Second only to compensation, health insurance is one of the most important benefits employers offer. Yet with rising health care costs and an increasing number of options to choose from, whether employees understand their benefits plan - or not - continues to be a challenge for employers and HR pros alike.
Consider this: only 40% of United States consumers are confident in their ability to choose the best health care plan.
This tells us one thing for sure – employees need help selecting health plan options. In response to this challenge, benefits administrators are pursuing new ways to control costs and help employees navigate their health care choices. One of them being artificial intelligence.
First Things First: Educate Employees the Old Fashioned Way
In addition to a ben admin partner, employers need to take an active role in helping their employees better understand and maximize their healthcare benefits. It's important to keep in mind that many employees don't fully understand the financial responsibility involved with health plans -- for example, co-pays and deductibles -- both of which have seen significant increases in the shift to Consumer-Driven Health.
Deductibles can be a gray area, especially with HDHPs where an out-of-pocket expense can be upwards of $1,300 for an individual and $2,600 for a family. According to the Federal Reserve Board, nearly half of Americans cannot afford a $400 unplanned expense - so making sure employees are aware of these costs could encourage better savings tactics.
Now, let's discuss how artificial intelligence and healthcare benefits go hand-in-hand, and why AI should be part of your benefit administration strategy.
AI Personalizes Benefits Selection
Artificial intelligence is a type of computer science that involves figuring out how to make machines mimic smart, logical human behavior. Machine learning is a branch of AI that gets 'smarter' over time by analyzing real life data. In the benefits world, this type of technology is often used to help employees and their families understand their choices and the risks involved with each.
Artificial Intelligence and Healthcare Benefits
Technology such as artificial intelligence and machine learning has the potential to help health plan participants make better plan selections and help employers control benefit costs.
How? As opposed to grouping people by age range or health status, AI-enabled decision and education tools use historical and statistical data to analyze millions of anonymous people and/or claims data to personalize benefits selection and help employees choose a plan that makes the most sense for their lives. An AI-supported benefits platform can also consider demographic profiles and life changes such as marriage, divorce or the birth of a child, which offers further support in adding or changing plans.
Intelligent Decision Support Cuts Employer Costs
As mentioned, the cost of health care is on the rise - comprising more than 8% of total compensation. And according to a recent study, employers carry 75% of the total cost of health care benefits. Using intelligent decision support tools to manage health care plan participation and enrollment is an innovative solution that can help lower employer costs.
Firstly, the majority of a benefit specialist's time or call center expenses are dedicated to helping each employee understand their benefits. Many HR departments are tight on resources as it is, and an intelligent decision support tool can help employees identify costs and compare options without the help of HR staff - eliminating the need and cost to hire in this department.
Additionally, AI-enabled decision support guides employees to choose an optimal health plan. This can lower costs for employers overtime as there is a lesser chance of employees being over-insured - which, ultimately, helps to save on annual and long-term costs for health care premiums.
The Take Away:
In today's tight labor market, it's a top priority for employers to find the right balance of salary and benefit offerings to strengthen employee satisfaction - and proper benefits education helps ensure that no employee is over or under-insured. Using benefits technology with integrated artificial intelligence features will help employees thoughtfully consider which plan is best for their unique needs.
Take the next step and download our white paper to learn how AI and benefits administration software work hand in hand to enhance the benefit selection process.