The US Healthcare Insurance Third-Party Administrator market size was valued at US$ 64.92 billion in 2024 and is expected to reach US$ 144.86 billion by 2031. The market is estimated to record a CAGR of 12.1% from 2024 to 2031. The adoption of AI-driven tools and automation is likely to be a key trend in the market.
US Healthcare Insurance Third-Party Administrator Market Analysis
The growth of the healthcare insurance third-party administrator (TPA) market in the US is driven by several key factors, including the rising healthcare costs, increasing adoption of self-funded insurance plans by employers seeking cost savings, the growing complexity of healthcare management and regulatory compliance, and the rising demand for specialized administrative services such as claims processing, analytics, and member support. Additionally, the expansion of telehealth services and employer-sponsored health plans, the need for enhanced efficiency in claims adjudication, and the ability of third-party administrators to offer customized solutions for diverse healthcare needs further fuel the market. The shift toward AI-driven tools and automation in third-party administrators also contributes to the rising reliance on third-party administrators to streamline operations and reduce overall costs for insurers and employers.
US Healthcare Insurance Third-Party Administrator Market Overview
A third-party administrator (TPA) is an entity that manages the administrative and operational functions of an insurance plan. These responsibilities typically include processing claims, enrolling participants, collecting premiums, and ensuring compliance with federal regulations. While TPAs do not establish the policies of insurance plans, they play a crucial role in ensuring that the policies are effectively implemented. TPAs may collaborate with multiple insurers, providing services across different plans and organizations. Though often associated with health insurance, TPAs are used in various other insurance sectors. For example, commercial liability insurers and retirement plan administrators often hire TPAs to act as claims adjusters or to offer customer support services. TPAs can range from large multinational corporations to individual contractors who hold TPA certification. Insurance companies and employers with self-funded health plans often outsource their claims management to TPAs, a process known as outsourcing.
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US Healthcare Insurance Third-Party Administrator Market: Strategic Insights
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US Healthcare Insurance Third-Party Administrator Market: Strategic Insights
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US Healthcare Insurance Third-Party Administrator Market Drivers and Opportunities
Rising Healthcare Costs
The increasing costs of healthcare services, medications, and insurance premiums are pushing both insurers and employers to seek more efficient and cost-effective ways to manage healthcare plans. Third-party administrators can help streamline claims processing and administrative functions, reducing operational costs for insurers and employers. According to the Peter G. Peterson Foundation, the US has a high healthcare expenditure, with US$ 4.5 trillion spent in 2022, equating to an average of US$ 13,493 per person. This is significantly higher than the healthcare spending in other developed countries, where the costs per person are less than half of what they are in the US. This immense spending burden has created pressures on insurers, employers, and consumers, driving the need for more efficient and cost-effective ways to manage healthcare systems. Third-party administrators help businesses manage employer-sponsored health insurance plans by taking on the burden of tasks such as claims processing, eligibility verification, and benefits administration. By outsourcing these responsibilities to third-party administrators, companies can focus on their core operations while still offering competitive healthcare benefits to employees.
Growing Employer-Sponsored Health Plans
The significant role of employer-sponsored health insurance (ESI) in the US as the primary source of health coverage for non-elderly residents highlights the crucial impact that employers and insurance providers have on the nation's healthcare system. According to KFF, in 2023, approximately 60.4% of individuals under age 65, or 164.7 million people, were covered through ESI. Unlike many other countries where national healthcare systems dominate, the US relies heavily on voluntary, private health insurance, making employer-based plans essential for offering health coverage to working families.
US Healthcare Insurance Third-Party Administrator Market Report Segmentation Analysis
Key segments that contributed to the derivation of the US Healthcare Insurance Third-Party Administrator market analysis are type and enterprise size.
- In terms of type, the market is segmented into health insurance, disability insurance, workers' compensation insurance, and others.
- In terms of enterprise size, the market is bifurcated into large enterprises and small and medium-sized enterprises.
US Healthcare Insurance Third-Party Administrator Market Share Analysis
The US healthcare insurance third-party administrator market is a dynamic sector that includes a variety of companies and associations working to streamline healthcare administration and reduce costs for insurers, employers, and plan participants. Third-party administrators are critical to managing tasks such as claims processing, enrollment, customer support, and regulatory compliance, allowing health insurance companies and self-insured employers to focus on core business functions. Several well-known companies, such as Sedgwick, Crawford & Company, Meritain Health, UMR Inc., and Gallagher Bassett Services Inc, play a significant role in the US healthcare insurance third-party administrator market. These companies not only manage claims but also offer additional services such as access to healthcare networks and vendor sourcing, which enhances the overall efficiency of health plan administration. Similarly, associations such as the Society of Professional Benefit Administrators (SPBA), Self-Insurance Institute of America (SIIA), and the National Association of Third-Party Administrators (NATPA) play a key role in shaping the landscape of the US healthcare insurance third-party administrator market by advocating for policies that support the self-insurance industry, offering education and certification for third-party administrators, and promoting best practices.
