The buzz around digital transformation and the shift toward an API-first approach is prevalent in today’s Employee Benefits industry. However, after engaging in more than 40 conversations with industry professionals over the last three months, it has become clear that the reality on the ground diverges significantly from the prevailing discourse.

Throughout 2023, I observed a notable increase in the number of companies within the Benefits space using our integration platform. This trend sparked my curiosity and led me to delve deeper into understanding the use case/s behind it and how we could better tailor our services to meet the needs of these clients.

One of’s most popular use cases has always been ingesting, transforming, and standardizing file data. As we examined the specific use cases of our Benefits clients more closely, it became evident that the primary application of our platform was focused on this exact use case. More specifically (as I learned when I got up to speed with some of the industry terminology!), this involved streamlining the process of preparing and standardizing 834 files for transmission of enrollment and eligibility data to carriers - an essential task in the Benefits administration workflow.

Through my interactions with a diverse group of Benefits experts - including Benefits Administrators, Third-Party Administrators (TPAs), Brokers, and Carriers - I gained valuable insights into the current state of the industry, the challenges being faced, and the future outlook as envisioned by those who navigate these complexities on a daily basis. The discussions revealed several common themes and topics which I have shared below. These are my takeaways after just a few months in the space, so I very much welcome your thoughts, feedback, and insights too!

API Adoption Push: Navigating New Frontiers

In my journey to understand the evolving landscape of data sharing in the benefits industry, I came across a particularly insightful episode of the Insurance Nerds podcast featuring Gary Davis from Noyo. This discussion provided a deep dive into the current state of data sharing and highlighted Noyo's initiatives to promote an API-first approach among carriers. 

Additionally, another significant contributor to this API-first approach, Ideon, produced an easy-to-digest visual map contrasting the challenges of traditional EDI-based integration with the more modern API-based strategies. This map effectively illustrates the potential improvements in efficiency and accuracy that an API-first approach can offer.

While the above visual shows two distinct paths with clear differences with one clear winner, it was interesting to hear challenges and war stories from industry experts who had gone down the API-first path. After speaking with our Benefits clients, we realized that they selected to use our integration platform due to a third path that lies in between the two paths in the above visual. This third path is for using an integration platform to automate and streamline the preparation and delivery of 834 EDI files which we’ll discuss further below. 

Challenges of Implementing APIs

Despite the clear advantages, the transition to an API-centric environment is fraught with challenges. A predominant issue is the prevalence of legacy technology systems within many carriers. These outdated systems are often compounded by issues arising from industry consolidation and acquisitions, which result in a patchwork of disparate technology environments across the sector. This complexity makes it exceedingly difficult to implement uniform API strategies effectively.

The financial and logistical burdens of developing and maintaining APIs add another layer of complexity. Establishing APIs—whether developed in-house or through an external platform—requires significant investment in dedicated development teams, infrastructure, and ongoing support. Moreover, the industry faces a talent shortage, making it challenging to find and retain experts who can navigate the intricacies of Benefits data integration.

The Uneven Progress of API Adoption

As a result of these challenges, while the largest carriers have made strides in adopting API strategies, a considerable segment of the market, particularly smaller and/or regional carriers, continues to rely on traditional EDI files for transmitting enrollment and eligibility data. This disparity was evident during discussions at the WEX SPARK conference I attended recently, where many third-party administrators (TPAs) mentioned their continued reliance on emailing updates to carriers—a method that further underscores the industry's varied pace of technological adoption.

Client Perspectives on Integration Choices

Through discussions with our clients at, I've gained insights into the reasons behind their choice of data integration strategies. Many clients indicated that their decision to continue with traditional methods stemmed from a readiness perspective; both they and their partners were not yet prepared to fully transition to an API approach. Instead, they sought to leverage our platform to automate and streamline their manual processes for preparing and processing 834 files. This approach has allowed them to improve efficiency and accuracy in data handling without significant change or investment. Many people's views on 834s were “if it ain’t broke…”!

Data Sharing Woes: The Challenge of Standardization

In the benefits industry, a persistent challenge is the tug-of-war over who should take responsibility for standardizing data before it reaches carriers. Each carrier often demands specific formats, slightly different from the others, while Benefits Administration and Human Capital Management companies typically have their own unique output formats. This discrepancy leads to a lack of consensus on standardization responsibilities, creating inefficiencies and potential errors in data processing.

Thanks to the efforts of industry organizations like LIMRA and the establishment of LDeX standards, there have been noteworthy improvements in post-enrollment data sharing. However, the industry still faces substantial challenges with the time-intensive process of manually preparing file data. This ongoing issue underscores the need for more streamlined approaches to handle data efficiently.

The Bottlenecks of Manual Data Preparation

When leveraging APIs is not feasible, the industry's focus shifts towards extracting data from benefits systems and preparing 834 files. Discussions with clients and industry experts reveal that this is one of the most significant bottlenecks, primarily due to the extensive time required to prepare and process this data. Additionally, the errors that occur in this stage can have serious downstream impacts. A recent study highlighted that nearly 50% of providers saw an increase in their denial rates over the previous year, with mistakes in patient access registration, such as eligibility issues or missing prior authorizations, being the primary causes of these denials.

