February 09, 2022
Asked & Answered: What group benefits carriers should know about LDEx
If you’re in the group benefits industry, you’ve probably heard the term LDEx, i.e., LIMRA Data Exchange Standards. Whether you’re actively adapting your systems to accept LDEx-formatted enrollment data or have only seen the term in passing, there’s a lot happening around this opportunity and, of course, a lot for carriers to consider.
LDEx won’t immediately solve all of our industry’s data exchange challenges, but it’s a step in the right direction. MetLife, Guardian, Sun Life, Aflac, and other industry leaders are members of the LIMRA committee tasked with developing the LDEx, reflecting its transformative potential. Some carriers, however, have a myriad of questions.
Ideon, also a committee member, created this primer to answer basic questions about the standards and offer suggestions for leveraging them with minimal effort and expense.
What is LDEx?
The LIMRA Data Exchange (LDEx) Standards® are a set of rules—for terminology, formatting, content, and delivery—that facilitate digital communication between benefits administration (BenAdmin) platforms and insurance carriers. They are meant to replace various ad-hoc formats, such as EDI 834, for transmitting data about employee enrollment and eligibility in group benefit plans.
What are the benefits of LDEx for carriers?
If implemented broadly, LDEx will substantially reduce the complexity and expense of receiving enrollment information from BenAdmin platforms. Without LDEx, carriers typically spend weeks to months setting up and testing variations of EDI connections for each new group they enroll. If the industry uses LDEx, there will be greater consistency and accuracy throughout the integration and testing process, reducing the resources carriers must allocate to adding and managing groups.
As industry adoption increases, carriers will be able to connect more easily to benefits platforms and other insurance technology providers, dramatically improving the user experience for members who want to manage their eligibility through those platforms.
Ultimately, brokers, HR teams, and members will find that enrolling and modifying group benefits will be faster and more accurate. In today’s competitive environment, this is a business imperative for insurance carriers. Increasingly, brokers and BenAdmin platforms are steering their group clients to insurance carriers that make the enrollment experience as easy and automated as possible, across the software they use today.
Who created LDEx?
LDEx is sponsored by LIMRA, a non-profit consulting group and trade association that works primarily with the life insurance industry. The standards were developed by a steering committee composed of 40 executives from group benefits carriers and insurance technology companies.
What capabilities does LDEx provide?
The initial standards, released in January 2020, covered a wide range of benefits, including dental, vision, disability, critical illness, and life products. More recently, it has been expanded to include medical plans, flexible spending and health reimbursement accounts, paid family leave, and employee assistance programs.
The LDEx standard covers information about benefit enrollment, eligibility, and member changes. It also allows carriers to communicate data issues and coverage confirmations back to the BenAdmin provider.
The standards are designed to communicate transactions using structured XML files, a flat file format that’s common in the insurance industry. There are also near-term plans for LDEx to support REST APIs, which would allow for faster processing and better, automated error checking.
LIMRA is working on additional standards to support electronic communication of benefit plan designs and quotes.
What must carriers do to use LDEx?
The standards can be downloaded for free from LIMRA. Carriers must modify their existing enrollment systems to accept data in the new formats—or they can use separate data transformation software to convert each LDEx file they receive into the format their system uses.
How can carriers ease the burden of adopting LDEx?
Although LDEx will ultimately save time and money for carriers, adopting the standards can add development expenses for carriers already spreading limited technology resources across many priorities. Some carriers, however, are finding ways to adopt LDEx without devoting resources to development.
Ideon’s middleware solution enables carriers to accept LDEx files from numerous BenAdmins, with minimal development effort and capital costs, and no need to modify their current system and format. It’s not just a quick fix—it’s a long-term strategic move to enhance your connectivity with BenAdmins and set yourself up for scalability and adaptability in the future. Ideon radically reduces the time and effort needed to set up and administer group benefits, while delivering faster and more accurate information for employers and members. Reach out to us for more information.