Small Business Glossary and Definitions

A Third-Party Administrator (TPA) is when a company contracts with a second organization to provide administrative tasks for employee benefit plans. Insurance companies sometimes use TPAs as well to manage claims or processing. Employee benefit plans for insurance, retirement, or special accounts can be complicated and time consuming to process. Hiring a TPA can outsource these tasks to a specialist for better management or to reduce risks in offering employee benefits, and can also lower the cost of providing these plans.