results for

Main image for News
Insight

The Evolution and Skinny on Benefit Administration Data Exchanges

By Pattie Zappone

With an EDI file exchange, data is gathered and mapped from the sender's system to the receiver's specifications or, what you've probably heard referred to as the "Carrier Spec".  Another familiar term, "834 File", is simply an EDI that must  abide by HIPAA 5010 standards. These Interchanges of information are limited to  facilitate one-way communication between sender (Benefit system) and receiver (Carrier), are scheduled with regular frequency and are sent in batches.  Processing an  EDI file, requires manual intervention, and that intervention is in the form of a person whose job it is to  physically extract the file from its drop point and process the data it contains through the receiver's (Carrier) system.  After the file is processed by carrier, discrepancies and errors are logged and sent back to the employer's Benefit Administrative contact to resolve.  This can  occur anywhere from 24 to 120 business hours after the file is sent. To resolve any errors/discrepancies requires additional steps from the Benefit Administrator and can delay processing of what often are new enrollments. 

In summary, EDIs are often  described as being an automated "process", while there are a few aspects that are automated in the creation of the EDI file and scheduling of that file to be sent, the actual interchange process has many manual steps along the way. 

For the most part there are two common types of ED files:

  1. Full fileswhere all enrollment/termination/demographic and dependent information from system are sent to carrier overwriting the most recent carrier information and adding any new information.
  2. Changes only files- where the benefit system only sends changes to enrollment or demographic information.

Let's not forgot about self-bill coverages.  In most instances,  self-bill coverages do not require an EDI to exchange enrollment/termination or change information between Ben Admin Vendor and Carrier. Essentially the Benefit Admin system becomes the system of record for managing enrollment/changes and carrier rules.    

The Future of Benefit Administration Data

To think that  the process for exchanging enrollment and benefit data is over 62 years old and has remained virtually unchanged  seems unheard of in an age where instantaneous is the expectation and same day delivery options are the norm.  

The tectonic plates appear to be shifting as Carriers and HCM solutions gobble up benefit administration solutions, and Benefit Administration solutions expand their partnerships and service offerings.  Be on the lookout for the API or Application Program Interface (API) replacing the EDI for many carriers, administrators and HCM Suites as a means to exchange data with Benefit Administration solutions.  APIs are setting the bar and allowing for scalable and rapid implementation timeframes, secure, synchronous, highly accurate bi-directional enrollment, and information exchanges.  This is setting an expectation with employers as they feel the constraints of the labor shortages. With fewer hours and limited resources to devote to implementations, testing, reconfigurations, and the daily administration required when managing processes and the information the system collects and sends, they're looking to true automation to fill gaps, save time and reduce error.