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Employer-Reported Health Benefit Filings Show Professional Services a Top Growing Sector

 

October 30, 2023

Identifying the predominant business sectors and industries of an insurers’ customers can help payers better understand their own underwriting risks and those of their competitors. Utilizing data contained in Mark Farrah Associates’ (MFA’s) 5500 Employer Health Plus TM, company analysts investigated one sector, “Professional, Scientific, and Technical Services” (Professional Services), which, from an actuarial perspective, typically includes relatively low-risk businesses within specific industrial classifications. It is also one of the fastest growing sectors based on reported insured, according to Form 5500 data. Analysis of detailed information on the types of businesses that contribute to the sector’s overall composition indicates that companies in the “Other” category reported significant growth in number of insured, with “Computer Systems Design and Technical Services” at a distant second. The following graph illustrates the number of insured reported for the top five industries within the Professional Services sector over the most recent five years of available data.

 

 

During this period, the Professional Services sector grew by nearly 54%, while the Other Professional, Scientific, & Technical Services industry within the sector expanded by 92%. Most of this growth can be attributed to ADP TotalSource, Inc. (ADP), a professional employer organization (PEO) based in Roseland, New Jersey. PEOs are a rapidly growing industry, one that MFA has called out in previous briefs for its significant enrollment and financial metrics. Over the last five years, ADP’s number of insured has increased by over 238%, while its closest competitor, Insperity Holdings, Inc. (Insperity), headquartered in Kingwood, TX, has grown nearly 37%. As illustrated below, multiple insurers support these PEOs.

 

 

  • In terms of reported premiums, UnitedHealth is the top insurer for both PEOs, reporting over $1.6 billion (B) in premiums from ADP (a 31% increase over five years) and over $2B in premiums while partnered with Insperity (a 54.6% increase).
  • CVS has expanded by over 35% in premiums with ADP, reporting a five-year increase of roughly $293 million (M) and currently accounting for over $1.1B in annual premiums, mainly through its Aetna line of health and ancillary products.
  • Elevance, through its business with ADP, has increased reported premiums by 67% in the last five years, representing nearly $189M in new premiums, primarily through its Empire HealthChoice and Blue Cross of California plans.
  • Of the major insurers supporting ADP, Kaiser Foundation saw the largest percentage increase during the period, growing premiums by 79.5%, or $113M; Kaiser’s business with Insperity was similarly successful, growing by 58.6%, or about $47M.

About 5500 Employer Health Plus

The data used in this analysis brief was obtained from Mark Farrah Associates' 5500 Employer Health Plus. This tool has been designed to simplify the analysis of employer health & welfare benefits including medical, dental, vision, disability, and other benefits. MFA’s 5500 Employer Health Plus uniquely focuses on health & ancillary benefits purchased by private sector employers and the relationships employers have with contracted insurers, administrators, and brokers. The user interface allows for both detailed and summary level data retrieval. Data sources include Form 5500 filings and related schedules for companies that indicate they provide health & welfare benefits.

About Mark Farrah Associates (MFA)

Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, 5500 Employer Health Plus, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.

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