US Healthcare Insurance Third-Party Administrator Market Report Scope
US Healthcare Insurance Third-Party Administrator Market News and Recent Developments
The US Healthcare Insurance Third-Party Administrator market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the US Healthcare Insurance Third-Party Administrator market are listed below:
- Sedgwick announced a strategic investment from Altas Partners. Current investors, including funds managed by global investment firm Carlyle (NASDAQ: CG) and Stone Point Capital LLC, will remain as investors and continue to make significant new investments in the business. Carlyle will maintain its control position in partnership with the investor group and the Sedgwick management team. (Source: Sedgwick, Press Release, Sep 2024)
- Sedgwick has announced several new updates to its artificial intelligence-powered (AI) technology program. The technology's goal is to expedite the claims process by predicting, addressing, and automating steps in the claim lifecycle, thereby enhancing consumer experiences and streamlining claim resolutions. (Source: Sedgwick, Press Release, May 2024)
US Healthcare Insurance Third-Party Administrator Market Report Coverage and Deliverables
The "US Healthcare Insurance Third-Party Administrator Market Size and Forecast (2021–2031)" report provides a detailed analysis of the market covering below areas:
- US Healthcare Insurance Third-Party Administrator market size and forecast at country levels for all the key market segments covered under the scope
- US Healthcare Insurance Third-Party Administrator market trends, as well as market dynamics such as drivers, restraints, and key opportunities
- Detailed PEST and SWOT analysis
- US Healthcare Insurance Third-Party Administrator market analysis covering key market trends, country framework, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the US Healthcare Insurance Third-Party Administrator market
- Detailed company profiles
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
This text is related
to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
Frequently Asked Questions
The rising healthcare costs and growing employer-sponsored health plans fuel the US Healthcare Insurance Third-Party Administrator market growth.
The adoption of AI-driven tools and automation is likely to be a key trend in the market.
UMR Inc, Sedgwick, Corvel, ESIS, and Gallagher are among the leading players in the US Healthcare Insurance Third-Party Administrator market.
The estimated value of the US Healthcare Insurance Third-Party Administrator market is expected to reach US$ 144.86 billion by 2031.
The market is expected to register a CAGR of 12.1% over the forecast period.
1. Introduction
1.1 The Insight Partners Research Report Guidance
1.2 Market Segmentation
2. Executive Summary
2.1 Key Insights
3. Research Methodology
3.1 Secondary Research
3.2 Primary Research
3.2.1 Hypothesis formulation:
3.2.2 Macro-economic factor analysis:
3.2.3 Developing base number:
3.2.4 Data Triangulation:
3.2.5 Country level data:
4. U.S Healthcare Insurance Third-Party Administrator Market Landscape
4.1 Overview
4.2 PEST Analysis
4.3 Ecosystem Analysis
4.3.1 Healthcare Insurance Companies
4.3.2 Third-Party Administrators
4.3.3 Regulatory Bodies/Government Agencies
4.3.4 List of Vendors in the Value Chain
5. U.S Healthcare Insurance Third-Party Administrator Market – Key Market Dynamics
5.1 U.S Healthcare Insurance Third-Party Administrator Market – Key Market Dynamics
5.2 Market Drivers
5.2.1 Rising Healthcare Costs
5.2.2 Growing Employer-Sponsored Health Plans
5.3 Market Restraints
5.3.1 Data Privacy and Security Concerns
5.4 Market Opportunities
5.4.1 Expansion of Telehealth Services
5.5 Future Trends
5.5.1 AI-Driven Tools and Automation in Third-Party Administrators
5.6 Impact of Drivers and Restraints:
6. U.S Healthcare Insurance Third-Party Administrator Market Analysis
6.1 U.S Healthcare Insurance Third-Party Administrator Market Revenue (US$ Million), 2021–2031
6.2 U.S Healthcare Insurance Third-Party Administrator Market Forecast and Analysis
7. U.S Healthcare Insurance Third-Party Administrator Market Analysis – by Type
7.1 Health Insurance
7.1.1 Overview
7.1.2 Health Insurance: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
7.2 Disability Insurance
7.2.1 Overview
7.2.2 Disability Insurance: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
7.3 Workers Compensation Insurance
7.3.1 Overview
7.3.2 Workers Compensation Insurance: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
