Compliance failures rarely announce themselves. They don’t show up with warning lights and sirens. They accumulate quietly — in a dependent verification that was skipped, a plan document that drifted from what’s actually being administered, an eligibility file that hasn’t been reconciled in months.
By the time a plan sponsor discovers the problem, it’s usually because an auditor, a regulator, or a participant found it first.
The uncomfortable truth is that many of these failures are preventable — not by the plan sponsor, but by their TPA. And the difference between a TPA that prevents them and one that doesn’t often comes down to a single question: Are they willing to push back?
A TPA that never asks you a hard question is not making your life easier. They’re making it more dangerous.
The Telescope vs. the Microscope
There are two ways a TPA can look at a client relationship.
The first is through a telescope. At that distance, everything looks fine. The plan has members. Claims are being processed. Checks are going out. The reports balance. Nobody is complaining. From far enough away, nearly any plan looks functional.
The second is through a microscope. At that level, you see what’s actually there. Dependents who were never verified. Terminated employees still appearing on eligibility rosters. Plan documents written for a benefit structure that no longer exists. Premium billing that doesn’t match enrollment records. Life events that were reported but never processed.
The telescope TPA and the microscope TPA can work with the same client for years and produce very different outcomes — because only one of them is actually looking.
What Compliance Risk Actually Looks Like
Plan sponsors — especially trustees of union and Taft-Hartley plans — carry significant fiduciary responsibility. ERISA doesn’t distinguish between a plan sponsor who deliberately violated the rules and one who simply didn’t know what their TPA was or wasn’t doing. Ignorance is not a defense.
The compliance exposures that tend to surface in audits and DOL inquiries are rarely dramatic. They’re mundane. They’re the kind of thing that a vigilant TPA catches during routine data review — if they’re actually doing that review.
Common examples include:
- Dependent eligibility errors. Spouses or children who no longer qualify under plan rules continuing to receive benefits because no one asked for verification.
- Terminated employee coverage. Members who left employment or lost union status still appearing as active in eligibility files — sometimes for months.
- Plan document misalignment. Benefits being administered under informal practices that were never reflected in the formal plan document — creating legal exposure when there’s a dispute.
- COBRA administration gaps. Qualifying events not triggering notices on time, or COBRA elections not being properly tracked — both carry per-day penalties.
- Billing and premium reconciliation. Premiums that don’t reconcile with enrollment records — a red flag in any audit.
- ACA and reporting obligations. 1094/1095 filings, minimum essential coverage requirements, and applicable large employer thresholds — all areas where errors compound and penalties accumulate.
None of these are exotic edge cases. They show up routinely. And in most cases, the plan sponsor had no idea there was a problem — because their TPA never told them.
A TPA who accepts your data without question isn’t being easy to work with. They’re transferring risk back to you.
Push Back Is a Service, Not a Problem
When a TPA contacts a plan sponsor to ask a question, it can feel like friction. An extra call. More paperwork. Something to resolve before things can move forward.
That friction is compliance work. It’s the TPA doing its job.
The question might be about a discrepancy in an 834 file. Or a dependent whose eligibility period doesn’t match the enrollment date. Or a COBRA qualifying event that was reported but the election window is about to close. Or a member whose address hasn’t been updated in three years but who is still receiving paper EOBs.
These are not administrative nuisances. They are early warnings. And a TPA that surfaces them — that asks the question, flags the gap, requires a response — is a TPA that is actively protecting its client from a future that is much more expensive and complicated than a clarifying phone call.
The TPA that accepts everything without question is not a low-maintenance partner. They’re a liability.
What Plan Sponsors Should Expect
If you’re evaluating your current TPA relationship — or shopping for a new one — here are the questions worth asking:
- How often does your TPA contact you with data questions? If the answer is never, that is not efficiency. That is indifference.
- What does their eligibility reconciliation process look like? How frequently are enrollment files audited against contribution records and employer reports?
- How do they handle plan document discrepancies? Do they flag when administrative practices have drifted from the written plan? Do they escalate it?
- What is their COBRA tracking process? Can they demonstrate the audit trail for qualifying events, notices, and elections?
- How do they report compliance exposure to trustees or plan administrators? Is there a regular review? A dashboard? Escalation protocols?
A good TPA should be able to answer every one of these questions clearly and specifically. If the answers are vague, or if the conversation feels uncomfortable, that discomfort is information.
How SHN Approaches Compliance
At Solidarity Health Network, our compliance posture is built on one principle: plan sponsors should never be the last to know.
We review eligibility data continuously — not just at open enrollment. We flag discrepancies when they appear, not when a renewal or audit forces the issue. When something in a client’s data doesn’t match, we ask. When a plan document hasn’t been updated to reflect actual practice, we say so. When a COBRA deadline is approaching and the election hasn’t been received, we follow up.
This is not above and beyond. It’s the baseline. It’s what it means to actually administer a plan — as opposed to just processing transactions that flow through one.
Our clients include Taft-Hartley trust funds, public employee retirement systems, ACA Marketplace plans, and employer groups ranging from small businesses to national organizations. The compliance obligations differ. The expectation doesn’t: we are responsible for knowing what’s in their data, and for telling them when something is wrong.
We push back because it’s our job. And because the alternative — silence — is not neutral. It’s negligence.
The Question to Ask Yourself
When was the last time your TPA asked you to clarify something?
Not a routine form. Not a renewal document. A real question — about a discrepancy in your data, a gap in your compliance posture, a practice that doesn’t match your plan document.
If you can’t remember, it’s worth asking why.
A TPA that sees your organization through a telescope is managing volume. A TPA that sees it through a microscope is managing risk — yours. In a regulatory environment that continues to add complexity and enforcement attention, that distinction matters more than ever.
Solidarity Health Network, Inc. | Cleveland, Ohio | Founded 1989 | www.shninc.org
SOC 2 Type II Certified | HIPAA Compliant | Serving 340,000+ Lives