The United States’ stringency when it comes to healthcare regulations has had a major impact on HR health administration services (HAS). Predicted to witness a moderate CAGR of around 4% by 2020, the HR health administration services market in the US is undergoing a great deal of technological innovation. Defined as the process of managing the healthcare benefit plans of employees, HAS includes insurance plan management, prescription benefits management, claims processing, co-ordination with provider networks and insurance companies, and managing the healthcare plans of employees. As these processes demand a dedicated work force, employers usually outsource their healthcare management requirements to third-party administrators, who in turn engage with health insurers or self-insuring companies.
While it is clear that many organizations resort to health administration services with the goal of cutting costs, there are several other factors that have contributed to the growing demand for these services in the United States. Some of the key factors that have fueled the HAS market include:
- Need for better employee engagement initiatives
- Increase in outsourcing
- Compliance with stringent regulatory norms
- Adoption of green practices
One of the main focuses of HR departments is to engage and motivate employees in a way that helps enhance their performance. Addressing employees’ individual and family healthcare needs is one of the best ways to cultivate strong employer-employee relations. This is supported by 2015’s Gallup Research, which found that there was a growing need for better employee engagement initiatives in the US, as only 32% of employees were engaged by their respective organizations. Due to this reason, expert HAS providers are being hired by HR teams to ensure that employees get the best services available in the market.
The growing trend of outsourcing administration services is another reason behind the popularity of HR HAS providers. In 2015, around 40% of administration services, including HAS were outsourced to third-party administrators. This percentage is sure to increase in the forthcoming years as well. Analytics support, digitization of processes, improving efficiency of work, improving regulatory compliance, and helping in managing changes in employee healthcare policies are some of the key services delivered by HAS providers.
US HR – Healthcare Administration Services Market Segmentation by End-user Industries 2015 (US$41 billion)
Source: Technavio
HIPAA and ACA are some of the major regulations pertaining to healthcare services in the United States. In many cases, organizations do not have the appropriate work force to deal with compliance issues. This is when HR HAS comes into play. HAS providers have in-depth knowledge and expertise in managing stringent regulatory compliance issues.
Lastly, as the adoption of green practices has become an integral part of almost every organization’s work ethics, there is high demand for service providers who can assist with the implementation of these practices. HAS providers like Aetna, for instance, use an online sustainability assessment tool to measure the level of adoption of green practices in business processes.
With the help of their expertise, HAS providers have boosted the overall performance of a number of organizations and have emerged as an integral part of administration.
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The 2016 Procurement Market Intelligence Report on Global HR Benefits and Administration Services
