HITRUST, the standard-setters in data security, now vouches for Ideon

By Michael W.  Levin, co-founder and CEO of Ideon

At Ideon, our work is predicated on a straightforward belief: Choosing, buying, and managing health insurance and employee benefits should be no more complex than any other digital experience. And in creating the infrastructure that powers digital connectivity between carriers and technology platforms, we’ve been humbled to materially help improve the benefits experiences for countless Americans.

But even as we engineer and maintain the industry-best infrastructure that allows for free-flowing data, we are continuously ensuring that those “pipes” are not only unobstructed, but also airtight. To put it another way: We are obsessed with data security. Our APIs are the conduits for streams of personally identifiable information (PII) and protected health information (PHI)—and ensuring the safe passage of every last datum is a staggering responsibility we don’t take lightly. 

Nor have we ever. From its beginnings, Ideon prioritized transparency and security, working diligently to protect the sensitive member information that carriers, InsurTechs, BenAdmin platforms, and others send through Ideon’s platform.

Because cybersecurity threats are always mutating, data protection is a journey more than a destination. Last year, I reported that Ideon had met an important milestone of that journey when our data security protocols were validated by System and Organization Controls 2 Type II (SOC 2), an examination performed by a public accounting firm with expertise in information security audits. 

This year, I’m deeply proud to announce that Ideon’s Enrollment & Member Management API has earned certified status for information security from HITRUST. As detailed in a recent press release, this credential affirms that Ideon has addressed security risks through an exhaustive set of highly prescriptive controls. 

This step was necessary because unlike most other regulatory standards, HIPAA legislation provides no prescriptive white paper or rules for adherence. HITRUST was created by industry players looking to define standards around health information security. Its unparalleled rigor and scope makes HITRUST the gold standard for PHI treatment and storage.

Achieving the HITRUST certification was an arduous process. After conducting a gap analysis against nearly 300 controls, we began implementing the changes necessary for HITRUST compliance. It’s hard to overstate how monumental that effort was: We took measures to ensure that every Ideon action is logged and reproducible on demand. We instituted company-wide protocols governing mobile device use. We refined role-based accesses, installed cameras, updated policies and procedures, retrained staff, and prepared mounds of evidence.

And that description only scratches the surface. (For a technical dive into Ideon’s HITRUST certification, read this blog)

The process touched everyone at Ideon, consuming significant amounts of most employees’ time last year. An IT team was substantially dedicated to this effort for the past year, led by the remarkably talented Tim Hochman, our VP of information security and IT. Tim had previously taken another healthcare organization through the HITRUST initiation process, and he’s intimately familiar with its proceedings. (And, happily for us, he’s exceptionally organized—a must for a project so labyrinthine and minutely detailed!)

All told, it was a costly undertaking for the company, and at times even a challenging and uncomfortable one.

And yet: Aligning Ideon’s operations with HITRUST’s standards was as worthwhile as it was ambitious. In earning this designation, we signal to the industry that we understand the importance of handling sensitive information with the utmost gravity. We expect that this will usher in important new customers and partnerships.

But aside from the benefits that will no doubt accrue to Ideon, we’re excited about our HITRUST certification because it represents movement in a crucial direction for our industry. As migration toward APIs and data sharing intensifies, the need for increasingly tough security heightens across the space. 

Ideon has long been a pacesetter for innovation, vision, execution—and security. We’re eager to support the industry as it seeks to match progress with protection. If you have questions or want more information about Ideon’s security policies, please reach out to my team.

API connectivity and the bentech ecosystem: A Q&A with Sun Life’s Ted Phillips

By Zach Wallens, Director of Content and Communications, Ideon

The HR and benefits technology (bentech) ecosystem has exploded in recent years, with billions in venture capital investment driving innovation and new players in the space.

That’s left insurance carriers with a strategic and technology challenge: how do we partner and connect with dozens of bentechs, ensuring brokers and members have a great experience across the platforms they use today?

Ted Phillips, Sun Life’s AVP, Distribution Digital Center of Excellence, tackles these challenges every day. Ideon spoke with Ted about Sun Life’s tech partnership strategy, the value of “enhanced” API connectivity, and their new partnership with Ideon.

 The below interview has been condensed and edited for clarity.

 

IDEON: What’s your role at Sun Life?

