Which of the following best describes a TPA arrangement in health insurance?

A TPA (Third-Party Administrator) arrangement in health insurance primarily refers to the facilitation of claims processing and the provision of administrative services on behalf of insurance companies or self-insured employers. By leveraging the expertise and resources of a TPA, employers can streamline claims management, ensure compliance with regulations, and enhance their overall administrative efficiency without having to handle these processes internally.

In this context, TPAs play a pivotal role in managing health benefits by effectively acting as intermediaries between the employer and the insurance provider, overseeing functions such as claims processing, enrollment, and customer service. This allows employers, especially those who are self-insured, to focus more on their core operations while ensuring that their employees' health claims are handled promptly and accurately.

The other options focus on direct insurance contracts, risk pooling, and individual coverage, which do not accurately capture the primary function of a TPA. A TPA arrangement is specifically about administrative efficiency rather than direct insurance relationships or individual employee coverage.