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Everest on Healthcare Reform and Benefits Administration Outsourcing

by: Karen Cayamanda

Wednesday, September 28, 2011 |

Everest Group, a consultancy and research firm, reported a 12.5 percent growth in the Benefits Administration Outsourcing (BAO) market. The current upsurge in demand for BAO is primarily driven by employers who need direction and advice in complying with healthcare reform measures recently introduced in the US. While the industry has long been sustained by the need to reduce cost and improve employee engagement, news on healthcare reform brings employers to increase enrollment and regulation of insurance plans.

Research director Rajesh Ranjan says it will take years before the said reforms are in its full effect, but a number of provisions are expected to directly affect companies’ benefit plans for the year. Buyers look into outsourcing in an effort to understand and navigate through the reforms as well as identify ways to lessen costs.

Highlights in the Benefits Administration Outsourcing segment

More highlights in the report concerning the BAO segment:

  • North America remains the strongest market, while demand potential is seen in the UK, Germany, and the rest of EU.
  • Large enterprises increased its use of BAO in 2010-2011, 76 percent of participants managed belong to this segment.
  • The manufacturing sector is the highest proponent of BAO adoption but demand is expected from the government and services industries. 

Aon Hewitt and Fidelity are the largest service providers in the BAO market, holding close to half of the market share. Other players included in the report are ACS-Xerox, ADP, Infosys, Secova, and Towers Watson.

The BAO industry is a competitive market and mergers continue to spur progress in the industry. Providers continue to thrive and differentiate themselves by altering technologies, by improving service models and processes, and by specializing based on scope and geographical location.

A webinar will be held on October 11, 2PM GMT to present the rest of the findings. To register, visit research.everestgrp.com/Events/Webinars.

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