As employer health costs continue to rise, AI can help HR leaders cut through one of their largest budget items without sacrificing personalization, care, and employee support.
By Jennifer Trzepacz
Employer health costs are projected to rise 9% next year, putting more pressure on HR leaders to control spending while maintaining high-quality care for employees. For most organizations, health benefits are not only one of the largest line items in the budget, but also one of the most visible reflections of their culture and values.
That’s why this open enrollment season feels different. Rising costs, administrative complexity, and evolving employee expectations have made it clear: Incremental tweaks won’t be enough. Employers need a smarter way to simplify benefits, personalize experiences, and control costs — all at once.
Enter AI. AI is no longer just a nice-to-have; it’s becoming an essential tool helping employers manage, deliver, and measure the impact of their benefits programs. When thoughtfully integrated, AI can reduce administrative friction, personalize the employee experience, and turn vast amounts of benefits data into actionable insights.
AI is transforming how employers manage, deliver, and measure benefits across the board. From simplifying complex plan information to improving employee engagement and optimizing plan design, AI provides actionable insights that enable organizations to make informed decisions more quickly and cost-effectively. It bridges the gap between technology and human touch, allowing HR teams to focus on strategy rather than administration while ensuring employees receive personalized and accurate support.
Here are three ways AI can help employers cut costs during open enrollment.
- Reduce administrative burdens on the HR team. HR professionals are accustomed to answering numerous questions daily, especially during open enrollment. More than 90% of HR leaders cite frequent employee questions about benefits information readily available online or in company materials. However, this can be a significant administrative burden. AI can alleviate this pressure by offering personalized responses to routine questions from employees. HIPAA-compliant AI platforms customized to an employer’s specific benefit program provide accurate information tailored for each employee. By instantly answering employees’ benefit questions and helping them to take the next step for their health, these tools enhance engagement and empower more informed decision-making.
- Personalize the benefits experience for employees. Healthcare remains one of the most costly and confusing industries for consumers. Understanding benefits, when and where to seek help, and the specific terms of a plan can often be unclear. AI plays a critical role in simplification. By automating complex processes and providing easily digestible information, AI can help empower individuals to make informed decisions about their health and care, and select plans tailored to their specific needs.
When employees receive guidance that aligns with their specific health and care needs and financial situations, they’re less likely to choose overly expensive plans or underuse valuable benefits. AI-enabled tools provide fast answers to questions and improve the overall enrollment experience. By minimizing misunderstandings about coverage or deadlines, AI helps employees feel more confident in their choices. When employees understand their benefits the first time, organizations experience fewer enrollment errors, less rework, and more consistent participation across plans. This clarity leads to better benefit selections and builds trust in the process, driving higher engagement and better utilization of the benefits employers invest in.
- Use AI to optimize benefit offerings. Data-driven insights can inform plan designs and decision-making. According to a new survey, 67% of companies are actively addressing wellness program participation and preventative care visits through enhanced benefits and cost-management strategies. AI helps employers identify which benefits truly meet employee needs by analyzing workforce demographics, utilization trends, and cost patterns from prior years. These insights allow HR teams to tailor offerings that strike a balance between value and affordability.
AI also enables more strategic forecasting, helping organizations anticipate changes in participation, costs, or workforce priorities before the next enrollment cycle. Over time, this continuous optimization results in better investments of benefit dollars and more sustainable long-term cost control.
Beyond choosing benefits, AI can help more people use their benefits to the fullest, including preventative care and medication adherence, which has been shown to reduce hospitalizations. Employers see fewer high-cost claims, less absenteeism, and higher productivity when employees proactively manage their health. These preventive measures boost well-being and result in measurable savings on healthcare premiums and overall benefits spending. In this way, AI supports a healthier workforce and a healthier bottom line.
AI is here to stay — and for HR leaders, that’s good news. It represents not just an operational upgrade, but a cultural evolution. In an era where employees expect personalization, transparency, and support, AI helps employers deliver all three while keeping costs in check.
By improving the open enrollment experience, organizations can reduce coverage gaps, increase appropriate care utilization, and build trust in their benefits programs. Personalized, AI-powered benefits move beyond a “one-size-fits-all” model to a “one-size-fits-one” approach where every employee gets guidance that reflects their unique needs.
As HR leaders look ahead, AI offers a path to balance empathy with efficiency. It enables HR teams to demonstrate innovation, responsiveness, and care at a time when the workforce needs it most.
Jennifer Trzepacz is chief people officer at Transcarent.
