Third-party administrators need to keep up with changes in technology, society, and business. If you’re too slow to adapt, opportunities can pass you by, limiting your growth and income potential. Building programs from the ground up takes too much time; APIs are the not-so-secret sauce that savvy TPAs leverage to move full speed ahead.
What Are APIs?
API stands for application programming interface.
HubSpot defines an API as a type of software-to-software interface that provide a secure and standardized way for applications to work together and deliver information or functionality without user intervention. These days, APIs are everywhere – even if you aren’t familiar with the concept, you’ve probably used programs that rely on APIs. For example, you may use Fandango to find local movie times. The website uses APIs to request information from the databases belonging to various theaters.
IBM explains there are four types of APIs. Internal APIs are private and only available for use within a company. Open APIs (also called public APIs) are open-source APIs you can access via the HTTP protocol. Partner APIs connect business partners, often requiring login credentials before you can access the API. There are also composite APIs, which combine multiple APIs to facilitate tasks that require information from several sources.
How APIs Enable Strong Ecosystems
APIs make it easy for business partners to work together, which is critical to the success of modern business ecosystems.
Investopedia describes a business ecosystem as a network of organizations involved in the delivery of a product or service. The organizations that make up an ecosystem can include suppliers, distributors, customers, competitors, and government agencies.
As technology has become more sophisticated and complicated, business ecosystems have become more important. As EY explains, companies that use ecosystems are in a better position to drive innovation and capital efficiency. Companies that leverage ecosystems can create more value than would be possible on an individual level. Companies that don’t use ecosystems risk falling behind.
How Can TPAs Leverage APIs?
As a TPA, you need to offer your clients a modern benefits administration experience. You also need to manage your own costs and time and reduce the risk of expensive errors. If you just use your own resources, you may be unable to achieve all this. Even if you have the resources to leverage modern technology, rolling out new systems can take significant time when you’re doing everything in-house. In the meantime, your competition may race ahead of you, putting you at risk of losing clients.
APIs can help you adopt new technologies fast. Instead of trying to do everything on your own, you work with vendors who have already created and refined the systems you need.
APIs can also create much more streamlined experiences. As a TPA, you need to pull data from multiple sources. For example, when you’re administering COBRA benefits, you’ll need information on the covered individuals, the health plan, and the relevant federal and state laws. With the proper APIs in place, you can access all this information in the same place. As a result, you save time and reduce the risk of mistakes.
Case in Point
Imagine your client wants a customized report – this is a fairly common request from employers. The employer may need the report to support premium reconciliation or to provide insights into benefit usage and inform future benefits decisions. Either way, the faster you can generate a customized report, the happier your client will be. In addition, the report needs to be accurate, which requires a lot of data from different sources.
With the right APIs in place, the entire process is a snap. You can draw on the necessary data to create the customized report you need in very little time. You’ll have made your client happy and demonstrated your value as a TPA – no one needs to know how easy it was.
Work Smarter, Not Harder
Modern technology has changed expectations. Thanks to APIs, TPAs of any size can leverage sophisticated programs.
Are you ready to see how APIs can help your business? Our COBRA administration software leverages API integration. With a simple one-time setup, you can easily manage your EDI 834 files, import and export data, and integrate your external systems with our web-based COBRA administration software.