The Role of Clearinghouses in EDI-Based Data Sharing

For scenarios where EDI remains the method of choice for data sharing (~80% - 90% of current enrollment and eligibility), clearinghouses frequently serve as the go-to solution. While clearinghouses facilitate the processing and transmission of data, they come with their own set of challenges. These include escalating costs as transaction volumes increase, a lack of control over the integration process, and limited flexibility to scale or develop new integrations in response to evolving data integration requirements. This situation often places a strain on organizations, especially those growing or changing rapidly, who find the rigid structure of traditional clearinghouse models limiting.

Direct Connections: Challenges and Opportunities

For large carriers and benefits platforms with sufficient resources, establishing direct connections is a time-consuming but worthwhile endeavor. These integrations, which often involve customizing systems to facilitate seamless data exchange, can take anywhere from six to twelve months at a minimum to fully implement. This lengthy process reflects the complexity and scale of such projects. Despite the significant time and financial investment required, these direct connections can be highly advantageous for handling large volumes of data efficiently. When the transaction volume justifies the initial outlay, the long-term benefits in terms of reduced processing times and enhanced data accuracy make this a viable strategy. Not all these partnerships or integrations are API-based from the start. Some Benefits platforms begin with tailored file outputs that are specifically designed to meet individual carrier requirements, easing the transition towards more sophisticated integrations over time as the partnership grows.

Conversely, for smaller platforms and more regionally-focused carriers, the financial and logistical challenges associated with building out these direct connections often render them impractical. Limited budgets and smaller staff sizes mean that these organizations frequently rely on more traditional methods of data handling, such as manual file preparation. This approach can be incredibly time-consuming and prone to errors. For instance, one client reported spending over 40 hours preparing a single carrier file with more than 400 columns - a task that consumes an entire workweek for just one customer. This not only illustrates the intensive labor involved but also highlights the potential for inefficiency and the urgent need for more scalable solutions in smaller operations.

The Need for Scalable Solutions

This stark contrast in capability and resources between large and small entities underscores the need for scalable data integration solutions that can accommodate the diverse needs of the benefits industry. For smaller organizations, leveraging third-party services such as clearinghouses or adopting simpler, less resource-intensive technologies might provide a more feasible path forward. These solutions can offer a balance between cost and functionality, enabling smaller carriers and platforms to improve their data management practices without the overwhelming investment required for direct connections.

EDI and 834 Persistence: Not Going Anywhere

While the push towards an API-first strategy offers distinct advantages and newer technologies have simplified the transition, it's important to recognize that APIs are not a novel concept. Moreover, shifting an entire system to an API-based architecture involves a lengthy and complex implementation process.

Despite the technological advances favoring APIs, EDI and 834 enrollment and eligibility files remain deeply entrenched in the healthcare and benefits industries. These formats have stood the test of time due to their robustness and widespread adoption across various platforms and carriers. They provide a standardized method for data exchange that many companies are already equipped to handle, making it a reliable choice for both sending and receiving critical enrollment information.

The persistence of EDI and 834 files is also supported by their compatibility with legacy systems, which are prevalent in many established companies. These systems require significant resources and time to update or replace—resources that not all organizations are ready or able to commit. Additionally, the regulatory environment often moves at a slower pace than technological innovation, which means that compliance requirements can sometimes lag behind new tech trends, further entrenching the use of established methods like EDI.

In short, while the benefits sector continues to evolve, and API technologies develop, EDI and 834 files will likely remain a staple in data exchange practices for the foreseeable future. They offer a stable, well-understood, and reliable method for managing data flows in environments where new technology adoption is gradual or constrained by other factors.

The Road Ahead: Reducing Manual Work

The Benefits space is going through an interesting time and it’s great to see so much talk and work being done around digital transformation. Rome was not built in a day, and similarly, it’s going to take time to fully transform the data-sharing requirements present in the Benefits space. 

In my recent discussions within the industry, it's evident that carriers and Benefits companies have a wide range of requirements, limitations, and constraints. Fortunately, there are effective solutions available to minimize manual data processing for everyone involved. These include adopting an in-house API strategy, utilizing external platforms, or enhancing EDI file processing through data integration platforms or clearinghouses. Each of these methods offers unique advantages, and many companies are leveraging these diverse approaches to make significant strides in transforming the Benefits industry.

At, with our platform being built for working with both files and APIs, we’re excited to be able to help companies in the Benefits space reduce their time spent on manual data preparation and sharing.

As I mentioned at the start, these are my initial thoughts after just a few months in the space. I’d love to speak with others in the industry to hear your thoughts, outlooks, and approaches to data integration as well as add to the brilliant connections that I’ve already made - find me here on LinkedIn and I look forward to speaking with you!