TED PHILLIPS: I lead a team that’s responsible for the strategy and execution of our benefits technology (bentech) platform partnerships. We’re looking to create new partnerships, bring them to market, and grow premium through these relationships. Through Sun Life Link, we work with our accelerator team on building out API connectivity, and our data operations team, which takes the connectivity we build and operationalizes it.

Our ultimate objective is to make benefits easier to manage — to remove headaches that are often felt in managing ancillary products. We want to streamline benefits administration, billing, and everything in between.

 

How has your partnership strategy evolved recently?

We’ve transformed our partnership strategy for three reasons: First, there’s an expectation now—among members, brokers, and employers—that technology works seamlessly. It’s incumbent upon Sun Life to make sure the benefits experience is great for everyone and that we meet their expectations.

Second, technology has advanced quite dramatically over the past 2-3 years. APIs and enhanced connectivity are the hot topics of today. Most of the bentech ecosystem are working toward some level of enhanced API connectivity.

Third, the bentech ecosystem is far more complex and nuanced than a few years ago. Before, there were benefits administration platforms (BenAdmins), but now there are many more layers and segments within our ecosystem: HCM, proposal tools, quote-to-enroll, broker tech, resellers, and more.

 

What does that complexity mean for your team?

In 2019, the global investment in HR tech was $5B. In 2020, it was $17B. What that creates is a whole host of companies that are extremely valuable, like Ideon, and others that are just getting their idea off the ground. For us, the challenge is making the right decisions on which bentech platforms to partner with.

We’re always evaluating two things: which segments of the ecosystem do we want to work with, and how can we connect with them? Sun Life can’t take in every connection request we receive from bentech platforms. Middleware like Ideon allows us to multiply our team’s impact by increasing the number of platforms we can connect to.

 

Sun Life recently partnered with Ideon to enhance your data exchange capabilities with bentech platforms. How does better connectivity affect your clients?

It’s all about making benefits easier. APIs and enhanced connectivity enable us to streamline eligibility, benefits administration, enrollment, etc., and that saves hundreds of hours for our brokers and clients.

We find that when employer groups are on platforms, especially those with which we have enhanced connections, they have access to more Sun Life products and better benefits education experiences.  Also, with better connectivity, the enrollment and administration process is faster and more accurate, leading to fewer claims and billing issues.

 

Let’s talk more about that. How do APIs improve data accuracy?

Technology, including APIs and enhanced connectivity, allows us to identify errors and correct them before they become significant client issues.

It starts with making sure benefits products are set up correctly on platforms. We then use APIs to ensure enrollment eligibility is completed quickly and accurately, to make sure benefits are available when they’re needed.

As enhanced connectivity becomes commonplace, there will be tremendous value in having more accurate data connections. It’s not just about speed — accuracy is just as important.

 

Does this help Sun Life’s operational team, too?

Absolutely, there’s a big impact on carriers. The Ideon system creates better data accuracy — which may equate to fewer support calls, fewer billing issues, and fewer claim issues. That can have a huge effect on the industry: we’ll all be much better off if we aren’t using paper and email to solve and reconcile these data errors. With better connectivity, they might not be issues at all.

 

We’ve talked a lot about carrier-bentech partnerships. How else is the industry working together?

There’s beginning to be a collaborative mentality in the benefits industry. Data accuracy and data exchange are industry-wide challenges, and neither will be solved by one carrier alone.

LIMRA is a great example of industry participants and even competitors working together to solve these challenges. There’s a mentality amongst a group of individuals that we need to fix this as an industry. If we do, everyone will be better for it.

 

Final question: Besides API connectivity, in what other areas is Sun Life investing in technology?

Sun Life is, first and foremost, an insurance company. But we have developed proprietary technology that provides a modern client experience. Sun Life Onboard, for example, is a digitally enhanced onboarding experience. Our Benefits Explorer tool helps educate members on benefits pre-enrollment and throughout the client lifecycle.

But it’s a balance. We also need to be where our clients are. As we’ve talked about, Sun Life has invested significantly in API-powered partnerships with bentechs in the market. Ideon is a big part of that.

We don’t think of these as separate buckets — in-house vs. external investment. We look at it holistically and invest accordingly. Ultimately, we want to make benefits easier to enroll, manage, and administer, on platforms and throughout the benefits ecosystem. We do it by developing technology and through partnerships with companies like Ideon.

 

Interested in learning more about Ideon? Check out our API middleware solution, connect with our sales team, or subscribe to our newsletter.

