Feb 08, 2021 Admin

EDI Service Provider

Know How EDI Services Help an HR to Exchange Information with Insurer Carrier

Once an employee gets enrolled in an organization, one becomes an integral part of it, it doesn’t matter if in what designation or the role he/she plays in the organization. 

Being an employer, it becomes essential to ensure adequate safety and health measures for the newcomer. In fact, most of the countries have even made it mandatory to ensure medical safety first and also to be a contributor to the larger portion of the insurance premium.

People nowadays keep themselves insured from insurance carrier for their specific abilities and requirements. Thus, customizability is a must requirement for the insurance service providers as well.

Similarly, an EDI service providing software is a must requirement for an enterprise business due to a huge amount of exchange of information between distant points of communication. But knowing what EDI is before getting started with it is even more important.

Let us assume an enterprise software development company in the USA as an example with ‘n’ number of employees in it. The HR department in it has to make sure that each of the employees are insured for their health or not. 

How does this medical safety assurance work?

Well, it is mandatory to keep an employee insured either through the corporate or individually. Now a few of the employees do not opt to get insured from the corporate insurance carriers and prefer doing the same individually.

But for those, who opt to get insured through corporate, needs to pass their credible identity and other information to the company so that it can be further passed on to the insurance carrier.

Here, in between the information exchange, usually, the data gets manipulated or even lost sometimes which invites trouble for an individual or the corporate altogether.

To solve this problem, EDI or electronic data interchange is a technology, developed as a medium or a platform to exchange necessary information and keep the data safe.

Most of the successful enterprises are using the EDI as their platform of information exchange.

How EDI works?

Electronic data interchange is a technology in which the two peers or the two concerned point of exchanges are meeting each other via a middle-man i.e. a computer in between them that ensures the safety and encryption of the data going to be exchanged using that route.

The manipulation of the data or losing the same were some of the most vital problems that have been solved with the help of EDI services. 

In EDI, the two points of exchange are the broker and or the proposer and the insurer’s carrier. EDI services come in the role when the information is sent from one point to the other that are obviously not nearby physically.

Value addition by the middle-man

In EDI, the middle-man adds value to the information passed in the form of encryption. FYI, the EDI services are of two forms i.e. Cloud-based and the other is the older one i.e. traditional EDI. You may choose one according to the resources and capital availability.

Make sure you explore how the value addition works over the cloud and why should you choose cloud-based EDI over the traditional one?

A few from non-technical backgrounds might doubt that encrypting isn’t a value addition anyways. But it is actually.

Value addition is nothing but modifying the form of data which could either raise its value or does not let its value decrease.

Encryption provided to the data here isn’t letting the data get manipulated and thus, is saving it from degradation or going less credible, hence, value addition is justifying.

How EDI Works

Image source: https://acctivate.com/

What is TP or TPA?

It is again a middle-man but this time as a person or an office itself. A third-party administrator (TPA or TP) works equally for the insurer’s carrier as well as the beneficiary.

In the case of claim settlement, not the insurance provider deals with the customer directly, but the TPA personnel does.

Here, EDI keeps playing its role by allowing both parties to keep exchanging information necessary for the claim settlement process.

Different Orders in EDI

Basically, these are the types of exchange orders, assigned their names to identify what has been exchanged without having required to see the information every time.

As the information needs to stay confidential no matter if the company is the platform for this exchange or not. Thus, allotting the unique order numbers or identity to them helps to recognize the type of information in it. Usually, there are three of them-


When an employee chooses a particular plan and continues to proceed with it, the insurer gets the information or the purchase order through the EDI 850 transaction. It can be defined in another way as the information is sent to the vendor through EDI 850 by the purchaser.

Just not to be confused with it. And keep in mind that when something is bought or purchased, the payment information goes through the EDI 850 transaction.


When the transaction is made, obviously the payer would require an invoice for the same. The EDI 810 transaction type brings an invoice to the payment done by the beneficiary.

We can memorize in a way that, when the order for the purchase or the EDI 850 comes in, it requires the EDI 810 in return as the status or the proof of the exchange made very recently.


To understand this, just assume you have purchased a set of products with different specifications in just one order. Let’s say, 4 items in one go. 

Once you complete the order by making payment, you’ll receive the invoice through 810, but to ensure you about the products or services you have purchased are the following, EDI 856 brings you the same information right after the purchase order is made successfully, but before receiving the service actually.

The EDI 856 is nothing but a list of the services you have selected and paid for, but before the services received physically by you.

How Does HR Got Helped Here?

The HR department is always answerable on behalf of the company for managing all the above compulsory services for their employees. They are one of the most crucial parts for any organization as their pace of work keeps the company’s growth in sync with them. 

The faster and more agile the HR department is, the quicker the company would grow.

Read more: HR Tech trends: What to expect in 2021?

Human resources apart from all this stuff that we have discussed in this article till here, is answerable for many other stuff that is equally important to the enterprise business. And the other stuff includes-

  • Recruiting
  • Managing the office
  • Managing the employees
  • Managing the resources 
  • Training and placements
  • Payroll management
  • Compliance management
  • Attendance management
  • Employee Benefits administration
  • Information exchange with concerned officials
  • Legal works, etc.

These are the wholesome things that the HR department has to go through every day and yet is not credited as much as the executive or development department is praised for the growth or success of the company.

However, an HR personnel has to keep going with its duty whether it is visible in others eyes or not. 

But, to help them out, there exist some hcm solutions or HRIS software that keep up the work with a handsome rate of processing and execution, which indirectly helps in accelerating the growth rate of an organization.

EDI services are a part of such hcm solutions that come as a platform, for say, Accomplish, which is a pioneer to manage the entire HR rolls all by itself at once. The HR roles include information exchange, payroll services, attendance management, compliance management, employee benefits management, time and attendance management, and of course the EDI services, and whatnot.

Once you have enrolled your organization with such a platform, the workload for the HR department would vanish out at a bigger level. Also, it will allow the HR personnel to share the documents and necessary information without having to be over caring for its loss or any kind of manipulation meanwhile the exchange.


EDI services are known to be well-encrypted and thus, are in use with more than eighty percent of the global enterprise businesses today. 

All you have to make sure is to get your HR department an all-in-one platform that must possess EDI services within or at least can be integrated with an EDI service providing tool later. Also, you must know the advantages of joining EDI VAN with an enterprise business before opting for it.

But, once you get such a platform enrolled within your organization, it could leverage the performance with a whopping rate and mitigate almost half of the workload from the human resources department. 

Insurance and its claim process being some of the most hectic and time consuming tasks to be done by the HR department, are envisaged to be handled with the fullest of its capabilities and ensured safety as well.

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