Though we’re only just into fall, the nature of activity in the Benefits Administration market in 2015 provides important pointers to key strategic focus areas in 2016.

In the U.S., the emphasis will continue around Health & Welfare (H&W) services, stemming from the Affordable Care Act (ACA). In 2015, tier two H&W specialists such as Businessolver and TASC launched ACA reporting offerings, with many PEOs expected to follow suit in the near future.

As the entire benefits landscape shifts in the U.S., service providers have ramped up capabilities around key service lines such as private exchanges and spending account administration. For example, ADP launched its private exchange offering, which is focused on integrating with its other HCM offerings including payroll, HR, spending accounts, and its ACA offering Health Compliance.   Blue Cross Blue Shield has also partnered with Connecture to launch its BCBS Marketplace for retirees in 45 states. In addition to adding private exchange clients, most vendors will be focused on expanding and enhancing private exchanges for active employees and retirees in 2016.

In terms of spending account administration, the objective for tier one specialists will be to acquire tier two vendors to expand their client bases, which has already started to happen with, for example, TASC acquiring BMO Benefits Services.

In the U.K., the new pension rules providing more freedom and flexibility will lead to new offerings that include calculators and modeling tools to provide individuals with information and assistance.  To date, Equiniti has launched its RetireMe app and Aon Hewitt launched an online retirement offering, Bigblue Touch 4life, that includes the following:

• Access to an annuity broking service to compare prices and select the provider and annuity that matches employee needs
• Flexible drawdown
• Access to cash and a range of investment funds and strategies
• Access to advice.

Also in the U.K., attention in 2016 will focus on employee engagement and education around retirement planning.

Globally, initiatives around employee wellness will be on the rise next year. Newer offerings in the market include Mercer’s Health Pathfinder platform, which enables employers to leverage the latest health management solutions to reduce healthcare costs and cultivate healthier and more engaged employees, and Towers Watson’s web-based health management offering, HealthVantage. In addition, EAP providers (such as Ceridian who divested its H&W business to focus exclusively on LifeWorks), will be improving available services for employees while being more proactive about engaging employees.

Over the last few years, traction on the multi-country benefits front has been slow and steady, and this will continue at the same pace. Towers Watson, however, has aggressively expanded its capabilities in this space. Its biggest news is the merger with Willis, although prior to the merger both companies were strengthening their respective businesses as follows:

• Towers Watson acquired Metis Insurance to launch a benefits brokerage business in India, as well as launching a benefits brokerage business in Japan and South Korea
• Willis acquired PMI Health Group to expand its presence and product offering in the U.K., and partnered with Benefex for benefits admin technology and communications in the U.K.

Trends from 2015 plus future initiatives will be highlighted in NelsonHall’s next Targeting Benefits Administration market analysis project, which will start in December.