Claims integration helps ensure employees take advantage of their voluntary benefits coverage when a triggering event occurs, but there are a few roadblocks in the way of full integration at more firms.
- Claims integration allows carriers and companies to automatically cross-reference patient information to see if they qualify to file a voluntary benefits claim based on their medical events
- 67% of employers are seeking carriers that support claims integration
- There are low claim ratios associated with voluntary benefits because employees have to understand and initiate claims themselves
- Challenges for claims integration include privacy laws and lack of incentives for carriers to increase claims ratios
The voluntary benefits market often sees very low claim ratios, meaning employees just aren’t filing claims for their coverage when they experience a triggering event. This could happen for a number of reasons, but namely because workers have to be proactive about initiating a claim, unlike with their traditional medical insurance benefits.
Claims integration is one approach that can help increase voluntary benefits utilization. Even though employees would benefit from the concept and take advantage of their coverage, other factors get in the way of full integration.
In voluntary benefits, claims integration is when certain information can be accessed and cross-referenced to help notify employees when they’re eligible to make a claim. For example, a carrier could theoretically see what normal medical coverage claims an employee used for the month and alert them to file a voluntary benefits claim around a qualifying accident or critical illness that the employee may not have realized was covered.
According to a report from Eastbridge Consulting Group, 67% of employers are looking for carriers that support claims integration. And, the Eastbridge 2021 Claims Practices of Voluntary Carriers Spotlight Report found that 70% of carriers offer claims integrations of some kind, up from 38% in 2020.
So, why is claims integration becoming more of a priority? Because it helps ensure that employees are taking advantage of the benefits they’re paying for. The ideal scenario for those in support of full claims integration would be for a claim to be automatically adjudicated when a triggering event is identified. However, most integrated systems today will only notify an employee that they should file a claim to receive voluntary benefits coverage for a qualifying event.
Why is claims integration needed in the first place? Think of filing a voluntary benefits claim like claiming a retail rebate. A company offers a rebate that is fully available to you, as long as you take the extra steps to mail in the rebate and receive the money back. Because voluntary benefits claims aren’t automatically triggered or auto-adjudicated when, say, an employee is in an accident or gets a critical illness diagnosis, claims rates are low just like mail-in rebate redemptions are low.
In core medical plans, when someone goes to the doctor’s office, everything is automatically set in motion and most claims are made automatically. In voluntary benefits coverage, consumers have to take the initiative to receive the benefit they’re eligible for. Consumers must do the work to know what events qualify and what will trigger coverage. They have to take that extra step to use the coverage they have, and many people struggle to do all of this on their own.
Because claims integration technology relies on analyzing health data, it’s a challenge to ensure that all sensitive patient health information is fully protected and that privacy laws like HIPAA are being followed. Employees must opt-in and grant permission for their medical carrier to share information about them with their voluntary benefits carrier to receive an automated notification about filing a claim. It’s a much more targeted, specific approach to help employees get the most value out of their coverage, but data privacy is a concern.
Another big challenge is that many carriers don’t have much incentive to encourage more claims to be made, since low claim ratios mean higher profit margins for them. They may say in theory that they want more employees to take advantage of the coverage they’re paying for, but if they’re successful in increasing claim rates, they’re lowering their profit margin. They’re just not incentivized to send out reminders or incorporate automated integrations.
Some carriers and employers have tried to help employees remember to file a claim when they’re eligible for coverage. They may send out regular reminders or ask people at the end of the year to look back through their medical incidents and see if they can file an accident claim. Sometimes a little communication can go a long way.
BeneRe endorses claims integration so employees can get the most value out of their voluntary benefits coverage. Why? The BeneRe model ensures that all the underwriting gains go back for reinvestment in employee benefits programs, so we’re not concerned with traditional profit margins related to low claims rates. We have zero motivation to see a low claims experience.
We also know that the employers that join our pool have a true fiduciary mindset and want maximum value driven to their employees. Employers that participate in our group captive solution seek total transparency of the financial performance of the program and reinvest 100% of the dividends into their employee benefits offerings.
Reach out to BeneRe today for a deeper discussion and a complimentary financial analysis.