Does a TPA need a license in NY?
It depends, opined New York’s Office of General Counsel recently.
If a third-party administrator (TPA) is doing work that needs a license in New York – such as adjusting insurance claims – then a license is necessary. If it is doing work that does not require a license, then no license is needed, according to Alan Rachlin, an attorney for the Insurance Department.
The opinion was issued in response to an inquiry from a domestic life insurer's affiliate that administers employee benefit plans, including health, dental claims, and disability processing. This entity applied to another jurisdiction for a TPA license, and was asked for a letter from New York stating that New York does not require a license.
No letter is immediately forthcoming, because the issue is not clear cut. The OGC said the TPA needs to submit a full description of all its activities. If none of the activities requires a license, then the state will issue the letter.
