518-373-4111
Artificial intelligence (AI) is transforming the design, delivery, and experience of employer-sponsored benefits. While AI is commonly leveraged for HR functions, the technology can also bring smarter, faster, and more personalized benefits solutions to both employers and employees. In fact, Mercer’s latest Global Talent Trends study found that approximately 40% of HR leaders use AI for benefits administration. This article explores how AI is shaping employee benefits for both employees and employers.
AI Impact on Employees
As AI continues to reshape the workplace, its influence on employee benefits is becoming increasingly personal and practical. AI can enhance how employees interact with and understand their benefits. This section highlights how AI is transforming the employee experience with benefits.
Benefits Personalization
One of the most transformative changes is the personalization of benefits. AI systems can analyze employee data (e.g., health claims, lifestyle preferences, and engagement history) to recommend benefits that align with individual needs. This means employees are more likely to be offered relevant options, whether it’s mental health support, fertility services, or chronic disease management. The result is a more meaningful benefits experience that drives higher satisfaction and utilization.
Benefits Navigation
AI is also revolutionizing benefits navigation. Available 24/7, virtual assistants and chatbots can help employees navigate complex benefits decisions, compare plans, estimate out-of-pocket costs, and understand coverage. Notably, this type of real-time support from chatbots may also help offer mental health support to individuals navigating treatment. These tools help reduce confusion and empower employees to make informed choices, particularly during open enrollment or life events (e.g., marriage, childbirth, or job changes). As with any technology, employers should also consider ways to roll out these new tools and provide support and training to ensure their effective use. While AI may seem intuitive, many employees may need help building their capability. In fact, McKinsey reports that more than one-fifth (22%) of employees have received minimal to no support for the use of generative AI, so training could help boost adoption in their day-to-day usage.
AI Impact on Employers
While employees experience AI’s front-end advantages in benefits, employers are seeing equally powerful changes behind the scenes. AI has the potential to help HR and benefits teams shift their focus from operational tasks to strategic initiatives. This section explores how AI is streamlining tasks and fueling decision-making for plan sponsors and benefits leaders.
Benefits Administration
Behind the scenes, AI is also streamlining benefits administration for plan sponsors. A Mercer study revealed that AI and automation could replace more than half (52%) of a rewards team’s workload, including tasks related to benefits administration and routine employee inquiries. Furthermore, tasks such as claims processing, eligibility checks, and compliance reporting can be automated, reducing errors and allowing benefits teams to focus on strategy rather than paperwork. AI also enables real-time monitoring of benefits usage and costs, allowing employers to adjust offerings dynamically based on emerging trends.
Predictive Insights
AI also enables predictive insights, allowing employers to anticipate future healthcare needs and costs by analyzing patterns in claims and wellness data. For example, if AI detects a rise in musculoskeletal issues, it might prompt the introduction of physical therapy benefits or ergonomic assessments. This proactive approach helps control costs while improving employee well-being.
Compliance and Risk Management
AI systems can also enhance compliance and risk management. This technology can monitor benefits-related regulatory changes and flag potential compliance issues in real time, helping employers stay ahead of legal requirements.
Conclusion
AI is not just optimizing benefits; it’s transforming them by making benefits more personalized, accessible, and responsive. As AI becomes more embedded in benefits platforms, employers should also consider data privacy and transparency concerns. Ensuring that AI tools are used ethically and equitably is essential to building trust and maximizing their impact on the workforce. Ultimately, AI is helping employers deliver a more modern and human-centered experience to employees as they navigate their increasingly complex benefits offerings.
Employers should continue to educate themselves about market trends and consider how AI can improve or streamline their benefits-related processes.
© 2025 Zywave, Inc. All rights reserved.
Offer Employee Benefits Through GTM
Frustrated with your current employee benefits provider? The local employee benefits team at GTM is here to help you find the right plan to fit your budget and excite your employees. GTM’s employee benefits design skills, cutting-edge technology, and expert HR support can help you streamline and automate processes, reduce costs, and alleviate administrative burdens, all while delivering benefits that delight your workforce.
Let the GTM Insurance Agency help you create and implement a competitive, customized, and cost-effective benefits package for your employees while reducing the burdens and costs of managing benefits on your own. Get a free quote today.
