Benefits

Health Care Reform Driving Administration Outsourcing

By Rebecca Moore editors@plansponsor.com | May 07, 2012
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May 7, 2012 (PLANSPONSOR.com) - Health care reform and compliance complexity are leading more companies to re-think how they administer benefits and to consider outsourcing.

Forty-five percent of HR/benefits decision makers in mid-sized companies and 54% in large companies report that regulatory changes have made them more likely to outsource some or all of their benefits administration, as health care reform increases both the complexity and time required to administer benefits, according to a survey from ADP. 

Ensuring compliance is one of the top reasons survey respondents said they outsource benefits administration (54% of mid-sized and 49% of large). Employers also cited the need to access subject matter knowledge and expertise (50% of mid-sized and 41% of large) and reduce the administrative burden on internal staff (43% of mid-sized and 50% of large) as other key reasons for outsourcing.   

Nearly three out of 10 mid-sized companies (28%) and four out of 10 large companies (42%) report they are planning to outsource more services in the next 24 months.   

Among those already outsourcing, the vast majority of HR/benefits decision makers in mid-sized and large companies report that their outsourcing provider or providers have met or exceeded expectations (88% and 92%, respectively). Additionally, HR/benefits decision makers (80% of mid-sized and 91% of large) report that outsourcing at least some elements of benefits administration provided real value for employers and that outsourcing achieved several of their key goals.