I am a licensed Health and Life producer in AZ. I was working for a TPA that went out of business. I have been asked by a client to continue processing their HRA and FSA claims until the plan year end as I am familiar with the procedures. I am having trouble determining the legalities and requirements of doing this job on an independent contractor basis. The state insurance board claims that there are no requirements for a self funded plan as stated under AZ statute 20-485. Can someone confirm?
Thank you.

While self insured health plans are not usually state regulated but DOL regulated, most states require that TPAs be registered or licensed. What are your state requirements for TPAs?

There is also the issue of Liability insurance since ERISA and self insured plans administration is not usually covered under your E&O.

Because of the cost of this insurance and the state requirements, I would suggest that you help them select a TPA instead.

By the way, how do you propose to do this claims adjudication? By hand? Or will you have to buy software? Who will be trained to use it? What will you pay them? You might find that doing it will not be profitable.

How about HIPAA privacy issues? Are you equipped?

We still have a contract with the claims processing software company which will take up pretty much to the end of the plan year. I was trained on this software anyway, even though that was not my main job requirement. No extra processors would be required, I can handle the claims load myself. I also have had a fair bit of training on HIPAA through EBIA, and feel pretty confident I can comply with all regs, it is more the licensing and bonding issues that I am unclear of. I would like to finish this project out, but do want to ensure we are doing it properly and this is a strange situation.

I have a relationship with a TPA in CA that I used to work with, I may be able to work a deal with them to run through them if that makes things easier.

All good questions and suggestions. I will hopefully have it worked out by the end of the week. Any input is appreciated.