APIs in benefits: A broker’s path to a more efficient, connected future
In my 25+ years of experience in employee benefits and technology—spanning roles at both Benefitfocus, an enterprise benefits administration platform, and Ideon, where we tackled connectivity challenges head-on—I’ve witnessed firsthand how transformative technology can be for the industry. Today, one of the most significant technological shifts in benefits administration is happening behind the scenes: APIs (Application Programming Interfaces).
APIs aren’t just a tech industry buzzword. They’re a fundamental shift in how benefits data moves between platforms, carriers, and vendors. And as a broker, it’s no longer optional to understand them—you need to make APIs a key part of your strategy.
Whether you’re helping employers find the right benefits solutions or guiding them through the complexities of benefits administration, API connectivity is going to be a game-changer. Here’s what brokers need to know about APIs, why they’re critical, and how you can stay ahead of the curve.
APIs simplified: The backbone of a modern benefits ecosystem
At its core, an API is a bridge. It connects two or more software platforms, allowing them to exchange data seamlessly in real-time. Imagine a GPS app like Google Maps: when it pulls in live traffic data, that’s an API at work. The same technology underpins how benefits systems communicate, from HR platforms to insurance carriers and everything in between.
In the past, EDI (Electronic Data Interchange) was the dominant data exchange method, but it was slow, cumbersome, and prone to errors. In an age where people expect instant gratification—think Amazon, Netflix, or even food delivery—APIs meet those expectations with speed and efficiency.
For brokers, this means faster enrollment, fewer errors, and more reliable updates to benefits data. Rather than waiting weeks for system updates or dealing with endless back-and-forth between platforms and carriers, APIs make the process smooth and automatic. As a result, brokers can focus on providing strategic advice rather than getting bogged down in administrative tasks.
The state of API adoption: Progress, but not there yet
While APIs are clearly the future, the transition is still underway. A survey from Ideon and LIMRA offers valuable insight into the current state of API adoption within the benefits industry. The findings are clear: carriers are developing APIs, but widespread usage is still limited.
76% of carriers report having API capabilities, but only 8% use them for most of their transactions.
Even though 84% of carriers claim real-time capabilities, the majority of their data exchange is still not processed in real-time.
Why does this matter for brokers? Speed and efficiency are the key benefits of API adoption. With faster updates and more accurate data, brokers can offer clients more flexibility. Imagine being able to add a new benefit or make a plan change in a matter of days, rather than weeks or months. That’s the power of APIs.
The industry is making progress, but there’s still a long road ahead. The more brokers push for API-powered solutions, the quicker the industry can realize its full potential.
Bridging the knowledge gap: What brokers need to know
As a broker, you don’t need to be a tech expert, but understanding API basics is essential. From my time at Benefitfocus and Ideon, I learned that the key is to know how APIs affect the benefits experience, so you can ask the right questions and choose the right platforms for your clients.
When evaluating benefits administration platforms, keep these questions in mind:
What types of data are exchanged via API?
How frequently is the data synchronized across platforms?
Do the carriers your clients prefer support API connectivity?
How long does it take to implement a new benefit or make a plan change?
By asking these questions, you’ll ensure that the solutions you recommend are not only API-enabled but API-efficient, which will drastically improve both the broker experience and the client’s experience.
What’s at stake: Embracing the shift to APIs
The stakes are high. As the industry embraces APIs, brokers who stay ahead of the curve will reap the rewards. API adoption offers faster enrollment, fewer errors, and an overall better experience for employees—critical factors as companies look for ways to stand out in an increasingly competitive job market.
But if brokers don’t prioritize API connectivity, they risk falling behind. Over the next few years, carriers and benefits platforms will either become leaders in this space or be left behind. Brokers who embrace their role as technical advisors, guiding clients toward integrated, API-optimized platforms, will be the ones leading the charge.
The road ahead: A more connected future for benefits
We’re on the brink of a digital transformation in the employee benefits space, one where APIs play a pivotal role in connecting carriers, platforms, and brokers. The benefits experience of the future will be faster, more accurate, and more responsive to the needs of employees and employers alike.
Brokers have a critical role to play in this transformation. By understanding the power of APIs and advocating for their adoption, you can ensure your clients have access to the best, most efficient benefits solutions available.
The shift to API connectivity is more than just an upgrade—it’s a foundational change in how we manage benefits. The sooner brokers embrace this change, the better positioned they’ll be to lead their clients into the future of benefits administration.