New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 23 - THIRD-PARTY ADMINISTRATORS
Subchapter 3 - THIRD PARTY ADMINISTRATORS
Section 11:23-3.1 - Third party administrator agreement with benefits payer
Universal Citation: NJ Admin Code 11:23-3.1
Current through Register Vol. 56, No. 6, March 18, 2024
(a) A third party administrator shall not conduct any business with a benefits payer in the absence of a written agreement between the administrator and the benefits payer. This subsection shall not apply to a third party administrator registered in accordance with 11:23-2.1(c) with respect to services performed for an insurer.
(b) The agreement shall be retained as part of the official records of the administrator for the duration of the agreement and for five years thereafter.
(c) The provisions of the agreement shall include, but shall not be limited to:
1. All services, including services other
than processing and payment of claims, to be provided by the administrator and
the manner in which the administrator is to be compensated;
2. The responsibilities of the benefits payer
to the administrator with respect to claims to be paid by the administrator on
behalf of the benefits payer, including:
i.
The provision of enrollment and eligibility information;
ii. Arrangement for a preliminary or escrowed
deposit of funds by the benefits payer, if any;
iii. The method used for the transmittal of
funds from the benefits payer to the administrator;
iv. Notification by the benefits payer of
modifications in the benefits payer's benefits plan;
v. Provisions setting forth the respective
liability of the administrator and benefits payer for payment of ineligible
claims;
vi. Liability for claim
payments that are overdue; and
vii.
Provisions regarding the procurement of reinsurance or stop-loss
insurance;
3. The
responsibilities of the administrator to the benefits payer, including:
i. The maintenance of appropriate back-up
systems against the loss of records;
ii. Establishment and maintenance of
appropriate financial controls;
iii. Provisions regarding the benefits
payer's rights with respect to the conducting of claims audits by an outside
auditor;
iv. The maintenance of
appropriate insurance coverage, which shall include general liability
insurance, valuable papers insurance and errors and omissions coverage and such
other coverage as is appropriate to the form of organization and nature of the
business of the third party administrator;
v. Appropriate access by the benefits payer
to the administrator's records;
vi.
Procedures for making available the claims experience and other claims-related
information to the benefits payer at its request, including, but not limited
to, monthly reports; and
vii.
Preparation or provision of data required for prompt-pay reports and payment of
any penalties payable under the contract; and
4. Specific performance standards, evaluation
criteria and monetary amounts of penalties payable under the
contract.
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