Outsourcing Doesn’t Always Mean China

Published May 2010

Most people associate something negative or unprincipled with the word “outsourcing”. The common misconception is that Americans are losing jobs to foreign workers in other countries. While this may be true in some cases, outsourcing can also be a great way for businesses to reduce costs and improve service quality while gaining access to outside expertise.

The independent study, HR Outsourcing Trends and Insights, by Hewitt Associates in 2009 found that one-third of companies surveyed are more inclined to outsource today than they were two years ago. Similar to Hewitt’s study, employer interest in BASIC’s Dependent Audit Administration has significantly increased in recent years.

Participants in the Hewitt study indicated that outsourcing continues to solve a number of operational challenges for companies and they consider it an effective part of their HR strategy. Listed below are the top reasons for outsourcing found in the survey as well as how BASIC’s Dependent Audit Administration service aligns with the benefits employers are seeking by outsourcing.

  • Reducing costs:Most organizations believe outsourcing can lead to lower costs. In fact, 65% of organizations that indicated cost savings as a primary outsourcing objective reported that they achieved their expected cost-reduction targets through their outsourcing programs.
    • BASIC Dependent Audit Administration: A typical return on investment is between 300-600%. In a recent Dependent Audit, a client realized a $270,000 annual cost savings.
  • Gaining access to outside expertise:In addition to needing specific domain expertise, companies also want to be relieved of the burden of making large investments in technology to maintain in-house systems and dedicating resources to meet challenging regulatory guidelines.
    • BASIC Dependent Audit Administration: Our proven audit process provides the resources and methodology needed to devote to a dependent eligibility audit.
  • Improving service quality:Considered the most common measure of success for outsourcing, 81% of respondents indicated that they met or exceeded their service quality targets.
    • BASIC Dependent Audit Administration: We work with employees through the eligibility, disenrollment and appeal processes, all along the way protecting HIPAA information.
  • Realigning/focusing on strategic HR priorities:Outsourcing helps remove the day-to-day administration of managing HR programs so HR can focus on delivering the business strategy and has more time to work with management on solving important business challenges.
    • BASIC Dependent Audit Administration: Studies show that anywhere between 3%-8% of dependents covered by an employer’s health plan are ineligible for coverage. By outsourcing, the employer is mostly removed from this anxiety ridden event and is less likely to be cast in a negative light.

As reported in PricewaterhouseCoopers’ Top 10 Health Insurance Issues in 2010, the demand for Dependent Audit Administration will increase as employers realize the cost savings of hiring experts to verify the eligibility of employee dependents for the established employer benefit plan.

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Call 800-444-1922 ext. 3 or email sales@basiconline.com to be put in touch with a Sales Consultant who can explain the finer details of our service. You can also view our Dependent Audit Administration webpageor request a proposal for our services by clicking.