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Administrative Costs
Administrative costs refer to outlays that are not directly related to the service or good a company is selling. For a standard business this could include computer systems, data entry personnel and the like. For a health insurance company, administrative costs refers to non-medical claim outlays. The other costs associated with providing benefits include claims processing, enrollment processing, legal services, accountants, advertising, overhead costs, etc… The Affordable Care Act sets limits on insurers’ administrative costs and profit.