Put as simply as possible, an Electronic Data Interchange (EDI) 834 file is the standard format in which employers can communicate their employees’ health insurance enrollment and maintenance data to insurance carriers.
A brief history: The Health Insurance Portability and Accountability Act of 1996 (HIPAA), specifically title II, required these standard formats be set for a variety of transactions and code sets. And the 834 file format was specifically created for EDI benefit enrollment and maintenance, while there are others such as the 276 for claim status requests, the 270 for health care eligibility/benefit inquiries, the list goes on…
Overview: Most companies create these files and deliver them automatically as part of a carrier connection solution. You’ll typically find these capabilities with benefits management and enrollment solutions, HR platforms, some payroll platforms, etc.
834 the “standard” format: With all health insurance carriers having to accept the 834 format, you would think delivering health insurance enrollment and maintenance data would be easy, right? Not so much. And although the format itself is standard meaning all record types and properties are classified in the same way, the information contained within the properties can differ from carrier to carrier. Meaning, if you have one file configured for UnitedHealth, that same file can’t be sent to Aetna, Humana, or really any other carrier (even if in some strange world they all provided the exact same plan).
Furthermore, once you expand beyond conveying more than just health insurance data to a carrier, to include something like dental plan data, carriers will typically require a different format.
Benefit plans utilizing the 834 format: There are a number of different benefit plans and insurance types communicated through EDI this includes dental, vision, medical, short-term disability, and long-term disability. However, as mentioned above, it’s typical that carriers will require different information or a modified version of the 834 file format for these types of insurance. The 834 is required to be accepted by law for health plan information, but carriers are not required to accept this for other types of plans.
The pros: The alternative to an EDI transfer of the 834 file format is typically faxing paper enrollment forms to the carrier or manually inputting enrollment data into the carrier’s website. Once a connection is established, there is a significant level of automation that occurs. This method of getting enrollment data to the carriers is more accurate than paper because it eliminates the misinterpretation of handwriting and manual data entry that carriers will have to do on their end.
The cons: If you’ve ever seen one of these completed 834 files, chances are, you can’t actually interpret this data or read the file very well. Carriers typically only accept EDI feeds with this file for companies with 100 employees or more, which traditionally leaves small businesses stuck with the paper forms. Although configuration of this file can be quick, but going back and forth with the carrier can typically take 8-12 weeks before a connection is established.
Automating Carrier Connections. In order to help companies gain direct access to carriers and eliminate
the cons associated with EDI, EverythingBenefits launched CarrierConnectivity, a solution that automatically delivers benefits data directly to insurance carriers. Carrier Connectivity ensures data and any relevant updates get to insurance carriers quickly, accurately and without manual or redundant processes. Employee enrollment data is securely communicated from clients’ solution to insurance carriers using digitized enrollment forms or EDI. Types of Connectivity Provided:
- Insurance: The data is securely and automatically communicated to insurance carriers for health, dental, life, short-term disability, long-term disability and other supplemental insurance.
- 401K: The necessary data and ongoing contributions are securely delivered to 401(k) providers.
- Savings Accounts: Administrators and banks receive enrollment and contribution data for HSA’s,
FSA’s, HRA’s, PRA’s.
At present, EverythingBenefits works with over 600 carriers across the country to communicate health, voluntary, and financial benefits data. To learn more, download our Carrier Connectivity solution guide, and Case Study to see how our clients benefited by implementing Carrier Connectivity.