Employers are spending more on health coverage than ever in history — $8,951 per employee for single coverage and $25,572 for family coverage in 2024, according to the Kaiser Family Foundation. But many employees are not engaging meaningfully with, or even carefully selecting, these benefits. In fact, employees average only 18 minutes when selecting their benefits.
This gap signals what experts define as a benefits paradox: rising investment without a corresponding increase in satisfaction or usage.
Because benefits are offered in silos, employees often make disjointed decisions. They may over-insure in one area while neglecting others. At the same time, they may also skip essential offerings such as preventive care or financial wellness programs, which leaves both money and valuable support on the table.
Why is this happening? Employers may be overlooking where more clarity is needed. Despite employers offering generous benefits packages with good intentions, the fragmented nature of traditional benefits administration makes it difficult for employees to connect the dots.
Benefits Are Interconnected. Your Strategy Should Reflect That.
Employees rely on a single budget to help cover the cost of their needs, such as financial obligations, family responsibilities, healthcare and future planning. Every benefit is compared to the rest to see which provides more long-term value: “Should I contribute more to my HSA, or do I select the plan with the HRA?” “Should I opt for accident coverage or use that money toward paying off my student loans?”
These questions are decisions employers should consider, especially as benefits continue to increase in price. Employers often present benefits independently rather than through a cohesive, integrated experience. This leaves employees susceptible to making uninformed decisions, creating confusion.
The Cost of Fragmentation
According to a 2024 Employee Financial Wellness Report from Payroll Integrations, 73% of employees want to learn more about their benefits, and 25% say they feel uninformed. When employees lack clarity, they’re less likely to engage with the programs available to them. Education plays a crucial role in sparking that engagement by helping employees recognize the relevance of preventive care, financial planning tools, and supplemental benefits that strengthen their overall package. By connecting employees to resources in a way that emphasizes value and applicability, organizations can promote participation that improves the employee experience.
Failing to understand and engage with these valuable programs has consequences. For instance, about 65% of Americans are falling behind on their cancer screenings, despite the fact that in 2024 more than two million cancer diagnoses were reported. Helping people better understand and access preventive care services, like cancer screenings, is critical.
The Solution Isn’t More Communication. It’s Smarter Connection.
As employees continue to address rising claims by adding more point solutions, such as diabetes management, back pain care, or fertility support, it’s more difficult for employees to find and use them.
While thoughtful communication campaigns help convey the message, it’s extremely difficult to sync the right messaging to the right people at the right time. It’s practically impossible to target only the employees who could benefit without overwhelming the rest.
Instead, the platform employees use to enroll in their benefits should serve as a centralized hub, one that organizes essential resources in context. Rather than presenting a long list of options, it should highlight the most relevant guidance at the right time, whether that’s during enrollment, a major life event or planning for a financial milestone.
A connected benefits experience improves an employer’s strategy for delivering benefits by focusing on preventive care, high-value program participation and inclusive design, essentially meeting employees where they are in their health and financial journey. Financial flexibility through Health Savings Accounts and Flexible Spending Accounts helps improve financial wellness. Voluntary options, such as disability, foster added protection that helps reduce tension during difficult economic times.
Human-Centered AI Is the Missing Link
Human-centered design means creating technology that prioritizes the real behaviors and needs of the people who use it, instead of adding hurdles. Applied to HR, this design ensures employees and administrators can navigate benefits confidently and without frustration. The blend of artificial intelligence and human-centered design helps HR teams be more effective. For example, automated eligibility verification helps reduce manual work while providing personalized guidance.
This pairing also ensures sensitive data is handled responsibly and with care, which is imperative as AI technologies continue to make advancements. Equity, access and inclusion are improved through tailored benefits and communication recommendations within all employee demographics.
A connected benefits strategy should include:
- Centralized education platforms that are accessible year-round with benefits information and resources;
- Configurable communication tools that automatically provide outreach based on critical health concerns, eligibility changes or life events;
- Voluntary and financial benefits that reduce gaps, alleviate financial pressures and promote long-term wellness; and
- AI-powered features that simplify enrollment, personalize experiences and produce insights for current and future improvement.
As employers and employees attempt to manage the rising costs of healthcare insurance, employers need a solution that ensures benefits are both high quality and affordable, without trading one for the other. Designing a connected and cohesive benefits experience empowers employees to better choose, use and manage their benefits. And when employees feel supported in navigating these critical life decisions, it strengthens their trust in the company behind the experience — turning a once-confusing process into a meaningful connection between people and their employer.
As SVP of Product at PlanSource, Eddie Pinto is responsible for leading the development and execution of PlanSource’s product strategy to build and maintain the company’s leadership position within benefits administration. With more than 20 years of benefits experience, including leadership roles with benefits administration providers, Pinto is a highly accomplished product executive whose expertise spans AI, design thinking, product management, process engineering and agile transformation.
PlanSource is a benefits administration technology and services company that is on a mission to make it easier for people to choose, use and manage benefits through engaging, AI-powered experiences. Leading the market in meaningful integration of AI, PlanSource has an unmatched range of ecosystem connections that drive continual innovation and value to clients, partners and consumers.
