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Healthcare reform complexity leads to increase in benefits outsourcing

Posted on October 13th, 2011 Read time: 1 minutes

According to a recent report by Dallas, Texas-based advisory research firm Everest Group, HR outsourcing services for the global benefits-administration outsourcing (BAO) market are growing, Human Resource Executive Online reports. This is due primarily to the increased complexity and administrative requirements of healthcare reform.

Specifically, the BAO market is growing at an annual rate of 12.5 percent, recently crossing the $5 billion threshold.

"While cost reduction, compliance and improving employee engagement continue to be drivers of BAO adoption, the theme for 2010-2011 was healthcare reform in the United States," Rajesh Ranjan, research director and a leader of Everest Group's business process outsourcing research program, told the news source. "Healthcare reform brought increased enrollment and introduction of insurance exchanges, along with increased regulation of insured and self-insured insurance plans."

Ranjan added that healthcare reform is so complex that the challenge of understanding and implementing it has proven difficult for businesses. The situation has been exacerbated by the fact that internal experts have diminished in number because of the recession.

CBSNews reports that the $940 billion federal Healthcare Reform Bill aims to expand insurance coverage to 32 million uninsured Americans and reduce the deficit by $143 billion over 10 years.  

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