The health insurance and benefits industry has a data problem

In today’s world, data quality drives results—for good or bad. And for all the progress that’s been achieved harnessing data in the health insurance and benefits ecosystem, data problems are rampant.

We speak to you from the trenches, which is to say that Ideon is in the business of not only data connectivity, but also data accuracy. And in our experience, about 10% of employee enrollments have existing data problems—from incorrect social security numbers to inaccurate effective dates—that can and often does cause significant issues for members, employers, and carriers.

The fallout of poor data throughout the ecosystem includes: 

  • Members are arriving in doctors’ waiting rooms, only to be told their coverage is not in place. Scenarios like these are all too common. And while these problems are solvable retroactively, they cause undue frustration and time-wasting for members.
  • Employers are paying for coverage for employees who have long ago jumped ship, when termination is not done properly. And new employees may resent their employer when their benefits experience is rife with coverage issues.
  • Brokers and consultants are often responsible for ensuring coverage is intact. They also may be the ones charged with entering enrollment data into a broker portal or enrollment platform. So when there’s a data issue, they often bear the brunt of the blame. Aside from fielding calls from irate HR managers, brokers often take home lower commissions when enrollments are incomplete owing to data issues.
  • Carriers have been forced to set up costly systems and processes—such as large customer service operations—to deal with the consequences of poor data quality. Bad data can also mean significant premium leakage. And importantly, while many look to insurers to solve all data problems, it’s impossible for them to do so without the help of all the other entities involved.

Bottom line: The industry’s “dirty data” problem is pervasive, with detrimental ripple effects at scale. Consider: In our estimation, nearly 9 million employees in the U.S. could have a coverage issue.

What’s being done? Not enough. Many constituencies in the industry see data issues as unavoidable and insurmountable, resigning themselves to addressing the symptoms, not the disease.

We get it: These issues are daunting. They’ve been institutionalized to a startling degree. But with industry-wide collaboration, they’re also eminently solvable.

At Ideon, we have some thoughts on how this can be done. You can learn more about them here.

Bad employee benefit data has been institutionalized. We believe that’s a solvable problem.

Up to 9 million employees may have a coverage issue

By Michael W. Levin, Ideon co-founder and CEO

Over the past two years, as we have scaled our enrollment and member-management solution, we’ve been surprised less by the data problems we have seen than by the resignation among various constituencies that such problems are inevitable and unsolvable. As an industry, we’ve institutionalized issues that undermine the protection of covered members, not to mention the great experiences that we’ve become accustomed to in other industries.

The data problems we see include incorrect identifiers (e.g. Social Security numbers), birth dates, effective dates, classes, divisions, addresses, phone numbers and more. Some of these are less critical than others, but many create coverage issues. 

How broad are these issues? Overall, we see existing problems with approximately 10% of subscribers we migrate on to the Ideon middleware platform. Importantly, we regularly see coverage issues with 8% of the lives we migrate onto the Ideon platform. The members in this 8% are either missing coverage for which they enrolled, or are still enrolled when they should have been “termed.”  Fifty-six percent of all groups we migrate on to Ideon have pre-existing, critical (coverage) errors. And substantially all large groups have such errors.

To put this into perspective: 110 million employees in the U.S. have employer sponsored health insurance and employee benefits. So if our experience holds true to the broader base, almost 9 million employees could have a coverage issue. Are we surprised? Doesn’t matter. What’s more important is that we pull on this thread to see the impacts across our ecosystem.

Let’s start with the employee, or member. Stories of arriving at the doctor only to find the coverage for yourself, or your child, is not in place are rampant. Although bad enough, this can be solved (albeit retroactively). But what about someone who dies and wasn’t properly enrolled in life insurance? Imagine the impact on the family. These are not trivial issues.

So now let’s look to the employer. Both sides of the coverage coin adversely affect the employer. If an employee is not properly terminated, the employer will continue to pay for their  coverage. Worse are instances when an employee is not covered and should be. Nothing undermines employee benefits goodwill like coverage issues. Imagine a new employee whose spouse visits the doctor with a sick child only to discover the child is not covered. 

Brokers and consultants are likewise not immune from the impact of coverage issues. Their responsibility often extends to open enrollment and making sure coverage is correct. This is exacerbated when they are the ones actually responsible for entering enrollment data into a broker portal or enrollment platform. The broker/consultant is often the first call from an angry HR manager. At the same time, incomplete enrollments may mean lower commissions. In a recent migration of one BenAdmin we found data issues preventing coverage that aggregated  more than $1 million in premium. While certainly not all with one broker, commissions on this business were absent because of these data issues.

