Managing benefits can be exhausting.
There is an immense amount of legal-sounding text to digest for health and life insurance plans. And even after reviewing that, employees may still be left wondering what the policies will actually cover. Then there could be additional benefits, such as identity theft protection or pet insurance, that workers must wade through and decide if they are necessary.
But there is hope that technological changes will lighten this burden, and companies are working to make that happen by investing heavily in their benefits technology. Forty-five percent of companies increased their HR tech investments in 2023, according to Mercer Marsh Benefits, a global benefits management company.
To offer a closer look at the potential payoff of these investments, three benefits experts weigh in with their predictions of how technology will change the benefits space in the near future. They believe that innovation will make the experience more personalized, more user friendly and lead to better outcomes.
AI at the forefront
The increased use of generative AI across almost every aspect of daily life has created a significant buzz over the last few years. Neal Mulville, vice president of the U.S. health innovation team at insurance agency Aon, believes that the benefits sector is no exception, especially when it comes to healthcare.
"Healthcare is lagging — it really hasn't changed in 20 years," he says. "[But] AI is in early innings, and there is a lot of discussion of where this technology can be applied."
One use case would be lightening the load of medical providers so they have more time to see patients. There are not enough providers in critical areas of care — for instance, half of the U.S. population lives in an area deemed to have a shortage of mental health professionals, according to HRSA Health Workforce — so if AI could take over tasks such as transcribing notes, then that translates into a better experience for all.
Or there is the potential for AI to comb through the pages upon pages of benefits coverage that employees are given and then help find the relevant information if someone has a question.
"We know that health literacy is one of the biggest barriers to care, so if we can use [AI] to help solve some of that literacy piece, then that can help with engagement in the benefits."
Finally, AI could help spot important patterns in data that human HR managers and company executives might miss. For instance, AI could be trained on insurance claims information to spot if patients consistently have poor outcomes after visiting a certain provider in a specific city.
Despite the lack of progress in healthcare technology to date, Mulville believes that generative AI will be different.
"What we think is promising about all of this is we will see AI in our work lives proliferate," Mulville says. "How we want to consume other things that come through the work channel will change, [and] it will set the expectation for other areas."
Making it more user friendly
Consumers have come to expect a seamless experience because of the technology readily available in other areas of their lives. Think using an iPhone or shopping on Amazon. Advances in HR technology will move the benefits experience closer to that by making it more accessible and easier to understand, according to Suresh Moorthy, digital leader for Mercer Marsh Benefits.
"By adopting a distribution model similar to online shopping, benefit designers and administrators are reimagining the types of benefits offered to employees and how they are communicated," Moorthy adds. "With the dynamic nature of work and the evolving workplace, leveraging technology to deliver benefits has successfully met employees where they are."
Next year should usher in several trends in this regard, including simplified navigational support. Benefit plan communication will include more educational tools and use digital marketing practices to better reach employees, Moorthy says.
"Just as consumers expect quick answers at their fingertips, benefits should leverage smartphones, tablets and devices to provide the same level of convenience," Moorthy adds.
Personalized and proactive
The number of firms providing options for employee benefits has exploded in recent years. Roughly 13,000 benefits startups received venture capital funding over the last decade, according to Sina Chehrazi, CEO and founder of Nayya, a healthcare benefits platform.
"That's insane," Chehrazi says. "Until the '90s, everyone had a pension at work and had health insurance. Now there are way more categories. We spoke to a large employer recently and they offer 41 different benefits categories."
This breadth of choices presents a downside — no one knows their customers anymore, Chehrazi adds. That leads to workers not necessarily getting the right benefits placed in front of them at the right time.
"All of these providers cater to you, but none of them really know you," he says.
Because of that, he believes technology will reshape the benefits space so that offerings are more personalized to each individual. For example, a 40-year-old executive who is expecting his first child is likely interested in different health plans, life insurance and other benefits than a 22-year-old with no dependents who has just finished college.
That change then goes hand-in-hand with another significant shift — technology leading the benefits space to be more proactive. Once again, workers are inundated with choices and information. But most people won't necessarily remember these details when the time comes to needing them.
Evolving technology should allow for an employer to notice things such as a staff member going to an orthopedist three times over the last few weeks, and then alert that individual to any relevant benefits and other options. That alleviates the worker from having to rack their brain for information that was shared perhaps months ago during open enrollment.
"Technology must bring personalization and be proactive so employees can live their lives," Chehrazi says. "Employees are already paying for these benefits. The benefits should just work for them."
All of this should become easier with the use of technology to collect data in a single point to allow for better analysis and application, Chehrazi adds.
"It comes down to the data," he says. "When we collate that data in one place, we can understand where people are in their lives — when you are having a kid or you are moving or getting divorced — [and] we can help them."
