AI in benefits administration: What’s the right problem to solve

Editor's note: This blog post is a direct follow-up to episode 1 of Benefits Innovation Lab. If you haven't checked it out yet, be sure to register to view or listen on demand and download the accompanying free handout to get the most out of this article.

Deciding where to start with Artificial Intelligence (AI) in benefits administration can be a difficult task-and we hope Benefits Innovation Lab from HealthEquity has been helpful as you've gotten your journey underway.

Next steps: How to choose what to do first with AI

Our first episode of the series covered how to decide which employee benefits problems to solve with AI. And if you gave it a watch or a listen, you received our free downloadable chart to help you think about many of those issues further. Now, let's dive a little deeper.

In this blog, we'll cover four potential ideas for AI use among benefits teams, identified by working benefits professionals in a 2024 HealthEquity survey. We'll talk about each opportunity and the considerations you might make while you're weighing them against each other-and against other ideas you may have.

Let's get started by talking about how to gather potential ideas in the first place.

Creating a short list of AI opportunities for your employee benefits team

This blog-and the accompanying downloadable PDF-evaluates four areas of opportunity benefits leaders identified as the most promising for AI use. But that doesn't mean they're the only areas you may be considering.

The best place to start with AI will always depend on the particularities of your team and organization, and you may wish to start by evaluating your team's processes and flagging potential areas of opportunity.

Generally, you can identify the best ideas by evaluating them across four areas of consideration:

• Need. Start by asking if the opportunity would advance your organization's business objectives or contribute directly to your unique value proposition or long-term strategy.

• Value. Estimate the amount of benefit AI would add to the activity by thinking through the relative time and monetary cost, as well as its impact to more qualitative areas like business insight and employee experience.

• Viability. AI thrives when activities are low-risk, quantifiable, and repeatable. Ask yourself if your team has the data and risk appetite necessary to bring in an AI tool.

• Availability. AI is still a developing technology, so any opportunities you identify should have an existing tool available in the marketplace-as well as the organizational budget to support it.

Once you've made a shortlist of opportunities, you're ready to start weighing them against each other.

Asking the right questions when evaluating ideas

There are many ways to evaluate the potential value of using AI to handle a benefits administration process. The most important factors will depend on your individual organization, but five good questions to start with are:

• How much time will it save your benefits team? The best processes to automate are ones that cost your team a great deal of time without requiring a human touch.
• How much time will it save the employees you serve? Employees often forgo important activities that could improve their benefits outcomes if they require too much time.
• What important organizational insights will it provide? Benefits teams thrive on data and insights into how the organization's benefits are being used. If AI can grant insights into how benefits are being used across employee demographics, spot areas where performance is lagging, and generally power-up benefits benchmarking practices, it's worth considering.
• How will it impact employee benefits affordability? Affordability is among the most important factors for employees when they assess benefits quality. Some AI processes may be able to improve that.
• How will it affect the overall employee benefits experience? Your team strives to provide the best benefits outcomes to the employees you serve. AI can often affect employee experience in important quantitative and qualitative ways.

Now, let's examine the four top areas identified by benefits leaders according to these areas.

1. AI could help employees pick health plans

Choosing a health plan is an important event most full-time employees must do at least once a year-and it's often daunting. According to a 2024 survey from HealthEquity, more than a quarter (26%) of employees say picking a plan makes them stressed. Another 13% say they aren't confident they chose a plan that best suits their needs.

Perhaps that's why benefits leaders identified health plan recommendation as a top AI opportunity at their organization.

Employers can't and shouldn't give advice on which plans employees choose, but they do spend time educating employees on how their options compare. Employees then spend time deliberating-often with their families-before making a final choice. AI could hasten this process by analyzing employee health information and personal priorities to recommend a plan best suited to the employee's needs.

This could not only save time for everyone, but it could lead to an employee population more confident about its choices as well. It could improve employee experience by taking the stress and uncertainty out of open enrollment, and it may lead to better employee affordability by recommending low-cost options like a high-deductible health plan (HDHP) paired with a Health Savings Account (HSA).

In turn, your benefits team and organizational leaders would receive more insight about your people's needs and priorities by analyzing AI-assisted plan choices.

2. Employees could interact with AI-powered self-service to get answers to common questions

Employee service questions are another source of time cost for both benefits teams and employees. While some questions require human insight and empathy, many queries are simple and easily answered by AI tools like chatbots.

Using AI-powered service options also reflects employee preference. A recent survey from Tidio revealed that 67% of customers prefer using a form of self-serve over talking to a customer service representative.¹

Automating self-service with AI could free up time for both your benefits team and your employees, while empowering your people to clear up obstacles standing in the way of better benefits outcomes. AI self-service matches consumer preference, providing a better overall experience, and an occasional perusal through the queries the tool receives will give you invaluable insight into overall employee benefits literacy at your organization.

3. AI could automate claims processing

AI is also primed to automate claims processing by auto-completing claims data with receipt photographs and alerting employees to any errors or missing-information. This would create a smoother experience for employees, who often must go back and forth to provide data they didn't know was missing while waiting several days to learn if their claim was approved or denied.

Claims denial is a painful experience for both employees and benefits teams, and your benefits team members may have to spend time educating employees on how to navigate the process more effectively while providing context on a specific claims decision.

Adding AI tools therefore addresses many points of potential value-it frees time from both employees and benefits teams, it provides comprehensive data about the most common sticking points for employees, and it dramatically improves employee experience with an important aspect of their benefits. Also, more claims being approved more quickly translates to more funds returning to employee pockets.

All of these factors play a large role in determining benefits outcomes.

4. Analyze current and model potential plan designs with AI

One of your benefits team's most important duties is to choose and design plans that best support your employee population. This involves large-scale data analysis and modeling practices-activities that AI performs very well.

With the right AI tool, your team can analyze your current offerings as well as model any potential plan changes. You can gauge the performance of these plans according to several metrics across multiple employee demographics, spotting important issues like performance gaps, employee preferences, and affordability inequities.

Using AI tools in this way saves a massive amount of time for benefits teams, while highlighting how your organization can make more efficient use of your budget. And better-designed plans often mean greater affordability for employes, which could lead to better benefits outcomes, higher morale, and a higher retention rate across the company.

Making the final call

When it comes to implementing AI, your benefits team can start almost anywhere. But by evaluating your own organizational priorities and the likely outcomes of an AI solution, you can feel confident that you've chosen a starting point that will yield the kind of results you prize most.

Of course, actually implementing AI requires a lot of cross-team collaboration and organizational change management. Be sure to tune in on November 12 to our next episode of Benefits Innovation Lab to learn how to form and run an AI committee that will turn your ideas into reality.

P.S. Looking for an example of a benefits-focused AI chatbot? Check out HSAnswers from HealthEquity!

Public link

Please use the above public link if you want to share this noodl on another website.