As the ACA comes into play this year, employers with 100 or more full-time employees must offer affordable, minimum essential coverage to said employees. Such coverage must cost less than 9.5% of annual household income, and employers must pay for at least 60% of covered services for the employee, and any dependent children under the age of 26.
Previously, employers weren’t obliged to provide such cover, so it is without a doubt that this will increase the volume of insurance policies in the market. There have been two solutions suggested to deal with this increased volume:
- Increase the number of Claim Processing staff
- Update Claims Technology to improve claim processing efficiency
Increasing the number of claim processing staff will without a doubt enable insurers to deal with an increase in policies and incoming claims. However, a permanent increase in staff will be costly due to training, HR administration, and salaries. Untrained or less qualified staff may also increase pressure on existing staff members.
There is also the issue of legacy systems in the insurance industry, which may negatively affect claims processing efficiency. Legacy systems result in silos of information, with little or no integration. With mobile capabilities and big data analytics at the forefront of insurers minds over the past few years, it is essential to consider integrating data and improving claim-processing capabilities.
A recent Novarica report showed that companies spend nearly twice as much on maintaining existing IT equipment than on upgrading to new solutions. Upgrading insurance solutions is expensive but should be considered an investment. Spending resources on existing technology, without significant upgrades, is not going to improve claims processing efficiency. Investing in a new and improved solution that can be configured to meet changing business needs allows companies to evolve, rather than simply maintain their existing solution.
In this day and age, with ever-changing business conditions, it is essential that insurers can react quickly to avoid falling behind their competitors. Hence, investing in upgraded claim processing solutions is more practical to deal with the expected increase in group insurance policies.
The Standard Insurance Company approached ClaimVantage two years ago, looking to implement a configurable claims management solution to increase speed to market, and react to market changes such as impending ACA. Read more on this partnership here.