Paying in the dark: third-party administrator fees and the limits of employer cost control in self-insured health plans

Description

Christine Buttorff and co-authors investigated the hidden fees employers pay the firms that run their self-funded health plans. Most workers in such plans rely on third-party administrators to build provider networks and process claims, yet fee structures are poorly documented. The team held twenty-two interviews in autumn 2025 with thirty-four people spanning employers, administrators, brokers, and legal experts.

Interviewees separated the visible base fee, the one employers compare when shopping, from a layer of charges rarely clear at signing. These extra charges included shares of claimed savings on out-of-network bills, fees for recovering overpayments, kept network discounts, per-service charges, and offsets across plans. Two remedies came up often: fuller disclosure of every charge and clearer legal duty for administrators to act in employers' interest. Consolidation among administrators, the authors warn, may blunt both remedies by leaving employers few places to turn.

Catalog record

Source: https://europepmc.org/article/MED/PMC13505514