N.J. Admin. Code § 11:23-3.1

Current through Register Vol. 56, No. 19, October 7, 2024

Section 11:23-3.1 - Third party administrator agreement with benefits payer

(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.

N.J. Admin. Code § 11:23-3.1