Which brings us to the carrier. Many put the onus on insurers to fix all issues, but they simply cannot do so without the help and cooperation of all the above entities. Unfortunately, and in the absence of solving the problem, carriers have been forced to allocate substantial resources, and develop systems and processes (think member operations and customer support), to deal with the symptoms of these issues: the unhappy member, employer and/or brokers. And as noted above, the premium leakage affecting the carriers can be substantial.

The frustrating aspect of all of this is that these problems are solvable—but it takes a village.

A role for every stakeholder

Fixing our industry’s data problems will require contribution from many stakeholders. No single party can solve these issues alone. The good news is that the benefits of resolving these issues accrue to all. 

Carriers: The most important step toward resolving these issues and keeping the data clean over time is for carriers to expose group structures and censuses through some kind of repeatable digital process. With this data, the same data from the employer, through their BenAdmin, can be compared and differences surfaced. Today, very few carriers make it easy to access these data on a regular basis. This is one reason we at Ideon have written that the most important API a carrier should develop is a census API.

Middleware: The role of middleware encompasses far more than connecting carriers, BenAdmins, and other industry participants. Middleware, such as Ideon, also plays a key role in cleaning up data discrepancies and keeping employee benefit data accurate. Middleware’s role is to 1) identify discrepancies between the various parties; and 2) normalize, structure, and deliver those errors to the appropriate party to adjudicate. While the first role is obvious, the second is less so. The reality today is that each carrier describes, and delivers, the same error differently. Some may use plain language “the social security number is invalid” while others may use a code to describe that error. Many of these errors are sent by email, while some carriers send these errors in files, and a very few through APIs.

Middleware’s role of normalizing and structuring this data is critical to delivering great experiences for all of the parties who ultimately need to fix the errors. If brokers, employers and members need to parse through emails and files for errors from different carriers and/or interpret what the error is, we will never create an environment conducive to fixing these problems and keeping them fixed.

The industry-changing potential of middleware was evident in one recent migration of about 200,000 employees onto the Ideon platform, all enrolled with a large national carrier. During that migration, our technology identified errors impacting more than 16% of the employees, resulting in nearly $1 million in lost premium for the carrier—and, we expect, lost broker commissions.

In summary: we found $1 million in additional premium for the carrier, and we saved more than 30K employees from potential coverage issues. All from one migration of approximately 200,000 employees. Projected across the industry, we can safely assume carriers are leaving tens, if not hundreds of millions of dollars on the table.

BenAdmins: BenAdmins play a critical role in creating a path for these errors to be addressed. While we, as middleware, can surface these problems, we cannot adjudicate many of them. As such, BenAdmins need to build into their solutions a means of directing each error to the appropriate party. A demographic error can be sent directly to the employee. But class, division and other such errors need to be addressed by the employer. Still other information may need the broker or consultant to weigh in. 

Ideon triages, classifies, and structures these errors allowing for easy and repeatable direction of errors to the responsible party.

Brokers: For some employers, especially smaller companies who may not be using a benefit administration system, the responsibility for fixing the errors falls on the broker. Once surfaced, brokers have a responsibility to fix the data discrepancies. At first this can be daunting when confronted with the sheer number of problems that need to be addressed. This is especially true as we all set on a path to clean up pre-existing problems. Fixing Social Security numbers, birth dates, effective dates and the like is self-evident.  But some may be inclined to dismiss errors in addresses, or such demographic data. But ultimately a great member experience relies on these data being right. Whether it is for receipt of plan materials, or a claim check, this often-ignored data is critical.

The good news is that once the heavy lift of cleaning-up existing problems is complete, very little ongoing work by the broker should be required to keep the data clean.

Employers: Employers too have a role to play. It is incumbent upon the employer to make sure enrollment and effective dates are corrected and to address any inconsistencies around an employee’s classification including assignments to certain divisions, departments etc.

The first step: A shift in mindset

If the above framework feels daunting — I get it. Fixing a deeply embedded, decades-long problem is always challenging, made more difficult in a complex industry with numerous stakeholders and competing priorities. But we must start somewhere.

As a starting point, I hope to see the industry to coalesce around—and be inspired by—these three convictions:

1) It’s a problem worth fixing.
2) It’s solvable.
3) It requires industry-wide collaboration.

