As we spend time talking with clients and colleagues at health insurance companies, we have had many discussions recently about the challenges they face with modernizing their enrollment operations. For those who don’t yet have a private exchange, paper-based processes, especially for small to mid-sized employer group enrollment, continue. At the same time, the pressure on enrollment management teams continues to increase: They are asked to do more with less, increase volume at lower cost, reduce cycle time, and do all that with near-perfect accuracy. They know they need to move to an online process, but budgets and competing priorities may stand in the way.
For insurers who move forward, the payoff quickly offsets the time and effort. For instance, a large portion of manual, paper-based processing can be eliminated by adopting industry standards for exchanging enrollment-related transactions (aka the 834) with internal and ancillary systems. As we have discussed in previous posts about the history of the 834 standard for enrollment transactions and the 834 Federal File format used on the Federal exchanges, standards adoption not only saves time and money, it makes life easier for everyone. Now, because the Centers for Medicare & Medicaid Services’ (CMS) Federally Facilitated Exchanges 834 format, along with its companion guide, has been adopted by every carrier that participates on the Federal Exchange, insurers and their electronic data interchange (EDI) trading partners are better prepared to support enrollment automation.
We have certainly found this to be true with our clients. Nearly all can accept enrollments for health insurance products in this format without re-work or modifications to translators they already have in place. This dramatically reduces configuration costs and time for clients as they integrate with our private exchange platform and other partners for health insurance enrollments.
However, use of this standard does not solve every challenge. The 834 Federal format can’t eliminate errors that still occur when employee enrollment is completed using a manual process, from which the 834 file is generated. Correcting such errors is costly and time-consuming. In addition, although many insurers have adopted this format, many employers have not. The good news is that an online enrollment approach can address both of these challenges. By eliminating manual input, data quality improves dramatically, which in turn reduces costs associated with error corrections and makes the 834 data transmission flow smoother.
On top of those savings, modernizing enrollment with an online approach delivers savings in several other areas as well, such as shorter cycle times, improved security and a better overall enrollment experience for consumers and members. Moreover, as the graphic above outlines, modernizing can be achieved along an incremental path that ultimately positions insurers to leverage a full e-commerce approach across all business lines.
Yet, there is still another interesting nuance. In several recent discussions with health insurance executives, we have discovered that many insurers have separate, parallel efforts underway to modernize enrollment processing and launch their own private exchange. From Array’s perspective, the question is: Why consider enrollment modernization separately from a private exchange when you can just as easily get both?