Third-Party Administrator (TPA) FAQs

    What is a Third-Party Administrator (TPA)?

    A TPA is a business entity that contracts with one or more self-insured employers to handle the self-insured employer's claims under WAC 296-15-350. TPAs that handle claims in Washington state must be licensed by the Washington State Department of Labor & Industries (L&I). A business entity that is majority owned by a self-insured employer for which it contracts to handle claims will not be considered a TPA of that self-insured employer.

    How much does a TPA license cost?

    There is no charge for a TPA license.

    When do TPAs need to be licensed to be in compliance with new WACs?

    Effective July 1, 2021 all TPAs must be licensed by L&I to handle claims for self-insured employers.

    What are the requirements to become a licensed TPA?

    To become eligible for a TPA license, a business entity must:

    • Be licensed to do business in the state of Washington as evidenced by holding a business license from the Department of Revenue.
    • Demonstrate to department’s satisfaction that it can meet the requirements for handling claims under WAC 296-15-350.
    • Comply with the reporting requirements of these rules.
    What are the TPA license application requirements?

    To apply for a license, the TPA must submit to L&I a:

    1. Completed L&I application.
    2. List of the self-insured employers in WA for which the TPA is under contract to handle claims.
    3. List of their certified claim administrators.
    4. List of their claim administrators in the process of obtaining their certification in accordance with WAC 296-15-360.
    How long is a TPA license valid for and what is the renewal process?

    A TPA must renew its license annually. To apply for license renewal, the TPA must submit to L&I a:

    • Completed L&I application.
    • List of the self-insured employers in Washington for which the TPA is under contract to handle claims.
    • List of their certified claim administrators.
    • List of their claim administrators in the process of obtaining their certification in accordance with WAC 296-15-360.
    What happens if a TPA does not obtain a license by July 1, 2021?

    The TPA is not authorized to manage claims for self-insured employers if it does not obtain a license by July 1, 2021.

    What happens if a TPA fails to renew its license?

    The TPA is not authorized to manage claims for self-insured employers if it fails to renew its license. Provisional status will be added to the license.

    Can a TPA be penalized for rule violations?

    Yes. A TPA may be penalized under RCW 51.48.080 for rule violations involving, but not limited to failure to maintain the requirements under WAC 296-15-425, 296-15-520, or 296-15-550. The penalty for the initial violation is $500. The department may increase the amount up to $1,000 if the violation is a recurring problem.

    A TPA may be directed to obtain training when recurring problems are identified. A TPA that refuses to obtain the training for their staff may be penalized when its failure to obtain training for its staff results in subsequent rule or statutory violations.

    Can a TPA be reviewed for non-compliance?

    Yes. A TPA could be selected for review if the department receives complaints for non-compliance.

    Can a TPA be audited?

    Yes. A TPA could be selected for an issue based audit as part of the program's 2-year audit plan.

    Can a TPA be referred for penalty?

    Yes. A TPA could be referred from audit to penalty to determine if a penalty should be assessed.