What is EDI 834?
Electronic Data Interchange (EDI) is a standardized file structure to move information between two systems. One standard setting body the American National Standards Institute (ANSI) has hundreds of file formats represented by three-digit numbers for accounting, healthcare and various industries. In 1993 ANSI and the Accredited Standards Committee (ASC) for healthcare developed the 834 file format for plan enrollment transactions. This meant that systems could transmit electronically participant enrollment and demographic information from employers to insurance carrier’s eligibility, claims and accounting systems.
From Manual to Automated
Most insurance carriers now also provide a website to allow for the manual entry of new, terminated or changes to participant information transaction sets. Of course, tracking which employee information has been updated takes time and meticulous data entry skills and becomes burdensome. The beauty of the 834 file format is that it avoids these repetitive and error prone tasks while giving your team the efficiency required as you scale.
A Team Approach
Implementation of an 834 EDI file depends upon several factors such insurance carrier, EDI vendor and your own team’s availability. Your internal cross functional team should be comprised of benefit, accounting, and information technology staff. Each insurance carrier will have an EDI guide commonly referred to as a “structure” document. Your cross functional team will be helpful to coordinate answers regarding the administration and plan rules to facilitate carrier discussions. The analysis of the EDI structure document and the technical implementation and testing commonly can take between three and twelve weeks.
Getting Started with EDI 834
While some larger companies have EDI experienced analysts or developers on staff, your enrollment, HRIS or third-party EDI software platform vendor many times create your 834 file feeds. Transmission of these feeds is automated through secure file transmissions. Testing with insurance carriers is required prior to beginning of production transmissions. Files can be transmitted on a weekly basis with carriers providing a discrepancy report for incomplete enrollment information for your team’s review.
Candence & Controls:
Correcting weekly discrepancy reports usually resides with the entity that understands how to read the report, is closest to the data, and has the system permissions to fix errors like missing dependent or date of birth information. Maintaining the process is imperative to keep things accurate in the carrier system and requires staff that can devote the time and effort to the process.
Benefits of 834 Files
The benefits of using EDI 834 files, are significant, from the efficiency and timeliness of the process, quality of the data transmitted to the ability to include fields like department or business unit that can later appear on your premium invoice and can significantly reduce your accounting work. Job satisfaction is also improved materially as employees receive fewer employee complaints, move from a tedious data entry role into a research and system correction role with a process that can scale with your company.