If we as an industry can shift our mindset and unite behind these three beliefs, we’ll be on our way to eliminating inaccurate benefit data—and its harmful impact.

Sun Life and Ideon Partner to Make Benefits Enrollment Faster and Easier for Employers, Employees and Brokers

Ideon’s API powers rapid, accurate data exchange between Sun Life and benefits administration platforms

July 27, 2022  — Ideon, the API platform powering digital experiences in health insurance and benefits, today announced that it has partnered with Sun Life to enable a seamless digital enrollment and administration experience for the group benefit provider’s ancillary offerings.

Sun Life, a leading provider of life, disability, absence management, supplemental health, and dental insurance, will use Ideon’s APIs to connect and exchange data with the growing ecosystem of HR and benefits platforms. This creates a more accurate, engaging, and automated benefits enrollment and administration experience for brokers, employers, and Sun Life members across the country.

“This partnership will enhance Sun Life’s data exchange capabilities with benefits administration platforms, making it easier for employees to enroll in and for employers to manage their Sun Life portfolio of benefits – while also improving the broker experience,” said David Healy, Senior Vice President of Group Benefits at Sun Life. “We are thrilled to work with Ideon to enhance our digital connectivity as we continue to innovate new solutions for employers.”

Amid a competitive job market, employers are expanding the scope and variety of their benefit offerings to attract and retain talent. Research by LIMRA shows that 66 percent of employers believe their employees will expect more ancillary and non-medical benefits options in the future. As the number of benefits employers offer increases, so does the administrative workload on HR teams.

Thanks to the connectivity powered by Ideon, previously manual benefits administration tasks for Sun Life’s employer clients and members are now automated. By spending less time and effort administering the growing number of benefits they offer employees, HR teams have more time to focus on other initiatives for their organizations.

“By selecting Ideon’s APIs, Sun Life is signaling its commitment to continued digital innovation that greatly benefits members, employers and brokers,” said Michael W. Levin, co-founder and CEO of Ideon. “As the adoption of voluntary benefits grows, Ideon is a valuable partner to Sun Life and other carriers, making it easier for them to capitalize on this opportunity and empowering them to deliver the best benefit experiences to their clients.”

About Ideon

Ideon is the way health insurance carriers and employee benefits providers connect with technology partners to deliver seamless consumer experiences at every stage of the member journey. Ideon is not the websites or apps one uses to choose a plan or find a doctor. It is the infrastructure, the ‘pipes,’ that simplify the complex exchange of quoting, enrollment, and eligibility data between carriers and the technology partners so that they can, in turn, deliver health and employee benefits to hundreds of millions of Americans everyday. Ideon’s APIs transmit billions of data points between InsurTechs and insurance carriers, powering an amazing benefits experience for all. Faster. Better. Awesomely. To learn more, please visit: www.ideonapi.com.

About Sun Life

Sun Life is a leading international financial services organization providing asset management, wealth, insurance and health solutions to individual and institutional clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of March 31, 2022, Sun Life had total assets under management of C$1.35 trillion. For more information, please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

In the United States, Sun Life is one of the largest group benefits providers, serving more than 55,000 employers in small, medium and large workplaces across the country. Sun Life’s broad portfolio of insurance products and services in the U.S. includes disability, absence management, life, dental, vision, voluntary and medical stop-loss. Sun Life and its affiliates in asset management businesses in the U.S. employ approximately 8,000 people. Group insurance policies are issued by Sun Life Assurance Company of Canada (Wellesley Hills, Mass.), except in New York, where policies are issued by Sun Life and Health Insurance Company (U.S.) (Lansing, Mich.). For more information, please visit www.sunlife.com/us.

Bridging the Carrier-Benefits Platform Divide with APIs

Leading carriers and BenTechs are finally speaking the same language

 

Why is there never a time machine when you need one?

Companies that provide HR, payroll, and benefits software certainly could use a quick way to shuttle between generations. Their customers—employers and their employees—expect the speed and data-rich experiences of the latest smartphone apps. Meanwhile, most health insurance and benefits carriers remain in the early stages of transforming their systems for the modern era, with some still relying on decades-old technology.

So it’s no surprise that communication in this ecosystem is strained, with more than a few misunderstandings and awkward silences. Communicating enrollment and employee data, in particular, is a longstanding challenge — and of critical importance.

