Personalization, technology, and affordability: The future of employee benefits

Employee benefits are an essential element of employee compensation. Not only do they help attract and retain employees, but they also contribute to their productivity, overall job satisfaction, and wellbeing. Just as today’s work environment is rapidly and constantly evolving, the landscape of employee benefits is also changing beneath our collective feet. As companies identify ways to attract and retain talent, they are rethinking and expanding traditional benefit offerings to meet the expectations of their workforce. As we move into the future, there are several trends and developments that are shaping the way benefits are administered and delivered to employees. So, what does the future hold for employee benefits?

Customization and personalization

One of the trends in employee benefits is the shift towards personalized and customizable benefits packages. Employers are realizing that one-size-fits-all benefits packages are no longer meet the diverse needs of their workforce. As a result, more companies are offering a range of benefits options for employees to choose from, allowing them to tailor their benefits packages to suit their individual needs and preferences.

In today’s environment, a tailored benefits experience is not just preferred, but expected by employees. They appreciate when information and options are aligned with their personal lifestyle and preferences, pushing towards a more customized approach. Statistically, 6 in 10 employers (and 7 in 10 large employers) feel that it is somewhat or very likely that employees at their company will expect a wider variety of benefits options in the future.

For example, some companies are offering financial wellness, specialty pharma, mental health resources, and women’s health solutions to name a few. Companies are increasingly offering personalized benefits packages that allow employees to select the benefits that matter most to them and their families. Employees are putting a priority on management of mental and behavioral health issues, and it is important for employers to provide benefits solutions that address these priorities.

Simplification

To no surprise, health care and other benefits are incredibly complex. Adding a layer of customized and personalized benefits often directly conflicts with the idea of simplicity. There is a need, therefore, to meet employees where they are today and provide the support, resources, and tools needed to simplify the entire experience. This means helping them not just at the point of enrollment, but assisting them year-round with access to plan information, health solutions, provider information, advocacy, navigation and other critical ‘real-time’ support in a way that doesn’t add more burdens to an often overworked and understaffed internal benefits team.

By utilizing user-friendly platforms and tools, employees can easily navigate their health care options, make informed decisions, and efficiently manage their benefits online. Empowering employees with easy-to-use tools helps to reduce confusion and frustration, leading to a positive overall experience.

Many employees may not fully understand all of the benefits that are available to them, or how to best utilize them. By providing regular communication and educational resources, companies can help employees feel confident making decisions about their benefits, ultimately, leading to greater satisfaction and engagement. Omni channel communication is the way to go. Some employees want to receive paper material, others prefer SMS, or online microsites and some prefer websites and mobile apps. There are also employees that want to speak with someone who can help them with their benefits live and others prefer virtual chat. Participants want support how they want it and most importantly, when they need it (24/7).

As the world of health care grows more complex, and more and more point solutions pop up, participants need a one-stop, simplified shop.

Use of technology and AI

One of the most significant shifts in employee benefits is the increasing use of technology to deliver benefits and rewards. From digital wellness platforms to virtual counseling services, technology is revolutionizing the way companies offer benefits to their employees. This not only makes it easier for employees to access and use their benefits but also allows for greater customization and personalization.

The rise of data analytics in the workplace is enabling employers to better understand the wants, needs and preferences of their employees and tailor benefits packages accordingly. By analyzing data on employee usage of benefits, employers can identify trends and patterns that help them make informed decisions about which benefits to offer and how to best meet the needs of their workforce.

AI will soon have a major role in benefits administration. It will be used not just to simplify the participants’ experience, but will also facilitate more efficient and powerful client interactions with their benefits program and its administration. AI is transforming how employers communicate and engage with employees about their benefits. The use of chatbot provides 24/7/365-day support for open enrollment, new hire onboarding, and life event inquiries. Employers who can provide valuable benefits to employees through efficient technology without shifting cost will come out ahead because employees today expect a user-friendly digital format when it comes to delivery of benefits.

By leveraging decision support tools, plan comparisons, and personalized employee inputs, AI analyzes participant responses to utilization and risk tolerance questions alongside key underwriting demographics like age and gender. This personalized approach helps individuals “right-size” benefits coverage and tailors recommendations to each participant’s unique needs and preferences, simplifying the often-confusing decision-making process during enrollment periods.

Enhanced personalized guidance

Participants want to be guided and nurtured along the way. They don’t want to have to make multiple calls. They want personalized guidance, whether that’s helping to choose the right plan, assistance with finding a doctor, appealing a claim, getting a second opinion, or just simply finding out what benefits are available to them. Two primary obstacles hindering employees from making informed decisions about their benefits are difficulty in accessing information and understanding the details provided. Overcoming these barriers can be achieved by partnering with a suitable benefit administration and engagement technology provider.

Personalized guidance can take many forms, from one-on-one consultations with benefits specialists to online tools and resources that help employees assess their needs and make informed choices. By tailoring this guidance to the individual needs and preferences of each employee, companies can maximize the value that their workforce places on the benefits available to them.

In addition to helping employees make better decisions about their benefits, personalized guidance can improve employee engagement and satisfaction. When employees feel supported, they are more likely to feel motivated and be productive in their work. By helping employees navigate the complex world of benefits and make informed choices, companies can create a happier, more engaged workforce.

Affordability

As health care costs rise, employees are looking for affordable benefits that offer the best value for their money. According to Aptia’s most recent open enrollment insights, there was an average increase in annual medical contributions of 4% compared to 2023. For lower wage earners (>$30K), up to 29% of their salary was spent on medical coverage alone for family coverage. Combined, these two statistics mean that, for an employee making $30,000 per year or less, the increase in employee contributions would eat up approximately 1.2% of any annual wage increase. Thus, it might not be surprising that our decision support tool tells us that 79% of respondents have little to no confidence that they can afford to pay for any expenses not covered by their plan.

Read more: How benefits technology improves benefits literacy

Employees are spending an average of 5% of their salary on contributions towards their benefits alone, before they’ve even incurred any out of pocket medical expenses.

Through Aptia, we learned consumers are growing increasingly concerned about their ability to pay for out-of-pocket expenses. There is a critical need to drive lower income workers to decision support tools through employee engagement strategies.

Overall, the future of employee benefits administration is bright, with exciting opportunities for companies to create innovative and engaging benefits packages that attract and retain top talent. By embracing personalization, technology, non-traditional benefits, and a holistic approach to employee wellbeing, companies can build a benefits program that not only meets the needs of employees but also enhances the overall employee experience. As we move forward, companies that prioritize employee benefits administration are likely to see increased employee satisfaction, productivity, and loyalty, leading to long-term success and growth.

Employers who are able to adapt to these changing trends and offer benefits that meet the evolving needs of their workforce will be better positioned to attract and retain talent in the years to come. By investing in a comprehensive and innovative benefits program and the underlying services and technology to effectively administer and deliver it, employers can create a competitive advantage and have a more engaged and productive workforce.

Jeff Williams, US President and CEO, Aptia