Group Health Insurance Exchange Attracts Large Employers

A growing number of U.S. companies are using technology to streamline the procurement and administration of group health insurance programs. The use of such technology, experts say, is the wave of the future as HR departments seek to control costs and focus on more strategic issues.

A variety of technology companies, consulting firms and even some large health insurance companies are developing solutions to automate benefit plan enrollment, administration and reimbursement using Internet technology. Some large employers are building their own systems, often in conjunction with technology partners.

One technology company, eBenX, Inc., said it has signed up 10 of the country's largest employers to its group health insurance exchange. The service connects employers to multiple health plans using eBenX's Internet-enabled rules and translation engine.

Among the companies using eBenX's exchange are American Medical Response, Inc.; American Red Cross; Bass Hotels & Resorts, Inc.; Chevron Corporation; Dayton Hudson Corporation, Federated Department Stores, Inc.; Georgia-Pacific Corporation; KPMG LLP, Nabisco, Inc.; and the State of Kansas.

"The traditional process that connects employers and health plans is complex, cumbersome, expensive and highly inefficient," said John Davis, eBenX chief executive officer. As a result, employers are looking for services "that streamline the purchasing and administration of their group health insurance programs and reduce costs."

Employers send eBenX their eligibility data using their own format and rules structure. eBenX then sends that same data to their selected health plans, but using the health plan's format and particular rules structure. Neither employers nor health plans need to make changes to their legacy systems to participate in the eBenX exchange.

The eBenX financial exchange technology also streamlines the billing and payment process, said Davis. The company creates a consolidated bill and presents it to the employer. The employer pays eBenX, who then pays that employer's multiple health plans. Health plans accept the eBenX payment, Davis said, because eBenX's proprietary automated reconciliation tool ties payment directly to the eligibility data that has been moving through the exchange to that plan.

These capabilities have been Web-enabled so participants can access information and make changes via a browser 24 hours a day, 7 days a week. "We've also deployed a Web-enrollment tool that allows employees to enroll online," said Mr. Davis.

The company's latest roster of clients represents approximately 125,000 enrolled employees flowing through the eBenX exchange. When fully implemented, the company said the total number of enrolled employees served by the eBenX exchange will be approximately 600,000.