Dallas, Texas (PRWEB) May 07, 2014
The Health and Welfare (H&W) outsourcing market logged a 10 percent growth rate (reaching US$2.1 billion in annualized revenue) in 2013. This double-digit growth was spurred by healthcare reform measures in the United States, according to Benefits Administration Outsourcing (BAO) Annual Report 2014: Benefits in Alternate Paths, a newly released report from Everest Group, an advisory and research firm on global services.
According to the report, the global Benefits Administration Outsourcing (BAO) market grew at a steady rate of approximately 6 percent in 2013 (reaching US$6.3 billion in annualized revenue). Currently, the H&W segment represents one-third of the BAO market, and it is expected to continue to grow at a strong pace. The face of the H&W market is changing as providers enroll increasing numbers of participants in their private exchanges. Conversely, the pensions market, which occupies almost two-thirds of the overall BAO market, grew at a lower pace in 2013.
“The most significant movement we have seen in the BAO market in the past year is in H&W outsourcing, both in terms of traditional outsourcing and the creation of private exchanges,” said Rajesh Ranjan, vice president of Everest Group. “The implementation of the Affordable Care Act in the United States has had a major impact on H&W as employers of all sizes sought help dealing with mandatory auto-enrollment and increases in employee coverage requirements and compliance as well as communication needs and administrative burdens.
“Going forward, we will be closely watching the impact of private exchanges on this market,” added Ranjan. “Currently, less than 10 percent of participants are enrolled through private exchanges, compared to over 90 percent through the traditional H&W outsourcing route, but we expect this to shift. Most of the major providers – Aon Hewitt, Mercer, Towers Watson, and Xerox – already offer HIX [Health Insurance Exchange] solutions to their clients, and we expect ADP to join the league in 2014. H&W providers need to define their HIX strategy soon.”
Other key findings in this report include the following:
Everest Group has produced graphics illustrating the key takeaways from the report; these address the following topics and can be included in news coverage of the report with source attribution to Everest Group:
Everest Group’s BAO annual report provides comprehensive coverage of the 2013 BAO market across all geographies and industries. The report provides analysis across various dimensions such as market overview, spotlight on H&W outsourcing market, buyer adoption trends, solution and transaction trends, and service provider landscape.
About Everest Group
Everest Group, an advisor to business leaders on the next generation of global services, has a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. Established in 1991, Everest Group serves users of global services, providers of services, country organizations and private equity firms, in six continents across all industry categories. For more information, please visit http://www.everestgrp.com and research.everestgrp.com.