The Parties At Work: Understanding Your Insurance Plan

Health insurance in the United States can be complicated and confusing, especially since there are many parties involved in making sure that your plan runs smoothly and seamlessly. In this blog, we are going to explore who these parties are, what they do, and how they work together to provide care for your students in the event they need medical care.

What is an insurance company?

The insurance company also referred to as the insurer, assumes the risk of an insured. The insurance company creates a quote, sells the policy, provides coverage, and pays out the claim. The “insurance company” is a general way to refer to insurance, but depending on your plan structure, there can be many additional parties listed under this umbrella that we will explain below.

What is a third party administrator (TPA) or plan administrator?

Insurance companies can also outsource various duties to a third party administrator (TPA). A TPA is an organization which can assist in managing an insurance plan. They can be responsible for the underwriting which includes pricing and plan design. They may also be instrumental in providing customer service for their members, and process the claims in-house.

What is the insurance plan’s network?

A provider network is a list of contracted doctors, hospitals and clinics that members can go to for medical treatment. Because of the contract in place with these providers, they often offer discounted rates, direct payment and ease of claim filing. Insurance companies may have their own network or they may also contract a separate network for their members to use.

Who is the assistance company and what do they do?

Insurance companies may also work with an assistance company that provides emergency transportation and arrangements in case a crisis occurs. While this may be a service offered in-house by the insurance companies or TPAs, in many cases the insurance company will use an outside company that has worldwide relationships to coordinate care around the world.

Who is the underwriter?

The underwriter is a separate organization that insures and spreads out the risk that the insurance company is taking on. Insurance plans are typically backed by an insurance carrier that will help cover the expenses in case the insurance company is unable to pay. Examples include Sirius International and Lloyd’s of London, and it’s important to verify their ratings through third parties such as AM Best and Standard and Poors.

What does a broker do?

The responsibility of a broker is to understand the health insurance needs of their clients and work with the insurance companies to provide adequate coverage. A broker’s role is to offer guidance and outline the various pros and cons of potential plan options, so that informed decisions can be made, along with having an extra layer of support for those insured on a plan. 

Depending on the insurance plan, there may be multiple parties at play. Before signing an insurance contract, it is important to understand how the insurance is set up, who the parties are involved, and how they all work together.

If you are looking for health insurance, ISI is an insurance broker that has been a trusted industry leader since 2001. ISI specializes in international students offering both group and individual plan options. Learn more about us

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