Every day, more than 10,000 people turn 65, according to HHS. Forward-thinking third-party administrators (TPAs) are seizing the opportunity by adding retiree billing to their practices. With the right retiree benefits administration software, you can increase your revenue without adding much work.

The Aging Population

According to Pew Research Center, the Boomer generation consists of 76 million U.S. births, compared to only 55 million for Generation X and 62 million for Millennials.

Furthermore, according to the U.S. Census Bureau, 2030 will mark a turning point in U.S. demographics because all Baby Boomers will be 65 or older. By 2034, there will be more older adults than children for the first time in U.S. history.

Although some Boomers are working past age 65, many are retiring. Pew Research Center says approximately 28.6 million Baby Boomers reported being retired in the third quarter of 2020. One year earlier, this number was only 25.4 million.

The aging of this large generation will have a noticeable impact on society. For example, employers will need to adjust to the high retirement rates. For third-party administrators, the aging population means retiree benefits administration will be increasingly important.

HR Departments Need TPA Assistance

SHRM says burnout is a real problem for HR professionals. In one survey, 42% of HR teams said they were struggling with too many projects and responsibilities.

TPAs provide valuable relief. According to the Society of Professional Benefit Administrators (SPBA), approximately 60% of U.S. workers with non-federal health employee benefits are in plans that use third-party administrators to some degree.

Before TPAs become too comfortable with their job security, though, they should remember they face competition. HR teams need support and will be looking for the TPA that can help them most. To stand out, you need to make sure you’re offering the services HR teams want.

As more workers retire, this increasingly includes retiree billing.

TPAs Need More Revenue

Employees often pay their portion of premiums via payroll deductions, but this isn’t possible for retirees. When retirees owe premiums for Medicare plans or other retiree benefits, direct billing is necessary. This is similar to how COBRA administration is handled as the rules are set by the employer as to how the retiree administration is handled. This makes each retiree billing customer unique as each customer has massive flexibility with how they want the plan to work – Do they want Retirees to elect coverage? What is the grace period for payment? What benefits can be continued as a retiree? What notices & letters do you want to be sent? With the right system and procedures in place to track and automate each customer’s options, you can easily handle this additional line of service and it is a massively profitable product for administrators. The population of retirees stays fairly consistent and has an extremely high enrollment rate. Typical PEPM and QE billing models wont work for this billing arrangement

In fact, if you already handle COBRA administration, billing, and payment processing, adding retiree benefits administration to your suite of services makes sense. Given the current economic realities, ignoring this revenue opportunity makes no sense.

High inflation has impacted everyone, including TPAs. You’ve probably seen your overhead costs increase for everything from office rent and supplies to insurance and payroll. To make up for the increase in expenses, you need to increase your revenue.

Adding retiree billing to your practice is a simple way to do this. With the right software, you can take on retiree billing without significantly increasing your workload. By offering retiree billing, you can increase retention of existing customers and make your services more attractive to new employers whose HR teams need additional support, helping you gain an advantage over your competition.

Upgrade to T-COBRAWEB 2.0

The first step to seizing the retiree billing opportunity is securing the right software. The T-COBRAWEB 2.0 platform comes fully equipped with retirement billing capabilities. Learn more.

Also, attend our next free webinar: Secrets from the TPA Trenches: Why Retirement Billing Is A Cash Cow. Register here>

We’ll take you from Zero to Retiree in 1 day, cover the basics of administration model, discuss the revenue opportunities and highlight sales opportunities. Whether you’re a Travisoft customer or not, we invite you to attend to learn more about Retiree billing to apply to your existing offering, implement a new line of service, and/or learn more about how Travisoft can help streamline your administration.