Highlights and Trends in the HRO Market for H1 2013: Part 2

Amy L. Gurchensky, HRO Research Analyst, NelsonHall

Last week, I zeroed in on specific market activity within the payroll, learning and RPO service lines. This week, I’ll take a closer look at H1 2013 activity within benefits administration and MPHRO as well as provide some insights on what to expect in H2 2013 based on NelsonHall’s recent HRO Confidence Index.

Benefits Administration

Contract signings aside, there has been a plethora of activity within benefits administration in H1 2013, including:

• New offerings:
  • Mercer launched a private benefits exchange, Mercer Marketplace
  • Buck Consultants launched an automatic enrollment offering in the U.K.
  • Secova launched a Coordination of Benefits (COB) audit offering to coordinate benefits with insurance carriers
• Acquisitions: Wageworks acquired Crosby Benefit Systems and Benefit Concepts to strengthen its H&W administration offering, including reimbursement account and COBRA administration
• Partnerships:
  • Fidelity partnered with Extend Health, a Towers Watson company, to provide retiree healthcare services
  • JLT Employee Benefits partnered with Vielife for health and wellbeing services in the U.K.
• New technologies:
  • Xerox launched an account-based benefits portal, BenefitWallet, to assist with managing multiple health accounts on one platform, including HSAs, HRAs, FSAs, HIAs (health/wellness incentive accounts) and other specialized services
  • Aon Hewitt launched an absence management tool, 360 Absence Solutions, to help clients manage absence-related costs, compliance risks, the administrative burden and lost productivity
• Educational resources:
  • Mercer and ADP both launched websites to provide information on healthcare reform
  • Ceridian launched an auto-enrollment knowledge center in the U.K.

MPHRO

In recent years, the MPHRO market has been relatively quiet in terms of contract announcements and H1 2013 was no exception. However, my last MPHRO research study, published in February 2013, revealed that the market is very much alive with new wins and contract renewals from all the major vendors, including IBM and Accenture. In fact, IBM recently won a new seven-year, multi-country MPHRO contract, which was bundled with F&A outsourcing services. Other wins include ADP and Marriott Vacations Worldwide for core HR, payroll, time & labor management and talent management covering ~9.2k employees.

Many vendors have been focused on their strategies for expansion, including Aon Hewitt with its acquisition of OmniPoint Workday Services. Although still early, NelsonHall expects ADP to make inroads in LATAM with its MPHRO services since it added RPO capabilities in this region from its acquisition of The RightThing and now expands its payroll footprint from the Payroll S.A. acquisition.

H2 2013

So what does the rest of the year have in store? NelsonHall’s recent HRO Confidence Index survey finds that overall expectations for HRO revenue growth remain at the same level as those reported for the last five quarters; with payroll leading followed by RPO. Top industry sectors for HRO services include healthcare, pharmaceuticals and high-tech. By geography, vendors have reported increased confidence for revenue growth in Central and Eastern Europe and Central and Latin America.

Needless to say, it will be interesting to see how the rest of the year unfolds for HRO.

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HRO and Innovation – Getting Practical

Linda Merritt, HRO Research Analyst, NelsonHall

Innovation in multi-process HRO (MPHRO) has been a topic of discussion, and some contention, since the early mega-deals that created the modern MPHRO market more than ten years ago.

Even in the early days there was a desire for innovation, but there was also a lack of common definitions and mutual understanding, along with difficulty in articulating innovation in contract language.

There was an even greater barrier – systems spaghetti. Early MPHRO clients had highly-customized ERP infrastructure, aging legacy systems, and third-party applications, much of which may have been non-centralized and non-integrated. Each major customer was in their own bubble of services and systems. It quickly became apparent that it would be hard to add new and different innovations within the constraints of the contracts and the technologies.

Platforms for Innovation

Major MPHRO service providers now have global multi-client service delivery and data centers with sophisticated workflow processes. Early clients have been moved bit-by-bit into the common support infrastructure, even if they remain on their own, licensed ERP systems.

Many HRO clients are ready for increased standardization and multi-client platforms to reduce cost and to improve performance. Innovative cloud-based SaaS and services platforms are opening up new services to the mid-market and parts of the large client market:

• Clients on a shared service platform benefit from ongoing incremental improvements
• Clients benefit from access to new products and services without paying a significant portion of the R&D needed for a one-off innovation.

