Benefits Administration Outsourcing (BAO) – Service Provider Landscape with PEAK Matrix™ Assessment 2016

The Benefits Administration Outsourcing (BAO) market is a consolidated space dominated by a handful of players. However, the recent healthcare reforms and the strategic shift from Defined Benefits (DB) to Defined Contributions (DC) have created increased outsourcing opportunities for service providers, especially in the mid- and large-market space. As consumerism becomes the key focus area, service providers are looking to expand the services offered to focus on the “consumer”. The rise in demand for consumer-driven health plans, voluntary benefits schemes, self-service benefits portals, and private Health Insurance Exchanges (HIX) are a testament to this fact.

The service provider community has also started focusing on value-added service offerings with the majority of them offering lifestyle as well as financial wellness programs such as financial & investment planning tools, health & lifestyle coaching, smoking cessation programs, incentivized fitness programs, or complete health assessments.

Buyers, too, are becoming increasingly aware of the important role of benefits in helping reinforce their brand to attract and retain top talent. With the looming ACA reporting and Cadillac tax, operational efficiency, cost-effectiveness, and legislative compliance become even more important for buyers across the board. Thus, buyers need to understand the service providers’ value proposition, while taking a holistic view of their own requirements, to create an effective and successful engagement.

In this research, we analyze the global BAO market across the following dimensions:

• BAO PEAK Matrix 2016
• Everest Group’s analysis of service providers