Five Health-Plan Trends TPAs Should Evaluate at Renewal
A practical renewal checklist for third-party administrators: evaluate pharmacy costs, virtual care, funding, access and employee communication without relying on expired forecasts.
3 min read By Dustin Neider
Key Takeaways
- Replace expired forecasts with current plan claims and contract terms.
- Compare pharmacy costs net of fees and rebates on a consistent basis.
- Evaluate virtual care and networks for access as well as cost.
- Assign an owner and measurement period to each renewal change.
Employers using a third-party administrator should evaluate pharmacy spending, virtual care, funding risk, provider access and employee communication at renewal. A TPA administers contracted services; it does not automatically absorb the employer’s financial or compliance responsibilities. Ask for plan-specific evidence and written responsibilities before adopting a trend or changing the arrangement.
1. What is driving pharmacy spending?
Pharmacy spending reflects the medicines covered, utilization, member cost sharing and the contract’s fees and rebate terms. Employers should ask their TPA who supplies the pharmacy analysis and whether reported costs include all relevant charges and credits. National trends provide context but do not establish what is driving a particular group’s renewal.
Replace blanket predictions of falling drug costs with a review of the plan's own pharmacy experience. The 2025 KFF Employer Health Benefits Survey discusses employer concerns about GLP-1 utilization and spending; it does not establish a savings forecast for your group. Ask the pharmacy benefit manager for formulary changes, specialty-drug rules, rebate terms, administrative fees and member cost sharing. Compare net costs on the same basis and protect individual health information.
2. Is virtual care integrated with the health plan?
Virtual care is integrated when employees can understand its coverage, participating clinicians, charges and referral or follow-up arrangements within their health benefits. Employers should ask the TPA to demonstrate those pathways, including coordination with regular clinicians. Availability alone does not show that a service replaces an office visit or reduces total costs.
Evaluate appointments, follow-up, behavioral health access and referral paths, not a telemedicine market-size forecast. HHS explains the potential convenience of telehealth, including less travel, but suitability depends on the service and patient. Verify network participation, visit charges and whether virtual clinicians can share records with the employee's regular clinician. Our employer telemedicine evaluation guide explains how to test costs without promising savings.
3. Does the funding arrangement match employer risk?
Compare fully insured and self-funded proposals using the employer's financial capacity, not headline monthly payments alone. For level-funded or self-funded arrangements, identify stop-loss limits, exclusions, run-out claims, renewal exposure and contract termination provisions. A TPA's administrative role does not itself eliminate the employer's obligations. Review the actual contracts with qualified advisers.
4. Can employees reach the providers they need?
Check the exact network, geographic service area, specialist availability and prescription access. A broad directory is not proof of timely appointments. Test important hospitals and clinicians against the proposed network and ask how employees obtain help with referrals, authorizations and claims. Compare access changes alongside premium changes rather than treating narrower coverage as equivalent.
5. Can employees use the benefits they receive?
Translate plan changes into payroll contributions, care examples and clear service contacts. Explain deductibles and out-of-pocket limits without suggesting every service has the same cost. Use the Summary of Benefits and Coverage for consistent comparisons and offer private questions outside group sessions. See our benefits education measurement guide for a practical feedback loop.
What should the renewal decision record include?
Record the baseline, proposed change, expected mechanism, responsible administrator and measurement period. Track fees, claims when available, payroll contributions and access complaints. Use dated employee-benefit benchmarks as context, not as a substitute for plan-specific proposals. PCI's group health insurance services can support that comparison.
Employer worksheet for the TPA review
Complete one row per proposal using aggregate information and the actual contracts. An unanswered responsibility or contract question is an item to resolve before approval, not evidence of savings.
| Decision area | Ask the TPA | Record before deciding |
|---|---|---|
| Pharmacy | Who provides net spending, fees and rebate information? | Reporting source, exclusions and responsible contact |
| Virtual care and network | How does an employee verify coverage and obtain follow-up? | Confirmed access pathway and member charges |
| Funding | Who pays claims, handles run-out and explains stop-loss exclusions? | Contract provision and employer obligation |
| Communication | Who prepares notices and handles private questions? | Named owner, materials and distribution responsibility |
General information for employers, not legal, tax, or medical advice; plan documents and current rules control.
Contact PCI Solutions to discuss a structured renewal review.
Frequently Asked Questions
Should every employer adopt the same health-plan trends?
No. Workforce needs, contracts, funding and financial risk differ. Evaluate each proposal against a documented baseline.
Does using a TPA guarantee lower health-plan costs?
No. A TPA administers services under its contract; costs depend on claims, fees, coverage and financing. Compare total costs and responsibilities before changing arrangements.
About the author
Dustin Neider — President of PCI Solutions, insurance broker and ACA specialist with 14+ years of experience in health insurance.