Some tension between continuous improvement and innovation is natural, as the line between an “included enhancement” and what is “new and different to be added as an extra charge” looks very different depending on whether you are a buyer or a supplier.

Collaborative Innovation

Client user groups support both HRO improvement and innovation. Vendors were originally reluctant to let clients communicate with each other (partially because the clients might “gang-up” on the vendor – and sometimes they did!).

Companies like IBM and Xerox were leaders in developing client advisory boards. These interactive groups provide feedback on the services, give input into common needs, and even offer guidance on parts of the vendor’s development roadmap. They are not just “the voice of the customer”; they are also a built-in base of beta testers. Willingness to put some skin into the game is also a great way to test market viability and further strengthen relationships.

Infrastructure of Innovation

Buyers can develop their processes for HRO innovation in the following ways:

• Assess vendors for innovation capabilities as part of the selection process
• Develop the language and mutual expectations for measurable innovation upfront and include in the terms of contract. Include who pays, and when, determine if there will be vendor incentives, and clarify the client’s role
• Use the governance process to jointly monitor, manage, and measure improvements and innovations over the course of the relationship.

The good news is that we are beginning to build the HRO infrastructure for future innovation; common language, standardized multi-client platforms, and client user groups.

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In Times of Crisis, HRO Business Continuity Means Business: Part 3

Linda Merritt, HRO Research Analyst, NelsonHall

A deeper dive into business continuity planning (BCP) will wrap-up the series on how HRO can help clients during a crisis.  

As a HRO buyer, in addition to knowing the plans for transferring services to back-up systems and centers, it is as important to know that your account team will be ready, capable, and dedicated to keeping you and your employees serviced.

Communication and Partnership

Aon Hewitt, Mercer, NorthgateArinso (NGA), and Xerox all stressed the need to communicate early and often with their clients in preparation and throughout a disaster.  

• “No surprises” is important in an emergency and Mercer began its outreach to clients the Friday before the storm made landfall on how to help meet client needs and to provide updates on Mercer’s plans and preparations.

Disaster Central

Coordination in a crisis is critical when normal operations and lines of communications maybe disrupted.

• Using its prepared playbook, Xerox sets up a situation room and cross-functional team for handling major events and any contingency needs that arise.
• For several days after Superstorm Sandy, the Xerox New Jersey HRO office was inaccessible with no power and impassible roads. While designated critical personnel were able to work remotely, normal operations shifted to the partner team in Manila and service levels were maintained throughout including the transfer back to New Jersey.
• Xerox knew that it wasn’t enough just to have a generator since it would need fuel for perhaps an extended time. It, therefore, already had contracts in place with local suppliers and was able to get fuel and transportation when others couldn’t. In addition to fuel deliveries, Xerox had a bus available to pick up employees from several designated locations.

Practice Makes Perfect

Testing is what makes BCP more likely to work in the real world where no matter how good the plan, unexpected events will occur. Ask how often BCP is reviewed, updated, and tested. 

• NGA holds surprise BCP tests where no one knows in advance it is coming or the scenario used for the mock disaster.

Aon Hewitt’s BCP covers specific needs by location, skills and knowledge coverage, and technology back-up.  Cross training in advance helps Aon Hewitt ensure the back-up buddy team will be prepared for specific client transactions.

Individualize

Needs vary by client and some may be in different parts of the HR monthly or annual cycle which impacts the services needed during an emergency.

• An NGA client planning for a new system go-live on January 1^st did not want a delay because of Sandy but needed to pull some of its own team away from implementation. NGA was ready and able to step into the gap and is providing the client some peace of mind in difficult circumstances.

Business continuity and disaster recovery can and should be a decision factor in the HRO vendor selection process as it illustrates both sides of HRO, operational excellence, and the care and concern that sets HR and HRO apart from other services.

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In Times of Crisis, HRO Is Caring and Concerned: Part 2

Linda Merritt, HRO Research Analyst, NelsonHall

Some think caring emergency response may be compromised by HRO, but response capabilities can be better with HRO. Major vendors have multiple service centers and back-up capabilities at levels above what is economically feasible for most organizations. Also, customer care and concern abounds when HRO vendors maintain an internal culture that values and recognizes customer service.

Care and Concern

Experienced HR people make up much of the client-facing service representative staff at HRO vendors of every sort and HR people are wonderfully caring folks, whether they are on your payroll or a service provider.

