Are Your TPAs Meeting Fiduciary Standards? A Compliance Checklist

Feb 11
2 min read

Are your TPAs creating Fiduciary Risk for Self-Funded Plans?

Employers who sponsor self-funded health plans have a fiduciary duty under ERISA—to act solely in the interest of participants, prudently manage plan assets, ensure every dollar paid is fully disclosed, maintain transparency, and avoid contracts with “gag clauses” that create conflicts of interest.

But what happens when your third-party administrator (TPA) falls short?

Courts have made it clear that fiduciaries cannot outsource their responsibility. If your TPA mismanages claims, hides fees, or engages in conflicted practices, liability ultimately rests with you. That’s why sponsors must hold TPAs accountable and document oversight.

Here’s a practical compliance checklist for evaluating whether your TPA is meeting fiduciary standards.

✅ TPA Fiduciary Standards Compliance Checklist

1. Fee Transparency

Does the TPA disclose all administrative fees, shared savings, and network markups?
Are vendor contracts reviewed for hidden or indirect compensation?

2. Claims Accuracy

Is the TPA independently reviewed for payment accuracy?
How are errors corrected — and who benefits from recoveries?

3. Data Access

Do you receive full access to raw claims and recovery data?
Are there limits or delays that restrict oversight?

4. Conflicts of Interest

Does the TPA profit from errors through post-pay “savings” programs?
Are cross-plan offsets used to recover overpayments from other employers’ plans?
Are the contracts you have with your vendors devoid of “gag clauses?”

5. Fiduciary Process Documentation

Have you established a Fiduciary process and team?
Are monitoring activities (audits, benchmarks, reviews) documented?
Can you demonstrate prudence if challenged by regulators or participants?
You don’t have to be perfect, but you have to demonstrate a “good faith” effort.

🔒 Why It Matters

ERISA Liability – Employers can be held responsible for TPA mismanagement.
Plan Assets at Risk – Every hidden fee or misapplied recovery is participant money.
Regulatory Scrutiny – The Department of Labor and courts are increasingly focused on fiduciary standards in healthcare, just as they did with 401(k) plans.

💡 The ClaimInformatics Advantage

At ClaimInformatics, we provide independent oversight to ensure your TPAs meet fiduciary expectations. We help plan sponsors:

Review claims for accuracy and compliance.
Identify hidden fees and recover lost dollars.
Document fiduciary monitoring to reduce liability.

Bottom line: You can delegate administration, but not fiduciary responsibility. Use this checklist to hold your TPAs accountable — and protect your plan.