In the benefits industry, electronic data interchange (EDI) has for years been the most common data exchange technology. But as anyone in this ecosystem can attest, EDI is far from perfect, and it certainly doesn’t deliver the speed, efficiency, and accuracy that today’s consumers expect.

At last, there’s another way. Many forward-thinking carriers and benefits platforms are adopting API-powered middleware to replace, or at least supplement, their EDI connections. Middleware translates and exchanges data between today’s real-time connected systems and the older, EDI-based systems of most insurance companies. The result: two-way, consistent communication; unprecedented scalability and data accuracy; and an enrollment experience that, finally, meets employee expectations.

To understand the challenges faced by benefits platforms as they connect to carriers, and the advantages of APIs, Michael Levin, the CEO of Ideon, recently led a webinar featuring two experts with deep industry experience:

Cory Nicks, Manager of Insurance Operations of Rippling, an HR platform that has grown rapidly in part because of an obsessive devotion to automating processes that others handle manually.

Jeff Oldham, the CEO of Informed Consulting, who has more than 25 years of experience in the employee benefits business.

In a lively and informative discussion, the three discussed the need for carrier connectivity, the insurance industry’s slow effort at modernization, and how middleware enables benefits platforms to offer better service with far less effort. 

What follows are six of the most useful insights from the session.

You can watch the entire webinar here.

1. HR and benefits platforms require connectivity to handle increased volume

Until about five years ago, Oldham explained, platforms focused only on technology to serve brokers, employers, and employees rather than direct electronic connections to carriers. “If you talked to a founder back then, the last thing they thought about was sending a file,” he said. 

As the industry grew, platforms started to bog down with manual work. “There was no sense of automation,” said Nicks, who worked for years at Zenefits, a pioneering benefits technology platform. “We had forms and faxes and carrier portals.” Ultimately, he said, “figuring out how to distribute information to carriers became really difficult.”

By contrast, people building platforms today are using technology that allows for information to be exchanged between systems electronically through application programming interfaces (APIs), the best-practice method of digital communications. That’s how they expect to communicate with carriers and benefits providers as well.

Indeed, when Nicks started at Rippling in 2019, efficiency was a priority from the start. A main focus of ours was getting information to the carrier as efficiently as possible without having huge operational teams typing information into portals and filling out forms.”

2. Carrier connectivity is the only way to deliver the speed and accuracy that both employers and employees demand

The consequences of a mistake in an employee benefits account can be high. Health insurance is one of the largest expenses at many companies. Premiums are deducted from employee paychecks. And, of course, medical care itself is often essential. 

“When you have poor carrier connectivity, the file goes sideways, and yellow flags are thrown on the field,” Oldham said. “When the right information isn’t received, all kinds of problems occur.” 

Consumers, moreover, have come to expect that the websites and apps they use at work will be as powerful as those they use to shop, bank, and communicate.

“Customers want their benefits to work like Amazon, where you buy something and the package comes within two days,” Nicks said. “If you choose your insurance on the benefit system, you want to be able to go to the doctor the next day and not have to pay $3,000 out of pocket when you should only have a $5 copay.”

3. Current electronic connection approaches don’t meet today’s consumer expectations

For several years, benefits platforms have formed digital connections to insurance carriers. But these haven’t used APIs. Rather, most carrier systems could only communicate through EDI: according to a recent Guardian report, about two-thirds of employers say EDI is their primary method of transmitting employee enrollment data to carriers.

These connections, however, create a range of challenges for platforms and their clients, Oldham explained. “EDI is a one-way street. Data is sent once a week, and nothing is returned. So there is a lag, and the information isn’t always correct.”

When benefits platforms connect to carriers through EDI, there’s an 8-12 week setup and testing process—and sometimes longer—for each group. “Each individual carrier has a different process,” said Nicks. “It’s not scalable for us. It’s not scalable for employers. And it’s not scalable for brokers.”

EDI, moreover, isn’t any better than paper forms at preventing and rectifying data errors and discrepancies. With APIs, by contrast, every transaction can be reviewed and validated proactively, without manual intervention. “It creates much cleaner data. It allows processing to go faster. And you don’t have as many support cases coming in,” Nicks said.

EDI’s inefficiencies, the panelists said, also trickle down to employees. For example, insurance cards may be delayed and payroll deduction and billing errors may arise. These critical issues can spoil employees’ overall benefits experience. In fact, a majority of employees say a poor benefits enrollment experience could make them consider looking for another job.

