money-saving goal of all profit-driven establishments.

Examples of TPAs at Work

Having discussed the basic outlines of such services, let’s move on to illustrating TPAs via specific examples in the real world. Here are two great ones.

Safelite Auto Glass – ADP

Safelite Auto Glass is a nationally recognized automotive glass repair and replacement company. Established in 1947, this company has grown exponentially over the years. It’s now a major player in the industry. As a result of these successes, it now has thousands of employees.

Recently, the company decided to appropriate the management of employee benefits and such services to ADP, a renowned figure in the world of TPAs. Now, Safelite employees throughout the company go through ADP for all of their benefits and payroll needs. In addition to these provisions, Safelite employees visiting the ADP website can also find relevant Safelite news and other bulletins in the convenience of the same place.

Red Roof Inn – Mangrove Software

Red Roof Inn is a notable figure in the hospitality world, and more specifically, the hotel industry. This company also sends the handling of its massive workforce’s benefits and compensation to an outside TPA. Mangrove Software is the provider of choice for Red Roof Inn and its employees. Here, employees can manage:

  • vacation
  • sick time
  • compensation records
  • insurance arrangements, and
  • more

As in all such arrangements, Red Roof Inn is freed from these duties and their accompanying liabilities in exchange for the contracted service of its TPA Mangrove Software.

TPAs are a great way for companies, organizations, and even government entities to manage their employee compensation packages from a reasonable and often, safer distance. Such services are in fact used to the tune of serving the needs of millions of employees across the country each year. These are the basics of today’s third party administrator and the many affected by them daily.