How AI is fixing the benefit literacy gap

• Key Insight: Learn how AI personalizes benefits selection, shifting administration toward anticipatory guidance.
• Expert Quote: AI contextualizes overwhelming information and matches benefits to needs, says Kimberly Dunwoody, Businessolver.
• Supporting Data: 79% of employees felt confident in decisions when supported by AI.
  Source: Bullets generated by AI with editorial review

AI is turning the traditionally complex, overwhelming process of selecting benefits into a more personalized and easy-to-understand experience.

Eighty-five percent of employees say they feel confused about their benefits, according to a recent survey by Businessolver. However, when supported by AI, their assurance rises significantly: 79% of employees report feeling confident in their decisions, 85% rate their enrollment experience as great or excellent, and 77% say the process helped them understand their benefits very or extremely well. These findings suggest that, for leaders, investing in AI is becoming a critical part of effective benefits administration.

"For many employees, the benefits process feels broken," says Kimberly Dunwoody, a VP at Businessolver and a behavior scientist. "AI is keeping that process as simple as possible and giving employees the exact information they need in the moment and in the format they need it." 

Read more: The fall of personalization and rise of anticipatory benefits

Benefits selection can be a stressful and emotionally charged process for employees, especially as they continue to demand a more anticipatory and personalized experience. People don't just want to know what benefits are available anymore, Dunwoody says, they want to know how those benefits fit or work for them and their hyper-specific circumstances. For example, an employee or their dependents who participate in high-risk sports may benefit from accident insurance, while those planning to have a child might consider hospital indemnity coverage.

In addition, AI can be trained to set up reminders and flag areas of conflict or concern based on an employee's particular benefits, whether it's nudging them to submit a claim, prompting them to spend what's left in their FSA by the end of the year, or asking them about their student loan payments and whether they're on track. 

"AI is really able to put everything together in a way that would otherwise be too overwhelming for us as human beings," Dunwoody says. "It's so good at contextualizing these huge swaths of information and then matching them up like a puzzle piece to the benefits available."

The time to innovate is now

Despite the successful outcomes, only 34% of executives say they plan to evaluate their benefits technology in the next three years, according to the survey's findings, and 36% say they "don't know" when they plan to evaluate. This is the wrong approach, Dunwoody says. Instead, she suggests leaders begin analyzing the specific needs of the employee population as soon as possible — such as whether they need support for back pain, family planning, or preventive care. Their feedback can be used to discern whether corresponding benefits are being utilized appropriately and where an AI platform could provide better support. 

Read more: Ready for complex open enrollment questions? AI agents can help

"By not overwhelming employees, you can ensure that more of their needs will be met," Dunwoody says. "When they understand how benefits work, we're able to reduce their confusion and really up their confidence."

Although progressive technology can be a resource, it's important for leaders to also keep its limitations in mind and work within them. 

"People talk about AI like it's this magic black box you can throw everything into and it'll make sense of it," Dunwoody says. "That's not true, but it will continue to be able to anticipate and remove friction."