Artificial intelligence takes hold in benefits plans
“Generative AI allows us to … create trends and insights that were not available before
. We can use this to refine product recommendations … .”
—Michael Estep
Head of Product
Prudential Group Insurance
Benefits Products & Services
By Thomas A. McCoy, CLU
Artificial intelligence (AI) is being harnessed to serve human needs as diverse as fast-food ordering and medical diagnoses. What can it do for the employee benefits business? Can AI help workers be more confident in their voluntary benefits choices? Can it help an employer create a menu of benefits that correlates more closely with its hiring and retention goals?
If the use of AI leads to an efficient and accurate interpretation of a customer’s needs and to product recommendations tailored to best suit those needs, then the employee benefits business, like other businesses using AI, will be stronger for it. In the benefits business, the “customer” can be both the plan participant and the plan sponsor.
Jaymin Kim, senior vice president and emerging tech advisor at Marsh, told a recent Mercer webinar audience, “Generative AI is in its nascent days, and we’re already seeing extraordinary growth. The productivity and efficiency gains are remarkable. I liken it to back when the Internet was first emerging.”
Kim clarifies the difference between “traditional AI” and “generative AI”: “With traditional AI models, you tell it what to do and it does it. It doesn’t reply to you. An example would be filtering spam from your email.
“With advanced generative AI, like ChatGPT, you don’t need to give it instructions. It’s a two-way interaction between the AI and a human. You just strike up a conversation, and it will reply in a human-like way.”
Jason Averbook, senior partner, global leader, digital HR strategy for Mercer/Leapgen, added, “When you use an Internet search engine, it gives you one shot. Generative AI takes you from a search engine to a reasoning engine.”
Michael Estep, head of product, Prudential Group Insurance, says generative AI is part of his company’s long-term vision for achieving a more personalized benefits experience. Prudential has partnered with digital solutions companies to achieve AI-enabled solutions for benefits plans.
“The goal is to better understand customers and proactively offer solutions that are tailored to their needs,” Estep explains. “Generative AI allows us to ingest large populations of data to create trends and insights that were not available before. We can use this to refine product recommendations for employers and employees, as well as to help employers identify anomalies from an administration perspective.”
Estep explains how the AI-enabled process works for benefits enrollment, utilizing a self-service enrollment platform from one of its partners, digital services provider Nayya.
“Plan participants are asked questions about how they consume healthcare (including doctor visits, specialists, and dental visits) and about their financial picture. Let’s say a user has a high-deductible health plan and reports a higher-than-average amount of healthcare needs and a high level of debt. Nayya’s AI platform will recommend supplemental health as a way to offset unexpected financial burden.”
Estep notes, “Younger generations are making up a larger portion of the workforce. AI and technology tools are giving us insights about these customers that we didn’t have before. This helps us ensure that we are providing them with the right experience.
“Nayya is a powerful addition that easily provides guidance for customers who prefer to enroll using technology and a self-service model,” Estep says. However, he notes that some customers are more comfortable interacting one-on-one with a person for enrollment. Prudential offers that option through a partnership with Enrollify. Customers using the Enrollify model can discuss benefits options virtually with a licensed benefit counselor and can include a spouse in the discussion.
“In cases where a customer is making significant changes to benefits selections, having an experienced counselor available to review the changes in detail is extremely valuable,” says Estep. “It is important to have decision support options that meet all customer needs.”
Prudential will be utilizing AI expertise to handle disability claims also. It recently entered into a partnership with Evolution IQ, a tech company with an AI-driven platform that can streamline short-term and long-term disability claims handling. The AI assistance from Evolution IQ is designed to help Prudential’s claims examiners spend more time on complex claims.
Estep also says there is potential for using artificial intelligence to support wellness initiatives within benefits plans. “Whatever insights we gain from AI can be passed along to our clients as they stress a holistic wellness for their employees. Our data shows that three out of four employees want their employers to play an important role in their overall wellness.
“Currently, our product design is less dependent on AI,” Estep explains. “It is important to understand the market, the needs of people across many spectrums, medical innovations and the competitive landscape.
“While tools can be made available to process large amounts of data to provide useful insights, product design is multi-faceted and requires more input,” he adds.
“Customer focus groups are an example. Surveys are helpful, but the value of ensuring your design is balanced by consumer voice is important,” Estep asserts.
Whatever use is made of artificial intelligence in making the benefits plan decisions and other HR decisions, experts caution that it does not eliminate the need for human oversight. Jaymin Kim said in the webinar, “AI introduces possibilities of ‘re-skilling’ for those overseeing its use. There are ‘soft’ skills that only humans can provide.”
For example, Averbook pointed out, “If an employer is using generative AI to write a job description, it is not the final job description the company will wind up using, because the AI doesn’t understand the company’s culture. But it’s a start.”
“Human oversight is critical in making decisions based on the options provided by AI, but also in identifying possible erroneous AI results, sometimes called ‘negative hallucinations,’” Kim added. The errors might be the result of incorrect data fed into the AI-based solution, she said.
The introduction of artificial intelligence as a tool to improve benefits product communication is coming at a time when many workers are struggling to make their voluntary benefits choices. According to Guardian Life’s Workplace Benefits study conducted in 2022, only 20% of employees say they are very confident in their benefits decisions.
The study indicated that the average worker spends only 20 minutes reviewing non-medical benefits, and that 35% say they are overwhelmed, so they auto-enroll in the prior year’s choices.
Rachel Chamberlin, head of enrollment at Guardian, noted, “The pandemic forced employers to use technology for more communication of benefits, and that trend is continuing.”
Still, she told a recent Guardian webinar audience, “The process of shopping for benefits is lagging behind.”
Generative artificial intelligence provides a new dimension among employee benefits tech tools. Estep says, “The partnerships we have formed are designed to give our customers access to tools that allow for a tailored and personalized benefits experience.
“Making personalized recommendations allows participants to maximize value rather than being underinsured or over-insured,” he adds. “Plan sponsors need their participants to value the benefits they make available to them.”
Kim noted, “With generative AI, for the first time in history, the average retail customer is interacting with machines that are so advanced that they are believably human-like. In the decades to come, I wonder what new opportunities we can seize with this new technology as it becomes more advanced.” n
The author
Thomas A. McCoy, CLU, is an Indiana-based freelance insurance writer.