• Being There: As mentioned in Part 1, Mercer was prepared in case they took a direct hit from Superstorm Sandy in the Boston area. When needed, Mercer will put up available service personnel in nearby hotels. Even though some folks were personally impacted, 75% of the staff showed up on Monday and 90% showed up on Tuesday.
• The Spirit of Service is Global: Jodi Hayes-Roth, North American Service Delivery and Operations Leader at NorthgateArinso (NGA), said their representatives feel very loyal and connected to their clients and make every effort to be present even though there are back-up centers available. The spirit of service is as strong in client service centers like Manila as it in the U.S. or Europe.

Practice What You Preach

To have staff remain dedicated to their clients, they need to be treated with the same care and concern. Both NGA and Xerox have client service centers in the Philippines where typhoons and monsoon flooding can impact business services and personal lives. A great business continuity plan (BCP) addresses both issues.

• Outreach: When the NGA Manila office was impacted by flooding, there was outreach to contact and ensure every employee was safe and accounted for and the team raised funds to help co-workers in need.
• Safe Shelter: Michael Sigmund, General Manager of Operations at Xerox, recounted what happened when a monsoon hit the Xerox Manila service center that supports many of Ford’s global employees. The building is built with hurricane-standard materials and a generator back-up system and there are sleeping quarters to provide safe shelter for staff and their families. While work can be shifted to the partner center in Michigan, Xerox invested in keeping local employees safe and the employees wanted to support their customers. Even though short staffed, they kept tier 1 services operating while some tier 2 work was transferred. In return the team was recognized at a Ford leadership meeting.

There are many more stories out there of people working anywhere they could find Wi-Fi, getting to work without transportation, and carefully monitoring transfers to protect service levels even in the midst of a declared multi-state disaster.

Recognition of people that demonstrate a high sense of ownership is important.  Aon Hewitt, Mercer, NGA, and Xerox all shared great examples from formal to informal and local to enterprise-wide recognition that they provide. 

Stay tuned next week for more on HRO business continuity planning.

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In Times of Crisis, HRO Has Your Back: Part 1

Linda Merritt, HRO Research Analyst, NelsonHall

Whether it is a hurricane, typhoon, blizzard, earthquake, or flood, the weather can create a crisis for businesses, customers, employees, public organizations, and service providers alike anywhere around the world.

The latest natural disaster in the U.S. is Superstorm Sandy and it has severely impacted millions of people across several states. Early estimates are upwards of $50bn in damages. The cost assessment does not begin to account for the loss of life, loss of a family’s home and personal belongings, or the impact on small and large businesses in the area. Our hearts and prayers go out to all of those impacted.

I reached out to several HRO vendors including Aon Hewitt, Mercer, NorthgateArinso, and Xerox on how they support clients in times of emergencies and how they ensure services are provided when they are also impacted.

Be Prepared and Proactive

Some disasters, like hurricanes, allow time for specific contingency planning in addition to the established business continuity protocols. One of those preparations is to consider the HR service cycle and what is occurring during the impending crisis.

For vendors providing benefits administration services, Sandy was heading into heavily populated business centers during annual benefits enrollment. Examples of actions taken included:

• Contacting clients: Jocelyn Purtell, U.S. Operations Leader for Mercer, said they began pre-storm planning the Friday before hurricane Sandy made landfall. Mercer considered the impact on its clients and whether the storm would hit its client service center in the Boston area. They then reached out to the clients most likely to be impacted to let them know their plans and preparations.
• Extending open enrollment periods: Aon Hewitt, Mercer, and Xerox all collaborated with clients on extending the annual enrollment period. One client wanted to quietly allow an extended “correction period,” others extended open enrollment and asked for assistance in communicating with employees to get the word out. Pat Quenan, Aon Hewitt Practice Leadership V.P., reported that 40% of its benefits administration clients extended open enrollment.
• Amending policies or standard practice: Mercer has been able to make suggestions to clients on how to handle crisis exceptions (e.g., what to do if a short-term disability is in process or ready to expire; how to handle commuter benefits in urban areas affected like New York City; etc.).
• Providing information: Aon Hewitt knows that retirees may be concerned about any delays to pension check delivery and provided information on its voice response system and website about possible delays in mail delivery by zip code. 

Asking about business continuity and disaster recovery is standard practice in an RFP, and it is important to know a HRO service provider’s capabilities. The reality is something more and is embedded in the strength of client-vendor relationships and culture that values dedicated customer service.

