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
Scope
- At least one of the following core-benefits areas – Health & Welfare (H&W), DB, and DC
- Deal length is at least two years
- All industries and geographies
Content
This report examines the dynamics of the global BAO service provider landscape and its impact on the BAO market. It focuses on how the service providers differentiate themselves. Based on the comprehensive Everest Group PEAK Matrix, each of the 11 BAO service providers are segmented into Leaders, Major Contenders, and Aspirants. The report also identifies a few providers as Star Performers based on their year-on-year movement on the PEAK Matrix. Additionally, this report also provides key insights on the strengths and areas of improvements of each service provider. Some of the findings in this report are:
- Aon Hewitt, Fidelity, and Willis Towers Watson emerged as Leaders in the BAO space
- ADP, Bswift, Businessolver, and Willis Towers Watson emerged as Star Performers
Everest Group has a complimentary four-page PEAK Matrix preview document for this service provider landscape report.
