Consortium/Third-Party Administrator

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Definition - What does Consortium/Third-Party Administrator mean?

A consortium/third-party administrator (C/TPA) is an organization that provides administrative services to employers to facilitate their drug and alcohol testing programs. A C/TPA may manage a portion of an employer's drug and alcohol testing policy or the entire program. C/TPA may be contracted to administer either federal or state mandated or voluntary employer drug and alcohol testing programs. The C/TPA may also take responsibility for compliance, testing, and record keeping as an agent of the employer.

SureHire explains Consortium/Third-Party Administrator

The term consortium/third-party administrator (C/TPA) is defined by federal Department of Transportation (DOT) guidelines. The term refers to two different organizational forms. A third-party administrator, as the name implies, is an independent organization providing services to employers. The third-party administrator acts as an authorized agent of the employer to provide services related to all or part of the employer's drug and alcohol program.

The DOT standards define a consortium as a group of employers who work together to administer their drug and alcohol policies as a single entity. The consortium may serve the same functions as a third-party administrator.

Among other services, C/TPA may manage the system used to select employees for random drug testing, provide testing facilities and services or maintain employee records related to drug and alcohol testing.

Under the rules of agency, an employer who contracts with a C/TPA to provide drug and alcohol testing or administration remains responsible for the actions of the C/TPA. Neither a consortium or third-party administrator is considered an employer by the DOT rules. For this reason, the C/TPA cannot serve in the role of the designated employer representative (DER).

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