Why the future of employee benefits will depend on better data, smarter funding and human strategy
By: Jennifer Schaefer, MBA, ChFC, CLU, RHU, REBC, SHRM-SCP
Founder & CEO, JS Benefits Group | Forbes Business Council Contributor |
Co-Host, Executive Leaders Radio
Employee benefits are entering a period of significant change.
For years, employers could approach benefits administration primarily as an annual process: negotiate the health insurance renewal, update the plan, conduct open enrollment and move on.
That model is becoming increasingly difficult to sustain.
Healthcare costs continue to pressure employers. Employees expect easier digital experiences. HR teams are being asked to accomplish more with fewer resources. And advances in data, automation and artificial intelligence are beginning to reshape how benefits are administered and managed.
But technology alone will not solve these challenges.
The employers that benefit most from the next generation of benefits management will be the ones that combine better technology, better data and better strategic decision-making.
That is where the future of employee benefits is heading.
Benefits Administration Is Becoming a Technology Problem
Managing employee benefits involves an enormous amount of information.
Eligibility.
Employee elections.
Dependents.
Plan designs.
Carrier information.
Payroll deductions.
Effective dates.
Enrollment changes.
Compliance requirements.
For years, much of that work has depended on manual processes, spreadsheets, email and disconnected systems.
That creates friction for everyone involved.
HR spends time correcting administrative issues instead of focusing on higher-value workforce initiatives.
Employees struggle to understand their options.
Brokers spend time entering and validating information.
Payroll teams have to reconcile deductions.
And leadership receives less timely visibility into what is happening inside the benefits program.
Modern technology can change that.
A well-designed benefits technology strategy can connect enrollment, administration, HR systems and employee communication while reducing unnecessary administrative work.
But the objective shouldn’t simply be automation.
The objective should be better decisions and a better employee experience.
More Data Does Not Automatically Mean Better Decisions
One of the biggest changes in benefits is the growing amount of data available to employers.
Claims data can reveal healthcare utilization.
Enrollment data can show how employees are using plans.
Pharmacy data can identify significant cost drivers.
Demographic information can help employers understand their workforce.
Technology can make that information easier to access.
But there is a danger in assuming that more data automatically creates better strategy.
It doesn’t.
Data is only valuable when an organization knows what question it is trying to answer.
A benefits dashboard can tell a CFO that healthcare spending increased.
It may not tell the CFO what should be done about it.
That requires analysis.
It requires context.
And it requires people who understand how the pieces fit together.
The future of benefits isn’t simply about collecting more information.
It is about turning information into better decisions.
Healthcare Funding Is Part of the Technology Conversation
Technology is also changing the way employers can evaluate healthcare funding.
For many organizations, the traditional choice has been relatively straightforward: purchase a fully insured plan, receive a renewal and determine how much of the increase the company and employees will absorb.
But employers have more options.
For eligible organizations, level-funded health plans can provide an alternative to traditional fully insured coverage, combining elements of fixed monthly payments, claims funding and stop-loss protection.
The important point isn’t that every employer should move to level funding.
It is that employers should have enough information to evaluate whether their current funding structure still makes sense.
That requires data.
It requires financial analysis.
And it requires an understanding of risk.
Technology can make those evaluations easier, but it doesn’t make the decision for the employer.
AI Will Change Benefits Administration—But It Won’t Replace Judgment
Artificial intelligence is already beginning to influence insurance and benefits technology.
AI can help organize information, automate repetitive processes, identify patterns and improve access to information.
Those capabilities have significant potential.
But benefits administration is not simply a data-entry exercise.
There are real people behind the data.
There are employees with complicated healthcare needs.
There are employers balancing affordability and financial sustainability.
There are compliance requirements.
There are carrier rules.
And there are business decisions that cannot be reduced to an algorithm.
The most effective use of AI will not necessarily be replacing people.
It will be removing low-value administrative work so experienced professionals can spend more time on high-value decisions.
That distinction matters.
The Human Advisor Still Has a Role
As technology becomes more sophisticated, some may assume that the traditional benefits advisor will become less important.
I believe the opposite can happen.
The role simply has to evolve.
If technology can automate enrollment, generate reports and handle routine administrative tasks, the advisor has an opportunity to spend more time helping employers interpret what the information means.
That means asking better questions.
Why are healthcare costs increasing?
What is happening with utilization?
