Which entity typically utilizes a third-party administrator (TPA)?

The correct answer is associated with self-insured employers managing employee health benefits. These entities often outsource the administration of their health benefits to a third-party administrator. This arrangement allows self-insured employers to leverage the expertise and resources of the TPA to efficiently handle claims processing, member services, and compliance with regulations without directly managing all of those complexities themselves.

Self-insured employers take on the financial risk associated with providing health benefits to their employees and typically benefit from using a TPA to access a broader network of healthcare providers and streamlined services. The TPA manages day-to-day operations, which helps the employer focus on core business activities while still providing comprehensive benefits to employees.

In contrast, individuals purchasing health insurance usually do so directly through carriers or brokers and would not typically engage a TPA. Government agencies regulate health insurance but do not act as TPAs themselves, while insurance companies may utilize TPAs, but primarily self-insured employers are the quintessential users of these services given their specific needs for benefit management.