Q

QuestionHuman Resource Management

A third-party administrator is an outside organization that provides administrative services for another company's insurance or benefit plans. Their primary role is to handle specific administrative tasks on behalf of the original plan sponsor.

Option A: Outside organization that manages a sales team - This is not a typical TPA function - This appears to be a sales management service Option B: Outside organization that processes claims for an employer's self-funded group plan - This MATCHES the definition of a third-party administrator - TPAs commonly handle claims processing for self-insured employers - They manage administrative tasks like claims review, payment, and record-keeping Option C: Outside organization that serves as an arbitrator in Social Security claims - This is more of a legal/dispute resolution function - Not a typical TPA role Option D: Outside organization that conducts investigations into fraudulent claims - This is more of an investigative service - While related to insurance, not a core TPA function

The correct answer is B: Outside organization that processes claims for an employer's self-funded group plan.