7.4 Others
7.4.1 Overview
7.4.2 Others: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
8. U.S Healthcare Insurance Third-Party Administrator Market Analysis – by Enterprise Size
8.1 Large Enterprises
8.1.1 Overview
8.1.2 Large Enterprises: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
8.2 SMEs
8.2.1 Overview
8.2.2 SMEs: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
9. Competitive Landscape
9.1 Company Heat Map Analysis
9.1 Company Positioning & Concentration Analysis
10. Industry Landscape
10.1 Overview
10.2 Market Initiative
10.2 New Product Development
10.3 Mergers & Acquisitions
11. Company Profiles
11.1 Sedgwick
11.1.1 Key Facts
11.1.2 Business Description
11.1.3 Products and Services
11.1.4 Financial Overview
11.1.5 SWOT Analysis
11.1.6 Key Developments
11.1.7 TPA Valuation
11.2 Crawford and Company
11.2.1 Key Facts
11.2.2 Business Description
11.2.3 Products and Services
11.2.4 Financial Overview
11.2.5 SWOT Analysis
11.2.6 Key Developments
11.2.7 TPA Valuation
11.3 CorVel Corp
11.3.1 Key Facts
11.3.2 Business Description
11.3.3 Products and Services
11.3.4 Financial Overview
11.3.5 SWOT Analysis
11.3.6 Key Developments
11.3.7 TPA Valuation
11.4 UnitedHealth Group Inc
11.4.1 Key Facts
11.4.2 Business Description
11.4.3 Products and Services
11.4.4 Financial Overview
11.4.5 SWOT Analysis
11.4.6 Key Developments
11.4.7 TPA Valuation
11.5 Arthur J Gallagher & Co
11.5.1 Key Facts
11.5.2 Business Description
11.5.3 Products and Services
11.5.4 Financial Overview
11.5.5 SWOT Analysis
11.5.6 Key Developments
11.5.7 TPA Valuation
11.6 Heritage Health Solutions, Inc.
11.6.1 Key Facts
11.6.2 Business Description
11.6.3 Products and Services
11.6.4 Financial Overview
11.6.5 SWOT Analysis
11.6.6 Key Developments
11.6.7 TPA Valuation
11.7 Edison Health Solutions
11.7.1 Key Facts
11.7.2 Business Description
11.7.3 Products and Services
11.7.4 Financial Overview
11.7.5 SWOT Analysis
11.7.6 Key Developments
11.7.7 TPA Valuation
11.8 Meritain Health
11.8.1 Key Facts
11.8.2 Business Description
11.8.3 Products and Services
11.8.4 Financial Overview
11.8.5 SWOT Analysis
11.8.6 Key Developments
11.8.7 TPA Valuation
11.9 Chubb Ltd
11.9.1 Key Facts
11.9.2 Business Description
11.9.3 Products and Services
11.9.4 Financial Overview
11.9.5 SWOT Analysis
11.9.6 Key Developments
11.9.7 TPA Valuation (ESIS)
11.10 Cannon Cochran Management Services Inc.
11.10.1 Key Facts
11.10.2 Business Description
11.10.3 Products and Services
11.10.4 Financial Overview
11.10.5 SWOT Analysis
11.10.6 Key Developments
11.10.7 TPA Valuation
12. Appendix
12.1 Abbreviations
12.2 About The Insight Partners
List of Tables
Table 1. U.S Healthcare Insurance Third-Party Administrator Market Segmentation
Table 2. List of Vendors
Table 3. U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Table 4. U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million) – by Type
Table 5. U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million) – by Enterprise Size
Table 6. Company Positioning & Concentration
List of Figures
Figure 1. U.S Healthcare Insurance Third-Party Administrator Market Segmentation, by Country
Figure 2. PEST Analysis
Figure 3. Ecosystem Analysis
Figure 4. Impact Analysis of Drivers and Restraints
Figure 5. U.S Healthcare Insurance Third-Party Administrator Market Revenue (US$ Million), 2021–2031
Figure 6. U.S Healthcare Insurance Third-Party Administrator Market Share (%) – by Type, 2024 and 2031
Figure 7. Health Insurance: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Figure 8. Disability Insurance: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Figure 9. Workers Compensation Insurance: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Figure 10. Others: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Figure 11. U.S Healthcare Insurance Third-Party Administrator Market Share (%) – by Enterprise Size, 2024 and 2031
Figure 12. Large Enterprises: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Figure 13. SMEs: U.S Healthcare Insurance Third-Party Administrator Market – Revenue and Forecast to 2031 (US$ Million)
Figure 14. Heat Map Analysis
The List of Companies - US Healthcare Insurance Third-Party Administrator Market
- Sedgwick
- Crawford and Company
- CorVel Corp
- UnitedHealth Group Inc
- Arthur J Gallagher & Co
- Heritage Health Solutions, Inc
- Edison Health Solutions
- Meritain Health
- Chubb Ltd
- Cannon Cochran Management Services Inc.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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