First Choice Health Network Inc., buoyed by a strong performance in its third-party health-plan administration business, has added 15 staff members at its offices here in recent weeks, giving it a staff of about 50, and says it's likely to expand further eventually.

The Seattle-based health-insurance company could add another 10 employees within the next two years and also might be seeking a larger space within that time even though it moved into new offices at 121 W. Cataldo in 2009 after spending more than $250,000 on tenant improvements there.

"Last year, we grew about 200 percent" in the company's third-party administration business, says Curtis Taylor, First Choice's corporate chief marketing officer, general manager of its Oregon operations, and a Spokane resident. "We see it as an upward trend that will continue."

Through its third-party administration business, the company handles claim processing and payment for self-insured health-care plans, he says. It also operates preferred-provider organization (PPO) health plans in Washington, Oregon, Idaho, Montana, and Alaska that together have 1 million enrollees, and in all cases in which it provides third-party administration, it provides PPO plans, Taylor says.

"Spokane is our hub for all of our TPA (third-party administration) operations," Taylor says.

First Choice Health Network also has physician- and hospital-contracting staff members here who support its PPO plans, which include 50,000 providers and 230 hospitals in five states, Taylor says. Those plans have about 110,000 enrollees in Eastern Washington, he says. That's up from 75,000 enrollees at the beginning of 2007.

Mandates in the federal health-care reform act, which will go into effect in 2014, will require insurers to provide coverage for dependents up to 26 years of age and also will eliminate caps on the cost of care, both of which will drive demand for self-insured plans, Taylor says. Also, employers that self-insure aren't subject to a 2 percent state tax on premiums for conventional health-care plans and have more flexibility to design benefits, which can help keep costs down, he says. It makes the most economic sense for companies that self-insure to have 100 or more employees, Taylor says.

"When health-care reform is rolled in in 2014, we see opportunities for employers to self-fund because they'll save money," Taylor says. "With health-care reform, the self-insured market segment has continued room for growth."

First Choice Health Network's PPO business received a boost in Eastern Washington Jan. 1 when the company added Providence Health Care's employee plan, Taylor says. The company's third-party administration arm already handles claims for Community Health Systems Inc., which owns Deaconess Medical Center and Valley Hospital & Medical Center here, and this year it also has added the Montana Unified Teachers Association, which will add more than 19,000 members to First Choice, he says.

Given the 8,000 square feet of office space the company has here, "we could add about another five to seven employees, but that's about it. It would be real tight," Taylor says. "We could be looking for another space in the next two years. I could honestly see the expansion of the Spokane operation by another 10 employees in the next two years. That's a good estimate."

He says the company isn't eager to find new quarters "because of the upfront capital cost to build out to meet our standards." He concedes, however, that its growth could exceed the pace he has projected.

The company employs 175 people in Seattle and 10 in Oregon.