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Countdown to the 2012 HR Technology Conference

Gary Bragar, HRO Research Director, NelsonHall

This year’s HR Technology Conference is just twelve weeks away. It will be held in Chicago from October 8–10. Be sure to check out the agenda, especially the new outsourcing track, which includes the following presentations:

• Cisco Uses RPO to Hire Up to 15,000 a Year, presented by Mark Hamberlin, VP of HR Global Staffing at Cisco and Rebecca Callahan, President of Randstad Sourceright
• Ericsson Outsources Global Payroll in Manila, presented by Mark Howes, HR Director of Asia Pacific at Ericsson and Mary Sue Rogers, Global Managing Director of HR Managed Services at Talent2
• Benefits in a Time of Uncertainty, a panel discussion including Artell Smith from Aon Hewitt, Brian Johnson from Fidelity Investments, Norbert Englert from Mercer, Gail McKee from Towers Watson, and Tom Maddison from Xerox Corporation
• Whirlpool Leverages RPO to Transform Talent Acquisition, presented by Lynanne Kunkel, VP of HR at Whirlpool North America and Rudy Karsan, CEO of Kenexa.

I’ve attended the conference the last two years and continue to find it an invaluable investment of my time to:

• Attend presentations
• View technology exhibits
• Network with peers.

Presentations: In addition to Outsourcing, session topics include:

• Strategic View
• Talent Management
• Social in the Enterprise
• Workforce Analytics and Planning
• HCM and Workforce Management
• Recruiting
• Expert Discussions.

Whether your company has outsourced or continues to do everything internally, there are bound to be several sessions that will teach you how to improve HR in your organization and be a better business partner. When I was on the buy-side prior to joining NelsonHall, I would attend such HR conferences to:

• Learn about the broader industry
• Think about how our HR outsourcing contract compared to others
• Get ideas on improvements we could make.

Technology Exhibits: Since technology is changing so rapidly, it is often difficult to keep up with new applications that are available. The conference is a great way to get exposed to a broad-range of recent innovations, e.g., ADP’s Mobile Application, talent management offerings, etc. You can stop by any booth and see a demo; there is no pressure and vendors are excited about their new products and services and are happy to show you.

So here is your chance to make a difference at your organization; you might stumble onto a better, more user-friendly technology for example. Even if you are not the decision-maker, you can always tell your organization about it when you return and request a customized demo. Alternatively, if you are already outsourcing, you might see something that you don’t have and can bring it to your provider’s attention.

Network: The conference provides an opportunity to expand your network with others including HR practitioners, buyers, providers, analysts, etc. I also like to meet individually with companies I do business with and others I want to learn more about. In addition to the daytime events, there are evening socials too. HR deserves to have fun!

As a reader of my blog, you are entitled to a discount. Register for the conference and enter promotion code HRO12 to save $500.

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PPACA: Pandemonium Today, Panic Later, Prosperity for HRO

By Amy L. Gurchensky, HRO Research Analyst, NelsonHall

It was pandemonium after the United States Supreme Court announced its ruling upholding the Patient Protection and Affordable Care Act (PPACA). The outstanding decision left so many in a holding pattern pending the constitutionality of the act.

Now that the decision is more firmly settled for the time being (primarily pending the November presidential election), U.S. states and organizations will have to take more definitive steps in securing exchanges and evaluating whether to offer health insurance plans or pay the tax penalty.

In fact, the state of Florida, via Florida Health Choices, set the wheels in motion earlier this week ahead of the ruling when it awarded a $68m contract to Xerox to administer a health insurance exchange for nine years. Services include:

• A web portal and online plan selection tool
• Eligibility determination and enrollment management services
• Customer contact center services.

Other states that have delayed taking action are still expected to meet the law’s timelines. The same is true for employers that have yet to make employee healthcare decisions that take the PPACA requirements into consideration. Watch for a spate of webinars by benefits service providers to remind all of us of the changes still to come in 2014 through 2018.

Regardless of today’s decision, HRO and particularly benefits administration service providers have been sitting in a sweet spot.  Vendor interviews for NelsonHall’s recently published “Targeting Benefits Administration” market analysis revealed that business has been going on as usual with many employers turning to benefits administration vendors to implement services that are focused on controlling the cost of rising health care such as:

• Dependent eligibility audits to remove ineligible dependents from plans
• Wellness programs
• Improving absence management
• Switching to high-deductible health plans with associated health savings accounts.

