Human resource leaders are investing more time than ever in designing benefits strategies to help attract and retain employees in a hyper-competitive hiring climate. But experts say the impact of offering new or enhanced benefits is undermined if employees are routinely frustrated or confused when choosing or using benefits packages—outcomes commonly caused by outdated or cumbersome benefits administration technology systems.
A study from Mercer found that over two-thirds of organizations plan to enhance health care and benefits offerings in 2023 to support hiring and retention, as well as address new or unmet needs of different workforce segments. The average cost employers will pay for that health care will rise by almost 7 percent next year, according to a survey by Aon.
Against that backdrop of rising costs, experts say organizations that fail to take advantage of tools—such as artificial intelligence to help employees make benefits decisions, application programming interfaces (APIs) that improve the speed and accuracy of benefits transactions by integrating disparate systems, and new analytics tools to measure benefits' return on investment—risk wasting the investments they made to attract new workers and keep existing ones on board.
Using AI for Decision Support, Personalized Recommendations
Choosing among different benefits plans and providers during open enrollment is a difficult and often anxiety-inducing task for employees. To provide improved guidance and decision support, more benefits administration platforms are using AI to help employees compare plans and to offer personalized recommendations.
Despite concerns about new regulatory oversight of AI in the workplace, many executives plan to expand use of the technology in the near future. A fall 2022 survey from Deloitte and Fortune magazine found that 91 percent of CEOs anticipate investing more in AI over the next six to 12 months. The two top ways those CEOs believe AI can help differentiate their organizations and increase competitiveness is by accelerating intelligent insights and improving decision-making.
New York City-based platform Nayya uses AI to drive personalized benefits recommendations based on an employee's health history, finances, family makeup, life stage and other factors. The platform cross-references data from benefits claims, external consumer information and other sources to help make those recommendations. Nayya also uses proactive communication tools and automated e-mail nudges to help companies boost their open enrollment participation rates.
Benefits experts say such AI-powered decision support tools can have multiple benefits. HR teams often are stretched thin and challenged to provide individualized benefits support to large employee populations, and tools such as virtual assistants can address many frequently asked benefits questions. The ability to scale decision support with AI is also particularly valuable for high-turnover industries where new hires are constantly coming on board and needing to select benefits.
One factor driving advances in decision support tools is the improved ability to access and combine different data sources to make personalized recommendations. "It's a new ballgame now with decision support because of data," said Rhonda Marcucci, vice president of innovation at Gallagher, a provider of HR and benefits technology consulting services. "The ability to add external data to internal data like claims information allows for a new level of personalized guidance for employees."
Marcucci said the best decision support tools not only help employees choose the right benefits, but also help them use those benefits more effectively.
"Because of access to that combined data, you're starting to see more platforms be able to help employees optimize use of their benefits," she said. "For years, employers have spent huge sums on benefits, but many employees often don't even know what they have at their disposal or how to best use them."
Virtual Assistants Ease HR's Workload, Enhance Service
Businessolver is another technology platform with a recommendation engine to simplify and enhance the benefits selection process for employees. The platform also features a virtual assistant, Sofia, that has proved to be a workhorse for answering employees' questions.
Sofia answers queries around the clock via text chat, phone or a mobile app in 27 languages, and it has a back-end system to ensure it remains compliant with the Health Insurance Portability and Accountability Act. If an employee asks Sofia a question twice in different ways and the virtual assistant can't adequately answer the query, the individual is automatically routed to human help for assistance.
Sofia was originally designed to answer frequently asked questions and explain benefits terminology, but over time, it has evolved to handle more complex benefits queries and now uses voice recognition as well as text chat, said Sony Sung-Chu, senior vice president and head of science and innovation at Businessolver.
"We've evolved Sofia to not only help employees select benefits but to help them use benefits once chosen," Sung-Chu said. "For example, if an employee asks about taking their spouse or child to a doctor, Sofia might respond, 'For this particular kind of illness, telemedicine might be a better solution for you,' rather than that employee spending money on urgent care or the emergency room."
About 30 percent of employee queries to the virtual assistant come after work hours or on weekends, said Sarah Vidoni, vice president of product solutions at Businessolver, making it easier for busy employees to access help as well as lifting the benefits support burden from HR service teams.
"We've seen it create new efficiencies for administrative teams in not having to respond to all of the e-mails or calls related to benefits, especially during the busy open enrollment season," Vidoni said.
Next-Generation Analytics Tools
More HR and rewards leaders also are using new benefits analytics software to help evaluate the impact and cost-effectiveness of benefits programs, with many using the tools to go beyond examining medical claims and eligibility data to assessing things such as the effectiveness of their point solutions.
Benefits experts say strengthening data analytics capabilities and consolidating information sources can produce improved insights and help organizations get a bigger bang for their benefits dollar. For example, a 2021 study from Mercer found that for 69 percent of organizations, it would take longer than a week to answer this simple question: Which of our benefits costs the most?
One provider of specialist analytics software is Salt Lake City-based Artemis Health, which collects an organization's benefits data from multiple sources and integrates it for analysis through user-friendly dashboards and graphics. The platform aims to help benefits leaders go beyond using information such as employee feedback to analyzing objective data such as claims to evaluate the effectiveness of benefits plans and monitor rising costs.
One goal of the software is to take the guesswork out of whether point technology solutions, such as those for diabetes care, musculoskeletal (MSK) conditions or wellness programs, are delivering on the promise of improved employee outcomes.
"We use data to help organizations decide where they can get the biggest bang for the buck with all the different point solutions they might roll out," said Grant Gordon, co-founder of Artemis Health.
For example, the software could help HR leaders evaluate the impact of two different MSK programs available to employees, one a legacy program inherited during a company acquisition and the other a more recently implemented program. The software would analyze member engagement, care and utilization, financial impact, member satisfaction, and clinical outcomes to create scores for each MSK program.
Mark Stelzner, founder and managing principal of IA, an HR advisory firm in Atlanta, said he's seen more research and development—as well as private equity investment—going into developing improved benefits analytics tools. But he said employers still need to tread carefully in this area because of privacy concerns about health care data.
"Organizations are trying to define the line of demarcation between what their role is as an employer and the employee's right to privacy concerning their personal information, even for insights that might come from anonymized benefits data," Stelzner said. "Many employers are taking an understandably conservative approach to this, allowing employees to opt in or opt out on a wide variety of use cases around using benefits data for analysis based on their privacy concerns."
Dave Zielinski is principal of Skiwood Communications, a business writing and editing company in Minneapolis.