Prudential survey: Employers looking to outsource benefit administration
Managing employee benefits programs has become increasingly complex and so employers are seeking outside help, according to research from Prudential in collaboration with CFO Research.
The findings highlighted in the report, “A Rising Interest in Outsourcing Benefits Administration,” details how the complexity of remaining compliant with legislation such as the Affordable Care Act and the Americans with Disabilities Act has led employers to look at outsourcing some or all of their companies’ benefits administration and reporting requirements.
The survey of financial executives found 46 percent of employers were outsourcing or looking to outsource reporting and other regulatory requirements of the Affordable Care Act, 40 percent for American with Disabilities Act directives and 39 percent for Family Medical Leave Act mandates.
“The escalating regulatory burden placed on benefits programs makes them increasingly complex to administer,” said Jake Biscoglio, vice president for absence management and disability, Prudential Group Insurance. “Employers are finding it easier and cheaper to outsource, rather than build and maintain the expertise in-house.”
Another reason for outsourcing is that controlling benefits costs, particularly for health and medical coverage, remains the top priority for financial executives, according to the survey. Nearly 80 percent of the 180 companies included in the survey had revenues of more than $1 billion.
Despite being wary of the costs and administration of benefits programs, financial executives do not dispute their value. A majority, 63 percent, say employee satisfaction with benefits is important for their company’s success, and 65 percent believe employee benefits are critical to attracting and retaining employees.
This report is last in a series of five reports based on the 2015 results of an annual survey on the benefits landscape conducted by Prudential and CFO Research.
Want more information? Read the report. Want to speak with Jake? Contact Sheila Bridgeforth.
The Prudential Insurance Company of America