Jun 29, 2023

HR Gazette: How APIs are Transforming Employee Benefits Enrollment

Why are APIs better for benefits enrollment? Noyo's Director of Customer Solutions, Eddie Choi, breaks it down for HR pros.

This piece originally appeared in HR Gazette.

HR professionals generally have an idea of the pros and cons of their own software systems; the functions they can and cannot perform, how well the systems are able to do some tasks, and how poorly they perform others.

What’s less understood by users are the ins and outs of technology’s limitations – the why behind their inability to perform better. Even the least tech-savvy administrator is aware that HR software, particularly for benefits enrollment, trails behind that used in other business functions, even in the departments serviced by HR, such as Sales, Marketing and Logistics.

The good news for HR administrators is that benefits enrollment tech is catching up, thanks to the introduction of more modern capabilities enabled by the switch from paper, PDFs, and EDI to APIs for data transfer and management.

How APIs compare to EDIs

By way of a digital handshake, an API, or application programming interface, allows one system to communicate with another much the way we all communicate today. This allows for two categories of communication: forwarding a request and checking for information. APIs are safe, proven and secure and are used in everyday applications like smartphones, online shopping, and order tracking.

Electronic data interchange (EDI) is an older technology used to exchange business information between two organizations. It comes in different forms, but it’s essentially extracting information in one system to share with another. Common uses in HR are batching up payroll changes for payroll runs.

For the sake of comparison, EDI is like dropping off mail to have it delivered once a week. API happens in real time with capabilities for tracking and confirmation of delivery. More and more, systems are being connected with seamless integrations using the power of APIs. This is great news for HR teams as the industry embarks on the journey of upgrading digital connectivity.

Also, APIs provide the pipes to power innovative products, solutions, processes and approaches in benefits development and delivery for HR departments.

Why APIs are better for benefits enrollment

While some benefits enrollment processes still use portals, PDFs and paper forms, most programs rely on EDI to deliver information.

But this is starting to change. Just as EDI has largely replaced paper and PDF, API is supplanting EDI. Modern HR software platforms use API-enabled software because it’s faster, more flexible and provides a frictionless experience for all system users: HR teams, employee/members, insurance carriers and brokers.

Benefits programs are no longer once-a-year engagements. It’s not just connecting benefit platforms to HR and payroll. Platforms are using integrated software to support a digital experience for benefits like mental health, tuition assistance, telehealth, and financial programs.

The same digital revolution that has transformed consumer experiences in so many areas is coming to the world of insurance benefits. Consumers expect greater access to their information, to enroll with a minimum of effort, make life-change updates, and to have a seamless, connected experience from end-to-end. Also, benefits are more frequently being joined with other HR services, such as payroll and employee performance tools. EDI is no longer up to the task, but API tech makes this all-in-one solution possible.

According to Guardian’s 12th Annual Workplace Benefits Study, employers with API integrations supporting plan member data rank their employee experience higher and with less administrative burden compared to those still using a paper-based system.

Those employers see immediate and significant gains in efficiency, saving hundreds of hours in manual administration each year. Among the efficiencies:

  • Plan set-up can be reduced from an average of 46 hours over 6-12 weeks to just 10 minutes.

  • Exchanging member data goes from 5 hours over 1-2 weeks to less than 1 minute.

  • Completion and tracking of evidence of insurability is cut from 7 hours over 1-4 weeks to less than 1 minute.

Those results are stunning and it’s no wonder since the stats compare API-enabled digital transformation to paper-based systems. It’s important to note that many HR teams and their benefits administration partners continue to use legacy technology such as paper forms, PDFs, and manual data entry, as well as EDI.

Those that make the necessary investments in APIs to provide these services and experiences will reap the benefits and thrive, while those that delay will be left behind. Carriers and benefit administration companies can build their own API-powered benefits enrollment software, but many buy because it’s easier on their IT department and engineering teams and the plug-and-play nature of APIs makes it easy to integrate into existing systems.

Making APIs simple and effective 

Robust technology partners like Noyo now make it possible for carriers and benefits software platforms to use a suite of APIs to simplify benefits administration, from installation to enrollment to renewal. This means tech-enabled experiences for HR professionals and brokers alike, like hands-free automation, greater accuracy, and the ability to track member changes every step of the way as they travel between ben-admins and carriers.

Benefits enrollment no longer needs to be difficult for HR teams, members, and carriers. API technology removes most of the potential for human error by automating processes and making it possible for critical insurance and benefits data to flow seamlessly between connected systems.

What is your benefits administration partner using? 

APIs are here. To learn more about how this technology can help streamline benefits enrollment, explore the latest Noyo Open Enrollment Report.

If you do benefits, you need Noyo

The future of employee benefits is faster, easier, and more automated. Are you ready?