The published report explores the current state of benefits administration as well as the future market and its growth over the next five years by geography and service line including:

• H&W administration
• Reimbursement administration
• Leave of absence administration
• COBRA administration
• Flexible benefits administration
• DC administration
• DB administration.

The analysis also looks beyond legislative implications in the U.S. and new offerings that have emerged such as health insurance exchanges to explore the automatic enrollment requirement in the U.K.

The greater unresolved issue at hand, however, is how to control the rising cost of health care that is already arguably unsustainable as evidenced by the more than 30m Americans currently without insurance.

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What are the Top Global Skill Shortages?

Even when the U.S. unemployment rate was over 10%, we’ve heard that the unemployment of skilled workers with college degrees remained low at ~4-5%, and we’ve read data on just how bad the skill shortage is, including ManpowerGroup’s findings that 52% of U.S. companies are struggling to fill key jobs. We’ve also heard from me as an analyst (and former HRO buy-side client), pointing to the fact that development and retention of talent are more paramount than ever. But not as much has been written about what are the top global skill shortages. Well not until last week when U.K.-based global recruitment and RPO provider Hays issued a good concise summary of the top ten global skill shortages.

The list divides the skills by soft skills and hard skills that are in shortage globally.

Soft Skills

• Languages
• People and communication
• Team management and leadership
• Organization.

Hard Skills

• Financial and budgetary
• IT
• Green skills
• Procurement and negotiation
• Research and development
• Healthcare.

Beyond being good for job candidates and employees to know the skills they need to focus on; employers need to do a better job of investing in their workforce to develop and retain the talent that they already have. In fact, employees are looking for that. Mercer’s newly released eBook, “What’s Working Around the World”, points to the fact that career advancement and training opportunities are among the top priorities of the employee value proposition in many countries and are needed to address low levels of employee engagement.

As I get ready to publish my next global learning BPO report, I am optimistic to hear that talent management focus is no longer just a desired priority but is now a business imperative. Clients are increasingly focused on learning linked to talent management, including the linkage of learning to performance management and developmental plans. To meet client needs to attract, develop, and retain talent, vendors have been developing their talent management capability. This includes MPHRO vendors such as Xerox, Aon Hewitt, Talent2, IBM, and Accenture, whose talent management offering includes workforce forecasting and analytics, recruitment, performance management, succession planning, and learning.

In the report, I also wrote about the advent of social learning. For now, I’ll just say that speed to competence, followed by how the new generation of employees that are entering the workforce wants to learn, as well as the need for improved talent management, are what’s driving the acceleration of social learning.

If you are not already following me on Twitter, please do so at @GaryB_NH as I will tweet when the LBPO report is published. I’m targeting the 30^th of April, in time for my presentation at the HRO Today Forum on May 1^st titled State of the Learning BPO Marketplace and the Emergence of Social Learning.

Gary Bragar, HRO Research Director, NelsonHall.

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U.S. Jobs Grow – How Will It Impact HRO

By now, most have heard last Friday’s favorable jobs news.

In the U.S., 243,000 jobs were added in January, bringing the unemployment rate down to 8.3%, and as noted on one of the staffing provider’s earnings calls last week, down to 4.2% for college graduates. Government jobs have contracted as expected, while the private sector had the gains in the services industry, specifically in leisure, hospitality, education, healthcare, and retail, and in manufacturing, including construction.

Also last February 3, Randstad reported a five-point rise in its U.S. Employee Confidence Index.  The index measures the workers’ confidence in their personal employment situation and optimism in the economic environment. This is the biggest increase since the survey started seven years ago.

With good reason to be optimistic, many RPO providers are realizing the gains with increased hiring volumes by existing clients. Even before this welcome employment news, 2011 had been a good year for HRO. In RPO, many vendors achieved significant growth, including Kelly OCG, whose RPO revenue was up 40% year-over-year from 2010; Pinstripe was up 58% y-o-y with 21 new contracts and extensions; and for Q4, Kenexa reported an RPO growth of 54% y-o-y.