Is the current plan design still appropriate?
Are employees receiving meaningful value?
Would an alternative funding strategy make sense?
Are technology investments actually improving the employee experience?
Those are strategic questions.
They require judgment.
And they require an understanding of the employer’s business.
The Employee Experience Is Becoming Digital
Employees increasingly expect the same level of digital convenience from their benefits that they receive from other parts of their lives.
They want information available when they need it.
They want to be able to enroll without navigating complicated paperwork.
They want to understand what their benefits cover.
They want easy access from a phone or computer.
And when they have a problem, they want help quickly.
That doesn’t mean every benefits experience should be completely automated.
Healthcare is personal.
An employee dealing with a serious medical issue may need a person to help navigate a complicated situation.
The best technology doesn’t eliminate human support.
It makes human support more accessible when it matters.
Employers Should Stop Buying Technology Without a Strategy
One of the mistakes employers can make is buying technology simply because it is new.
A platform can have impressive features and still fail to solve the organization’s actual problems.
Before investing in a new benefits technology solution, leadership should ask:
What problem are we trying to solve?
What process is creating the most friction?
What information do we need?
What should employees be able to do themselves?
What should HR be able to see?
What should leadership be able to measure?
Those questions should come before selecting the technology.
The best technology is not necessarily the platform with the longest list of features.
It is the platform that solves the right problems.
Integration May Become More Important Than Features
The future of benefits technology will also depend heavily on integration.
Benefits shouldn’t exist in a silo.
Enrollment connects to payroll.
Payroll connects to HR.
HR connects to workforce management.
Benefits data connects to financial planning.
Healthcare data connects to cost management.
When those systems operate independently, organizations create unnecessary work and opportunities for error.
When they communicate effectively, employers can create a more complete view of their workforce and benefits program.
That can improve both efficiency and decision-making.
Healthcare Cost Management Will Become More Data-Driven
Healthcare will remain one of the biggest challenges for employers.
The difference is that employers increasingly have tools to understand what is happening beneath the surface.
Instead of simply asking why the renewal increased, leadership can examine utilization.
Instead of simply accepting a pharmacy increase, employers can examine the drivers.
Instead of automatically increasing employee contributions, leadership can evaluate plan design and funding alternatives.
Instead of waiting until renewal season, employers can monitor performance throughout the year.
Technology makes this possible.
But strategy determines what the employer actually does with the information.
The Next Generation of Benefits Leaders Will Connect the Dots
The benefits professional of the future will need to understand more than insurance.
They will need to understand technology.
Data.
Healthcare economics.
Employee experience.
Compliance.
Workforce strategy.
And business finance.
That doesn’t mean every benefits professional needs to become a software engineer or data scientist.
It means the industry needs professionals who can translate complex information into practical business decisions.
That is where the greatest opportunity exists.
The Real Transformation Is Strategic
The biggest transformation happening in employee benefits isn’t the technology itself.
It is the shift in how employers think about benefits.
Benefits are no longer simply a collection of insurance products.
They are part of the employee experience.
They are a significant business expense.
They generate valuable data.
They influence recruiting and retention.
And they can affect the organization’s financial performance.
Technology can make benefits easier to administer.
Data can make them easier to understand.
AI can automate portions of the work.
But strategy determines whether all three create meaningful value.
The Future of Benefits Will Require Both Technology and Judgment
The employers that thrive in the next generation of benefits management won’t necessarily be the ones with the most technology.
They will be the ones that know how to use technology intelligently.
They will understand their data.
They will challenge assumptions.
They will evaluate healthcare funding options.
They will improve the employee experience.
They will automate administrative work where it makes sense.
And they will continue to rely on experienced professionals when the decisions become complicated.
The future of employee benefits isn’t technology versus people.
It is technology helping people make better decisions.
That is where the real opportunity lies.
About the Author
Jennifer Schaefer, MBA, ChFC, CLU, RHU, REBC, SHRM-SCP is the Founder and CEO of JS Benefits Group, an employee benefits consulting firm that helps employers develop competitive benefits programs, manage healthcare costs and make informed decisions about their workforce.
Jennifer works with employers on employee benefits strategy, health plan design, healthcare cost management, cost containment, employee retention, benefits technology and compliance. She is a Forbes Business Council Contributor and Co-Host of Executive Leaders Radio, where she discusses employee benefits, leadership, workplace trends and the future of work.
