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The Future of Technology in Small Group Health Insurance By KIRK WHELAN


he individual health insurance marketplace has long benefited from efficient online sales and enrollment tools. And the majority of consumers and agents in the individual market have readily adopted these tools. Web-based, anonymous quoting and agent-affiliated web portals have become commonplace, making the online purchasing experience the norm for both agents and consumers alike. The individual health insurance market has not been the only business segment to take advantage of developing online technologies. During the past decade we have seen many industries, such as banking, retail and even education, harness the power of Internet-based software and mobile technologies, moving away from brick and mortar and paper-based systems. However, in small group health insurance, the process of enrolling, managing, and renewing clients appears to be stuck in the early 2000s. The lack of adoption of an automated, online purchasing and enrollment experience is due to many factors, but the major hurdles lie in the unsuccessful attempts to establish uniform data interchange formats and the comfortability at which agents and employers are able to utilize ancient business practices as a work around. Whether or not the industry is ready, change is happening now in the small group market. Benefit plans have become more standardized, and many companies have joined the technology race to establish fully integrated and easy-to-use sales and enrollment platforms. If successfully implemented, all parties are expected to reap the benefits of streamlined administrative processes, including a reduction in the number of required connections, 44 | CALIFORNIA BROKER

increased security, and improved margins. And, by the nature of its business, few other organizations are as well-positioned to effectively lead this charge as the exchange marketplace. STANDARDIZING THE TRANSFER OF DATA Much of the small group health insurance industry is burdened by archaic file-sharing practices. Although we saw numerous technology startups emerge in recent years with the goal of tackling these obstacles, operational systems used industrywide remain largely outdated and lacking in efficiency. How difficult can it be to get on the same page? While we may all desire improved speed and reduced administrative burdens, many in the small group benefits industry continue to play the game with their cards close to their chest. David Reid, chief executive of EaseCentral, a human resources and benefits software company, says: “Although many carriers still have - -

cumbersome, antiquated solutions for enrollment and change management, the carriers that have adopted a solution often require use of their own proprietary system – requiring an employer to change from completing five different forms to having five different websites.” Despite many of our best efforts, steps taken to advance the process tend to create more work, distancing us further from streamlined interactivity. At the exchange level, technical companion guides are used that outline industry standards to help combat these nuances. However, Covered California for Small Business, for example, must still tailor file formats case-by-case to accommodate subtle differences in requirements among carriers. This not only requires an increase in administrative responsibilities, but sharp managerial oversight and employee training, which all contribute to an increased cost of doing business. “The opportunity to eliminate manual data entry and paper applications FEBRUARY 2017

California Broker February 2017  
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