Mining unique data from an unlikely source
It is not often people in the employee benefit space have positive remarks to say about the Affordable Care Act. However, a data software company has noted that the soon-to-be replaced health insurance law created a surprisingly positive side benefit: A unique set of employee healthcare data that was once extremely difficult to obtain.
Following the launch of the ACA, benefit providers had access to up-to-date employee health expenses and usage data from the then-new health plan's 1094 and 1095 tax forms, which were created for the new plan. In the past, brokers and employers had to conduct their own custom data projects to access data pertaining to HRIS, payroll, benefits, leave and COBRA if they wanted the same analytic picture of their full-time and part-time workforce with details about their workers' region, age, gender and plan usage. These custom, usually "one off" data projects were often time consuming and prohibitively expensive.
Michael Showalter, executive vice president, sales and marketing of ACA compliance firm Health e(fx), says the ACA created some unique data sets specific to benefit companies and end users that were, in his words, “very interesting.”
Until the implementation of the ACA, Showalter says “rarely have companies ever put together benefits data with payroll data, with HRIS data, with leave data and COBRA data.”
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This indicative data — basic employee census information that is sourced from payroll or HRIS systems from employers to a third-party administrator — is “way ahead of claims and what we've relied on historically,” he says.
“When we have all of this indicative data that is forward-looking ahead of the claims, you can use analytics to model out changes,” he says. Before this data came onto the scene after the ACA rollout, Showalter likens it to “looking in a rear-view mirror to make a forward-looking decision.”
Firms are now able to get a clear snapshot of their workforce and their insurance and healthcare spending. Plus, they can monitor for ACA compliance especially for rules that have expanded since its rollout in 2010. This includes, for example, the requirement for a company to provide health coverage to 95% of its workforce that works more than 30 hours per week, which is up from 70% of employees who works more than 30 hours a week.
“Before these datasets were combined, some multi-state large employers with very diverse workforces had never put that data together to understand what their workforce looked like and who they are providing coverage to on an aggregated, validated and auditable way,” says Showalter.
One such client was Arby’s Restaurant Group. The company that manages fast-food restaurants across the U.S. hired Health e(fx) to gain greater insight onto its ACA compliance, tracking and reporting. “This gave us powerful data to make smart decisions and manage costs,” said Robert Norton, director of employee benefits for ARG, in a Health e(fx) white paper.
Some Health e(fx) clients have used this data to manage their workforce for years, claims Showalter. They use it to understand full-time and part-time benefits, their responsibilities in different regions of the country, what role gender plays ion healthcare usage and expenses and more.
Following that, the employers ask, “How do I apply benefits given those workforce characteristics?” according to Showalter.
Back in the old data days
In the past, companies would spend hundreds of thousands of dollars in a one-off project to create this data picture. Why so expensive and rare? The data was simply spread too far and was difficult to collate and analyze. “What was cool about the complying with the 1094 and 1095 forms was that this data was now available to them on a monthly basis,” he says.
“But as a result of Obamacare, you have these datasets being combined every month. Now the data that was available to you only once every few years and at great expense is now available to you every day on your desktop,” he says.
Showalter hopes that the replacement of the ACA — whether it is a new health insurance plan based on Speaker Paul Ryan’s “A Better Way Plan” or HHS Secretary nominee Tom Price’s plan, continues to provide this data. “We also hope that this unique dataset is expanded to include tax credits and individual state level datum,” he says.
Not for everyone
Not everyone sees a demand for such unique data. “I don't think the Affordable Care Act had any impact on the sources of the data. We get it from the same place. I think [ACA has] had a huge impact on plan design,” says Tammy Quinn, senior vice president and director of data analytics for Lockton Companies.
“We're starting to get more into tying biometric screening values so that we can better identify lifestyle-related issues,” she says.
She adds that Lockton’s clients use biometrics to look at possible undiagnosed illness, such as high cholesterol or high blood pressure and if employees have not been treated by a physician as shown in the claims data. “Then we can glean that there might be a little bit of care avoidance,” she adds.
Quinn notes that clients are more interested in “real-time” data from hospitals and insurance carriers, which can often take up to 45 days to generate.