The Transformative Power of AI in Employee Benefits

September 15, 2025

By Lovedeep Saini, Ph.D. and Shalin Dave

As artificial intelligence (AI) continues to evolve, there will be a massive shift in the way businesses conduct employee benefits planning and administration. AI and machine learning algorithms are able to continuously sift through huge amounts of data quicky and in real-time, enabling more automation and supporting deeper insight into employee population and claim data. Today, human resources departments are starting to test AI tools — implementing things like chatbots or smart recommendations. But these use cases only scratch the surface of what AI is and will become capable of in employee benefits.

Enhanced Data Analysis

When implemented strategically, AI can offer significant advantages for plan design and benefits administration. However, as these tools continue to evolve — and the data analysis they provide becomes more accurate — it’s important to remember that AI is a tool. It should be thought of as “augmented intelligence” — not an all-knowing machine. Its purpose is to help plan administrators make more informed decisions.

Here are a few examples of how AI will impact, streamline and optimize plan design and administration:

• Actionable Population Health Intelligence – AI will enhance employers’ ability to analyze integrated employee data to identify emerging health risk trends across their entire workforce — before they drive up claims. Self-insured employers in particular stand to gain unprecedented visibility into population health trends, which will support more strategic and cost effective plan designs.
• Targeted Claim Prevention – By providing greater visibility into population health at the individual level, AI will also support targeted interventions and personalized employee healthcare solutions that can prevent high-cost medical events. By helping to orchestrate members’ health journeys rather than simply processing claims after care is delivered, AI will drive overall plan cost savings while improving member health outcomes.
• Plan Utilization and Optimization – Richer data through AI supports plan administrators’ ability to track utilization of wellness and other programs in real time — and make more informed decisions about program improvements or communication strategies. And with future AI advancements, benefits packages could automatically adjust features, networks and incentives in real time based on utilization, costs and health outcomes — without waiting for annual renewals.
• Reference-Based Pricing Healthcare Models – AI is starting to show up in reference-based pricing strategies (also known as indexed reimbursement strategies) to help analyze market data such as index cost fluctuations in real-time. As this use case continues to evolve, it will support more dynamic price adjustments and help lay the groundwork for negotiations and plan customization.

For employees, the advantages of deeper, more dynamic data through AI will translate to simpler, more supportive everyday experiences — from quicker and more robust answers from AI chatbots, to timely reminders for health checkups, to personalized guidance on which benefits fit their needs best.

The Keys: You Need Good Data and Human Touch

Getting the most out of AI requires access to comprehensive, accurate employee health data — ideally integrated data that encompasses medical claims, pharmacy utilization, biometric data, workplace analytics and behavioral indicators. For this reason, AI’s ability to influence plan administration and design is fully maximized when companies are in a captive or self-funded model, where they have direct access to the detailed data required to train algorithms and uncover patterns down to the individual member level.

That doesn’t mean fully insured employers can’t benefit from applications focused on employee engagement, such as benefits navigation, member enrollment, communications and population health insights. For example, generative AI tools can be designed to answer basic benefits questions or help members with the enrollment process.

Regardless of funding structure, successful AI deployment and implementation require human oversight. AI is a tool designed to augment human expertise in benefits strategy, not replace it. Employers must work with benefits advisors who understand strategic plan design, AI capabilities and regulatory requirements to ensure responsible implementation that protects employee privacy while maximizing business outcomes.

The Conner Strong & Buckelew Advantage

As AI transforms employee benefits employers need strategic partners who understand its opportunities and challenges. Conner Strong & Buckelew is already helping clients build strong data foundations and governance that will prepare them for the next generation of AI supported benefits programs. Our in-house benefits experts and dedicated AI analytics team monitor AI trends, advise on regulatory and privacy issues and work with employers to chart a path for AI-driven benefits strategies.

If your organization is ready to explore how the strategic use of AI can support plan design, cost containment and improved health outcomes, reach out to a member of our team today.