What is the amount of the petition for credit for the TPA in the same scenario?

• A. $10,000
• B. $20,000
• C. $40,000
• D. $60,000

Answer: (B)

In a self‑insurance plan, a petition for credit with the third‑party administrator is a formal request to recover administration fees that were prepaid but not yet earned. The amount you can credit back equals the portion of prepaid fees that remains unearned after the TPA has performed its services.

In this scenario, the TPA’s total charges were $60,000, but only $40,000 of those charges had been earned through services rendered. That leaves $20,000 of prepaid, unearned fees as a potential credit. Therefore, the petition for credit is $20,000.

The other amounts would not reflect the unearned portion: $60,000 would be the total billed (not the refundable credit), and $40,000 would be the earned amount, not the credit.