4. Carriers are upgrading their technology (slowly)

Health insurance and group benefits carriers are replacing their EDI connections with APIs, but the change is part of a long-term evolution of legacy technology, Oldham said. “Of the top 20 carriers we speak to,” he explained, “all of them either have an API strategy or they are building the strategy in 2022.”

Providers of ancillary and voluntary benefits—such as dental, vision, life, and hospital indemnity insurance—are generally quicker to adapt to new market demands than medical carriers, Oldham said. He predicted that 60-75% of the ancillary carriers would move to API connections over the next five to seven years. 

Health insurance companies will be slower to change, he predicted, with national carriers and those in large markets adopting APIs before those in less competitive regions. But change is coming to all parts of the ecosystem.

5. Middleware bridges the technology gap between carriers and HR platforms. 

Benefits platforms, then, are caught between employers who want the speed and accuracy of API-powered connectivity now and carriers who will take years to fully replace their EDI connections.

For a growing number of savvy benefits technology providers, the solution is middleware—a service that integrates with the benefits platform through a single modern API, checks for errors, and then translates transactions into the format each carrier prefers, most commonly EDI.

“For a benefits administration company, middleware is real-time, secure, and scalable,” Oldham said. 

Middleware, he adds, is a ubiquitous way for businesses in every industry to simplify their workflows. Nearly every retailer, he explained, sends all their credit card charges to a single payment processor—a middleware provider that routes them to the appropriate card issuer. “Home Depot doesn’t want to create separate files to send MasterCard, Visa, and Amex,” he explained.

6. Using middleware saves time for even the most sophisticated technology teams

Most benefits platforms have built EDI connections to numerous carriers, but this turns out to be a significant drain on resources.

At Zenefits, Nicks recalled, “we were trying to be the middleware because we didn’t want to pay someone else to handle the translation.” Ultimately, this spawned “a gigantic operational function with engineers going back and forth with each carrier,” he said. “That’s not the kind of work engineers want to do, and it’s not a good ROI for a software company.”

At Rippling, Nicks looked for a different way. “We wanted to make sure that everything was automated, and everything was easy. That way our engineers could work on what was exciting to them: building new product functionality,” Nicks said.

Rippling uses Ideon (formerly Vericred) as middleware to connect to health insurance and benefits providers. “Having a middleware partner like Ideon allows our engineers to work on our product,” Nicks says. “I don’t have to build out a gigantic team to focus on each of the carriers.” Now a team of eight people handles all of Rippling’s carrier connections; without middleware, he explained, Rippling would need more than 100.

“Middleware keeps our operating costs low,” Nicks concluded, “And brokers can trust our platform to enroll groups with a multitude of different carriers without our having to build out connections to each of them.”

Want more insights on carrier connectivity trends? You can watch the entire webinar here.

 

Ideon’s API middleware: Powering fast, accurate, scalable data exchange for carriers and benefits platforms

Nobody has more experience helping benefits platforms and insurance carriers modernize their digital connectivity strategy than Ideon. Our API middleware offers speed, operational savings, scalability, format consistency, and reliability to dozens.

For more information, contact sales@ideonapi.com

APIs, decision support, and more: An employee benefits trend report in six quotes

Ideon’s place at the center of the health insurance and employee benefits industry means we have a clear view of the technology trends shaping the entire ecosystem. But we’re hardly the only ones talking about the growing importance of APIs, digital connectivity, and other transformative innovations.

Here are six trends ushering in the digital age of employee benefits, plus what industry leaders are saying about them.

The healthcare industry embraced interoperability. Employee benefits isn’t far behind.

“Interoperability has been a huge buzzword in the healthcare industry in the last few years, and we’re now seeing it in the employee benefits space for the first time. Data is siloed between various systems and the next wave of technological innovation will be focused on connecting these systems. Not only does it eliminate manual tasks and reduce errors, but it can unlock the ability to make better decisions and drive better outcomes for all.” — Ryan Sachtjen, ThreeFlow

 

Employees expect health insurance and benefits experiences to be as easy as online shopping.

“The goal is to make benefits-enrollment and selection changes take place in real time, replacing a traditionally manual, error-prone process with long wait times before coverage takes effect. Smart technology allows real-time data exchange with benefit carrier partners to simplify processes and improve the benefits experience.” — Amanda Pope, ADP

 

Decision support—which is growing in utilization—requires data connectivity and transparency. 

