Beyond the Benefits Menu: Guiding Smarter Employee Choices

Eddie Pinto

Traditionally, employee benefits have been treated as isolated offerings rather than as part of a holistic framework. Employers select health plans, retirement options, and wellness programs with care but present them as standalone offerings to employees — without a unified narrative to tie them together. This fragmented approach can lead to inefficiencies, lower engagement, and increased costs. In reality, benefits are interconnected decisions that significantly influence an employee's overall well-being, financial security, and perception of their employer.

One-size-fits-all benefits are over. Today's diverse workforce has varying needs, life stages, and financial priorities. A 25-year-old recent graduate will have vastly different benefit requirements than a 55-year-old nearing retirement or a parent balancing childcare and career. Disconnected benefits overwhelm employees, leaving them confused and ill-equipped to make optimal choices for their individual circumstances.

In 2024, the average annual premium for employer-sponsored family health coverage reached $25,572, a 7% increase from the previous year. The average annual premium for single coverage was $8,951, a 6% rise from 2023. Despite the substantial investment, employees spend an average of 18 minutes enrolling during open enrollment, highlighting a disconnect between benefit offerings and real engagement.

Disconnected decisions

Employers invest heavily, yet employees remain unsure how to engage with their benefits effectively, which creates a costly paradox. They may overinsure in one area, miss out on valuable programs in another, or forgo relevant offerings entirely. Many employees don't fully understand their benefits. This lack of clarity prevents employees from maximizing their benefits.

The impact of this confusion is clear. More than half (53%) of employees regret the benefit choices they made during the last open enrollment period, acknowledging that these choices can have lasting consequences on their health, finances, and overall well-being.

This isn't just an education issue; it's a design issue. Benefits should reflect how people make decisions: weighing coverage, cost, and risk across a single household budget. Choosing a high-deductible medical plan may make sense only if paired with a health savings account and voluntary coverage, such as critical illness or accident insurance. Employees shouldn’t need to be benefits experts to make smart choices.

Progressive discovery

Employers must provide clear, intelligent guidance upfront instead of asking employees to navigate a complex labyrinth of benefit options. It starts with simplifying the entire experience. Modern decision-support tools can leverage advanced analytics and data-driven models to offer hyper-personalized suggestions for best-fit plans and coverage amounts. These tools can simulate real-world scenarios, like routine care or worst-case medical events, and present tailored plan options based on likely outcomes, considering factors such as an individual's demographics, dependents and risk preferences.

This approach reduces anxiety, improves confidence, and guides employees toward the right fit without requiring expert knowledge. The concept of progressive discovery, which involves revealing more detail only when employees want it, further reduces friction. Employees can explore recommendations, adjust inputs like household income or preferred coverage levels, and receive updated suggestions in real time. This intuitive and easy-to-use approach keeps employees engaged without feeling overwhelmed, ultimately helping them maximize the value they derive from their benefits.

Streamlining HR with AI

The need for clarity in benefits isn't just about helping employees; it's also a critical issue for HR teams. These teams face increasing pressure to do more with less. They must deliver vital insights, manage vendors, and craft targeted messaging, often without the dedicated support of analysts or content specialists.

This is where AI-powered tools become invaluable. They can boost human resources (HR) capabilities by automating routine tasks, such as drafting benefits emails, generating insightful dashboards, and identifying key data trends — all through simple, plain-text prompts. By leveraging predictive analytics, content automation, and natural language queries, HR administrators can step into the role of strategic advisors, freeing them from the need to be data scientists or copywriters. These solutions augment human potential, allowing HR to concentrate on higher-value activities and strategic initiatives instead of replacing human roles.

As AI takes on a larger role in benefits administration, it's essential to adopt it responsibly. That means prioritizing transparency, data privacy and trust while using AI to augment, not replace, human decision-making. A human-centered design must lead the way, making AI-powered tools intuitive, empathetic and tailored to real-world use cases for employees and HR.

Unified experience

Employers can finally close the engagement gap by addressing both sides of the benefits experience: the employee choosing plans and the administrator managing them. Technology platforms that unify these experiences, deliver targeted guidance, and automate manual tasks help employers realize the full value of their benefits investment.

Eddie Pinto is senior vice president of product for PlanSource.