back to Blog Posts

Lightening up the year-end blackout period for employee benefits

Lightening up the year-end blackout period for employee benefits thumbnail

Vericred ends the hassle of changing current-year plan details during open enrollment.

By Dan Langevin, co-founder and chief technology officer of Vericred

Towards the end of every fall, as 1/1 renewal dates loom, insurance carriers, brokers and members work diligently to ensure that upcoming plan elections go off without a hitch. Meanwhile, life goes on in the current plan year, and life events that affect enrollment need to be addressed. Simultaneously managing the current plan year changes and the upcoming elections is often a tricky ordeal.

The fact is, most carrier systems struggle to manage coverage across plan years—regardless of the carrier’s backend data ingestion system (EDI 834, API or a custom format). When you consider that enrollment elections for the next plan year begin at least a month before the effective date and that changes can continue to be made retroactively for 60 days, cross-plan-year changes can actually be a problem for three months a year.

To this point, the “state of the art” solution has been manual one-off processes. Carriers require specialized, custom formats (different from their regular EDI 834, API requests or flat files) or specially timed delivery of changes for the prior plan year that differs from the regular file delivery day. In practice, most brokers and operations teams at BenAdmin platforms handle these changes manually, by contacting the carrier or by entering the data into the carrier’s portal. This isn’t exactly ideal. Nor is it ideal for the carriers, as their cost-saving automation is bogged down by so many extra manual touches.

This is a major systemic shortcoming. How can we realize full digital connectivity if for 25% of the year we require a separate manual process to handle basic changes?

Eventually, the underlying limitation will be resolved. Carriers will upgrade their internal systems, data models and processes to seamlessly handle cross-plan-year changes. But, as with many things technology-related at large national carriers, the investment required to accomplish that will be large and the timeline long. The market wants a solution today.

Enter Vericred’s Blackout Period Change Management. We have worked diligently with our carrier partners to develop cross-plan-year, change-management processes that eliminate the need for one-off manual changes. The result: the effective elimination of Blackout Periods.

From the BenTech platform or broker’s perspective, data is sent to Vericred’s APIs per standard operating procedure. Our data model has the concept of different plan years baked in. The differences between how transactions are handled with each carrier are entirely transparent. It “just works.”

From the carrier’s perspective, cross-plan-year changes remain less than ideal. Most carriers need to do some level of system acrobatics to process them. That can mean tasks as manual as employees processing a custom Excel doc with every requested change. That said, knowing that they are getting clean data in a consistent format from multiple BenTech platforms gives them back some of the leverage they reap from automation the other nine months of the year. Further, as the carrier upgrades the efficiency of their internal systems (to standard file feeds or, ultimately, to APIs), it will have a partner who understands the idiosyncrasies of cross-plan-year changes and can help to develop a technical integration and business process.

This fall, we piloted our Blackout Period Change Management process with a large customer that covered tens of thousands of lives across hundreds of groups and four carrier partners. The feedback from all sides was extremely positive. That success has made us that much more excited for a broad rollout across all of our carrier and BenTech partners.

Vericred’s mission is to make insurance and employee-benefit data flow freely between member-facing tech platforms and insurance companies. We know that APIs will be a big part of that solution. In the short term, though, we will also provide innovative, tech-enabled business processes that bridge the gap between where we think we should be and the realities of what exists in the ecosystem today.