AI Could Be the Answer to Reduce Employees’ Benefits Confusion

A Solution to Employee Benefits Confusion

More than half of employees often regret the choices they make during open enrollment, largely due to confusion and a lack of understanding about their benefits options. But artificial intelligence (AI) offers a promising solution, empowering employees to make smarter, more informed decisions while enhancing communication and support.

With nearly 96% of employees enrolling in benefits through digital platforms in 2024, according to an analysis by Alight, the role of technology in improving the benefits experience has never been clearer. “AI promises to transform how we deliver benefits, from personalized plan recommendations to automated support,” said Karen Frost, Vice President of Go-to-Market Strategy for Health at Alight. “AI should enhance, not replace, the high-touch guidance and empathy provided by experienced professionals.”

The Reality of Benefits Confusion

Navigating benefits can feel overwhelming for many employees. Studies reveal:

• 85% of employees don’t fully understand their benefits offerings.
• 40% of employees don’t know where to access reliable information to make the right choices.
• Younger and lower-paid employees are particularly likely to feel unsure about their decisions.

 

Don King, Head of Total Rewards at Businessolver, identifies several root causes for this confusion: complex industry jargon, communication that occurs only during open enrollment, and tools that fail to address the diverse needs of employees.

Existing solutions, such as mobile apps and benefits fairs, often fall short. “The content is frequently too complicated, and decision tools tend to recommend high-deductible, low-cost plans that might not suit employees’ needs,” explained Dan Maass, Principal at OneDigital.

AI-Powered Personalization Changes the Game

AI is transforming the benefits experience with personalized and scalable solutions. Frost emphasized that generative AI provides a foundation for creating tailored employee experiences—from onboarding to benefits usage.

Large language models (LLMs) allow employees to ask natural, conversational questions such as “What does a deductible mean?” or “Is this coverage the best option for my family?” without fear of confusion. AI can also facilitate side-by-side comparisons of plans, such as evaluating a spouse’s coverage against their own, empowering employees to make informed decisions that align with their needs.

What sets AI apart is its multilingual capability—AI-powered tools can assist employees in 15 different languages, breaking down barriers and ensuring support for a diverse, global workforce. This inclusivity ensures employees, regardless of their language preference, have access to personalized and understandable guidance.

Real-Time Support at Any Time

AI-powered virtual assistants and chatbots have revolutionized real-time support. Businessolver’s virtual assistant, Sofia, operates 24/7 and resolves 90% of issues on the same day. In fact, nearly one-third of Sofia’s interactions occur outside business hours, demonstrating the importance of always-available support.

“Sofia delivers immediate answers in clear, accessible terms,” said King. “She simplifies complex information and adapts her responses based on an employee’s tone, even asking context-relevant follow-up questions.” AI-powered decision support also significantly boosts engagement, with employees three times more likely to enroll in voluntary benefits like accident insurance or critical illness coverage.

Balancing Technology with Human Touch

Despite its transformative potential, AI is most effective when paired with the high-touch human element. Frost noted that employers must address data privacy, algorithm bias, and regulatory compliance to ensure successful implementation. “AI can simplify, personalize, and improve the benefits experience,” Frost said. “However, human guidance is crucial for delivering the empathy and nuanced understanding employees need.”

The Future of Benefits: Smarter, Inclusive, and Accessible

Generative AI is redefining the benefits journey. By offering multilingual, real-time support, personalized recommendations, and year-round guidance, AI empowers employees to make confident decisions. Organizations that integrate AI into their benefits processes will not only enhance employee satisfaction but also lead the way in building a more inclusive and efficient future.

The future of benefits is powered by AI—simpler, smarter, and tailored to everyone.