Self-funded health plan: TPA vs ASO

TPAs may operate independent of health insurance companies, in such cases potentially offering more flexibility in plan structure and healthcare network providers. An ASO is typically a wholly-owned subsidiary of a health insurance company, which may limit your company’s provider network options to those available from the parent insurer.

Both can provide support for self-funded health plans. However, each serves a specific need. These two structures share some similarities but also differ in important ways:

Outside of that notable difference, TPAs and ASOs both provide services for your self-funded healthcare plan. For example, both may allow outsourcing of insurance claims processing and record keeping.

By partnering with a TPA, companies can often gain more coverage options as well as funding and reimbursement options. While TPA and ASOs may perform similar functions, the independent management of some TPAs versus the ASO as a subsidiary of a health insurer can make a difference in a plan’s network options.

TPAs have their benefits. Once you’ve chosen a plan structure, a TPA can provide support for the plan, streamlining the process for plan members.

                                                               

TPA vs ASO	TPA	ASO
Autonomy	A TPA may operate independent of insurance companies.	An ASO is typically a subsidiary of a health insurance company.
Networks	A TPA often offers several PPO networks to choose from.	An ASO is typically limited to provider networks from the parent insurer.
Service	A TPA can assist in a wide range of areas, including enhanced reporting.	An ASO typically has limited services it can provide.