What is a TPA in health insurance and what do they do?

A Third Party Administrator (TPA) is a licensed intermediary appointed by a health insurance company to manage the claims process on the insurer's behalf. TPAs coordinate cashless approvals at hospitals and verify claim documentation. They also act as the point of contact between the policyholder, the hospital, and the insurer during hospitalisation.

Who is a TPA in health insurance?

A TPA is an entity licensed by IRDAI under the IRDAI (Third Party Administrators - Health Services) Regulations, 2016 to provide claim-related services for health insurance policies. The insurer contracts the TPA to handle end-to-end claim processing, from pre-authorisation of cashless admission to settlement of reimbursement claims after discharge.

What does a TPA actually do during a claim?

The TPA receives the pre-authorisation request from the hospital, verifies the policyholder's cover against the policy terms, and issues an approval or denial within the regulatory timeline. During hospitalisation, the TPA coordinates with the treating hospital on estimated bills and issues the final authorisation at discharge. For reimbursement claims, the TPA processes the submitted documents and flags any deficiencies. It then forwards a payable amount to the insurer for settlement.

Is a TPA the same as the insurance company?

No. A TPA is a separate entity that works on behalf of one or more insurance companies. The insurer holds the policy contract, sets policy terms, and pays claims. The TPA administers the operational side of claims processing. Some large insurers such as Star Health run in-house claim teams instead of appointing a TPA, but most group health policies in India are administered through a TPA.

Do all health insurance policies use a TPA?

Most group and retail health policies in India use a TPA, though not every insurer appoints one. Where a TPA is appointed, the policyholder's ID card carries the TPA's name and helpline number rather than the insurer's, and the hospital's insurance desk routes cashless requests through the TPA's platform. Where no TPA is appointed, claims are handled directly by the insurer's in-house claims team.

How does an employee know which TPA handles their policy?

The TPA's name, logo, and helpline are printed on the health insurance ID card issued at policy start, and appear on the employer's policy document. Employees can also check their TPA through the employer's HR benefits portal or by calling the insurer's main helpline with the policy number.

How Plum approaches this

Plum coordinates directly with the TPA on behalf of the employer whenever a claim escalates, rather than leaving the employee to chase paperwork alone. Across Plum's group health book, claims NPS runs at 79 and cashless pre-authorisation clears in a median of 45 minutes, both driven in part by how closely Plum's claims team works with the TPA teams at partner insurers including ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, Niva Bupa, and Aditya Birla Health Insurance. Plum's group cover is available for employers from 7 employees upward, with the TPA structure explained upfront during onboarding so employees know exactly who to call before they need to file a claim.

Frequently asked questions

Is the TPA fee borne by the employee?

No. The insurer pays the TPA a per-policy or per-claim fee as part of its operational cost, and this is built into the premium the employer pays. The employee bears no separate TPA charge.

Can the TPA reject a claim?

The TPA recommends approval or denial to the insurer based on policy terms, but the final decision on rejection rests with the insurer, not the TPA. A rejected claim must meet the reasons and disclosure requirements set under the IRDAI Master Circular on Health Insurance Business, 2024.

Can an employer change the TPA mid-policy year?

The TPA appointment sits with the insurer, not the employer, so the TPA cannot be changed by the employer during a policy year. At renewal, if an employer switches insurer, the TPA usually changes as a consequence.

What is the difference between a TPA and an insurance broker?

A TPA administers claims on behalf of the insurer. A broker represents the policyholder in policy selection, placement, and claims support. The two roles are distinct and often operate in parallel on the same policy.

How many TPAs operate in India?

IRDAI licenses a limited number of TPAs, with the current list published on the IRDAI website; the total sits in the mid-20s as of 2026.