But the benefits go far beyond RPO. Increased hiring bodes well for providers of payroll, benefits, and learning as the number of employees they serve increases. For example, ADP, who already pays 1 of 6 U.S. employees, announced the number of employees on its U.S. client payroll increased by 2.8% in fiscal Q2 2012, for the period ending December 31, 2011. Benefits administration providers including Aon Hewitt, Fidelity, and Mercer reported numerous contract awards in 2011. In MPHRO, in North America, ADP won several new contracts, while IBM was awarded a large MPHRO contract with Air Canada and NorthgateArinso awarded a seven-year MPHRO renewal by Fifth Third Bank. In learning, vendors including Raytheon, Xerox, and Accenture won several contracts. There are more updates to follow on learning as NelsonHall is currently conducting a global learning BPO market analysis.

However, a few words of caution by ManpowerGroup were given last February 3 that demand is expected to continue to fluctuate and it would be prudent for employers to adopt flexible workforce models that include: full-time, contingent, and virtual-skilled workers to ensure productivity.

There are a few key implications here:

• Providers who haven’t yet provided recruitment services that include RPO, MSP, and Contingent Workforce services would be prudent to evaluate doing so and/or consider partnering with a vendor that does
• Given the ManpowerGroup statistic that 52% of U.S. companies are struggling to fill key jobs, focus on the development and retention of talent is more paramount than ever. Buy-side organizations should be continuously monitoring employee satisfaction, reviewing attrition rates, conducting exit interviews to find out why people leave, and developing action plans to improve organizational effectiveness. If buyers do not have this capability, they may want to consider a talent management vendor who can help them, which has become a key HRO vendor focus and for good reason!

Gary Bragar, HRO Research Director, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.

Health Savings Accounts on the Rise

The utilization of health savings accounts (HSAs) is rising, creating a win-win for employees, employers, and HRO benefits providers. Let’s take a look at the results of two recent studies to find out why.

Buck Consultants conducted a survey (http://bit.ly/uu10es), commissioned by its parent, ACS, A Xerox Company, which revealed that HSAs are not only saving employers and consumers money, but also helping employees (and retirees) make better decisions about their healthcare. Consumers of HSAs are putting aside more money for potential medical costs than they did before (69% of those enrolled in High Deductible Health Plans [HDHPs] contributed an average of $1,000 to their HSA accounts  for individual coverage, and $1,500 for family coverage). They are also engaging in healthier lifestyle choices and doing more research for preventative care. Employers report that the cost of providing an HSA-qualified plan is less than that of a standard Preferred Provider Organization (PPO) plan. You might be thinking, this is good for the employer, but what does the employee think? Well, 72% of account holders chose the HSA-qualified plan even though they had other plan options, and 82% said their selection was based on the ability to save tax-free money.

According to the results of a survey released by Mercer (http://bit.ly/vZiiFL), due to the rising cost of healthcare plans and cost per employee, employers are taking action to try and keep costs down, e.g. nearly a third with 500 or more employees offer consumer-driven health plans, i.e. HDHPs linked to HSAs or health reimbursement accounts, up from <25% in 2010. Because of the high deductible to the employee, they cost less than other plans, around 20% less per employee than a PPO.

Here are two examples of leading benefits administration vendors helping their clients:

• ACS, one of the first providers to implement an HSA in 2004, has 25,000 employer implementations and $1 billion in HSA assets
• In 2010, Fidelity increased its number of HSA clients by >50% while adding 22,000 new indiviudal HSA accounts.

Providers can help with further education. Focusing on employees, I myself did not understand HSAs at first. I’m in my fourth year of having an HSA combined with my HDHP. First, let me say that I’m not the HSA spokesperson and there are pros and cons to any plan that need to be evaluated on an individual basis. The upside for those not familiar – speaking for my HDHP consumer-driven health plan I opened an HSA with – is that there are no co-pays and no forms to fill out. Preventative care is free, e.g. annual physicals. So if you are healthy, there are no costs except your monthly premium. But if you do get sick and need to go to the doctor, you pay out of pocket until the annual deductible is met, then in-network pays a high percentage until you reach your annual yearly max—that just happens to be approximately the same as the annual max I can contribute to my HSA; and like an IRA, the amount you contribute is deductible on your income tax.

HRO providers that can help clients navigate through the intricacies of healthcare will be greatly valued!

Gary Bragar, HRO Research Director, NelsonHall

Interested in reading the latest HRO news from NelsonHall? Subscribe to our newsletter by emailing amy.gurchensky@nelson-hall.com with “HRO Insight” as the subject.