“The reality of decision support today is that the extent to which such tools can help users is greatly dependent on the quality and breadth of information they have to work with.” — Michael Levin, Ideon

 

Voluntary benefits—crucial in the fight for talent—depend on accurate, smooth-flowing data.

“Tailoring and recommending the benefit packages that best meet employee lifestyle needs eliminates the tedious employee task of sifting through voluntary benefit options. A data-driven approach to benefits can yield higher employee participation in benefits programs as well as improved employee tenure and retention.” — Neil Vaswani, Corestream

 

Efficient, API-powered connectivity is a game-changer for carriers.

“Overall, APIs are helping to provide a personalized experience, rather than a one-size-fits-all solution. Looking ahead, carriers can expose APIs to broker partners and insurtech companies, to transact uniquely, improve operating efficiencies, and enhance experiences. The carriers that are able to easily interact with these partners and play within this ecosystem will have an advantage.” — James Ocampo, Wellfleet Workplace

 

API middleware is enabling carriers and BenAdmin platforms to exchange data with remarkable speed, flexibility, accuracy, and scalability.

“Having a middleware partner allows our engineers to work on our product. I don’t have to build out a gigantic team to focus on each of the carriers. Middleware keeps our operating costs low, and brokers can trust our platform to enroll groups with a multitude of different carriers without our having to build out connections to each of them.” — Cory Nicks, Rippling

 

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Why so many organizations still struggle with digital transformation

If your organization is more deliberate than you think ideal when adopting new technology, you can take some cold comfort in the fact that it’s hardly unique. Transitions in general—and especially those that require great investments of time, money or other resources—have been challenging for humans since, well, humans became a thing. 

And that’s very much the case when technology is involved. “All too often, selling digital transformation within large organizations is an uphill battle,” wrote Ideon CEO and co-founder Michael Levin in a recent Forbes article.

The reasons for this are many, a great deal of them explored in behavioral economics. Essentially the study of human judgment and decision making, the field encompasses a deep and growing list of cognitive biases that influence decision making. Among the most powerful are aversion to lossaversion to regret and a preference for the status quo. In short, humans are biased towards keeping things the way they’ve been (because we’ve survived so far) and are often more afraid of feeling bad about an outcome than about the bad outcome itself. That’s as true for CTOs and CFOs today as it was for hunters and gatherers of the past. For good reason, too: For most of human history, time spent on regret (say, for taking the wrong turn in a forest) meant less time to address the resultant problem (say, the bear now chasing you). 

What does all this have to do with digital transformation? More than you’d think. It makes sense that companies dependent on analog processes are hesitant to embrace digital solutions. The status quo has worked, and most significant technological transformation requires significant investment, which presents the potential for significant regret if systems go south. There’s also the misunderstood but pervasive idea that technology equals layoffs, a loss most employees seek to avoid. But one need only consider the current U.S. economy to understand the complexity of this understanding. Even as technological change continues to sweep through industry, the labor market is as tight as it has been in decades.

The health insurance and employee benefits industry is one example of how technology can transform a business even as employment grows. In what was not too long ago a very manual process, consumers today routinely use digital apps and platforms to choose and manage their health insurance and voluntary benefits. These transitions are powered by APIs—including those developed by Ideon—that power data exchange between insurers, employers, brokers, and the growing ranks of insurtech companies. The overwhelming majority of that latter category didn’t even exist a decade ago. (And they’re hiring.) Not surprisingly, a look at the health insurance and employee benefits ecosystem suggests four strategies for propelling digital change:

1. Connecting digital reform to company priorities.
This increases organizational abilities and allows them to efficiently continue working toward their goals while adapting to technological developments. 

2. Maximizing employee engagement.
Employees will instinctively feel more comfortable with the technology being used when they are a part of the decision-making. 

3. Pump priming.
Selling a particular change for a particular organization is rarely as effective as also selling the benefits of technological change, broadly. People have a harder time resisting change when confronted by statistics, research, case studies, and other evidence proving the ROI of digital transformation in their and other industries.

4. Using cognitive biases for good.
The very biases that keep people from making change can be used to spark action if inaction is framed as the more dangerous option. When we choose not to decide we have still made a choice—and that can be a source of regret, too.

Internal evangelists selling and installing digital transformation within their organizations invariably do so through a combination of the above strategies. While rarely a simple task, if done well, it’s almost invariably rewarding.