YOUR BENEFITS COULD USE A DASH OF AI: RETHINK THE PEO EMPLOYEE BENEFITS EXPERIENCE

I noticed it was broken within months of starting at McKinsey. My family was growing, and we had twins on the way. But navigating healthcare in the U.S. felt like a roller coaster — one where you get strapped in and those metal clamps keep you locked down until the ride has turned you inside out.

Whenever I had a question about health benefits, I’d get sent to a call center. Then I’d ask HR for help, and they’d refer me to a different resource. I tried digging up information on my own, but never got the clear, personalized answer I needed. It was all so complicated that we decided to have our twins outside the U.S., then fly back afterward.

If this confusion and frustration sound familiar, you’re not alone.

The facts are sobering: 53% of employees regret their most recent open enrollment choices, according to an Equitable study. And a recent Aflac survey found employees who understood their benefits were much less likely to think they overpaid for health insurance than those who didn’t. That’s a wake-up call for PEOs managing benefits for hundreds of SMB clients: benefits decisions affect client satisfaction, retention, and your bottom line.

It’s 2025. AI has come, and it’s here to stay. Health benefits should be easy, accessible, and affordable. It should be enabled by the best technologies we have at our disposal.

The good news? AI is becoming fully integrated into every aspect of PEO operations, and its capabilities are continually expanding. It has already transformed HR functions by increasing efficiency and enabling more effective people decisions.

One thing is clear: when a client knows their PEO partner is powered by an AI-enhanced HR tech stack, you can improve client experiences across the board with enhanced ROI on benefits spend, reduced claims waste, year-round benefits utilization, and a smarter benefits engagement. Think: more satisfying benefit choices, lower benefit costs, and improved employee benefits experiences.

HOW AI CHANGES LIVES

Before we talk AI and technology, let me share one of the countless stories I’ve heard from my clients that show why it matters that PEOs offer AI-enabled employee healthcare.

An employee needed an MRI scan. They had an appointment scheduled with a facility they’d used before. But they decided to check their benefits app quickly before going.

With AI-powered cost transparency personalized to their plan and deductible status, they found another nearby facility that charged over a hundred dollars less. Same quality care, significant savings. All discovered in seconds, not hours on the phone.

WHY AI HAS BECOME ESSENTIAL FOR MODERN PEOS

Look, PEOs have massive pain points when it comes to benefits rollout and year-long administration. That’s why implementing high-impact, cost-saving measures like AI-powered benefits solutions can mitigate the economic forces threatening the modern PEO business model.

Consider open enrollment season. Depending on the size of the PEO, open enrollment may equate to multichannel communications campaigns for hundreds of thousands of employees at once. This means thousands of queries handled by call centers (which need staffing up during fall enrollment periods), where AI could help.

AI can digest a user’s plan-specific information and give personalized answers much faster than waiting on hold. This allows PEOs to optimize call center operations and let their human specialists focus on the truly complex cases.

But the challenge extends beyond enrollment. PEOs manage and fund benefits across a massive book of business, but often lack the communication channels and benefits marketing strategy to engage employees year-round. AI-powered platforms can proactively prompt preventive care opportunities and surface ancillary benefits in a centralized platform. No more splintered point solution ecosystem.

24/7 DIGITAL BENEFITS GUIDANCE IS HERE

Remember those long hold times? Those confusing benefits booklets? They’re becoming relics of the past.

AI-powered decision support tools help employees determine which benefit options are best suited to their budget and coverage preferences. By analyzing employee data such as claims history, demographics, preferred providers, and anticipated medical procedures, these tools help employees evaluate their options and make more informed decisions.

We’re fundamentally shifting how employees engage with benefits, transforming them from confused healthcare consumers to well-informed decision-makers.

The impact on operational efficiency is game-changing. AI streamlines HR workflows by automating routine administrative tasks. From claims processing to benefits enrollment, AI-powered platforms reduce manual errors, cut down processing times, and free up HR teams to focus on strategic initiatives.

During open enrollment (that annual headache we all know too well), AI tools can facilitate proactive and frequent communication by delivering personalized reminders that are timely and relevant to each employee’s needs.

FROM CONCEPT TO REALITY IN WEEKS

Now, I know what you’re thinking: “This sounds great, Guy, but how long does it actually take to implement something like this?”

From my experience working with major PEOs in the benefits space, implementation timelines vary based on size. But here’s what’s remarkable: after initial setup, each new organization in your client base can typically onboard into an AI-powered platform within 8 weeks, with many experiencing faster times.

The key? AI actually speeds up the onboarding and launch process. Instead of manually configuring thousands of plan variations, AI can ingest and structure plan documents automatically. What used to take months now takes weeks.

MAKING AI WORK WITH EXISTING PEO SYSTEMS

One critical consideration for PEOs is how AI benefits navigation integrates with existing platforms. The good news is that modern AI platforms now plug into existing payroll and HRIS systems with minimal IT lift.

Whether you’re using legacy payroll systems or modern cloud-based platforms, AI benefits navigation can typically integrate through:

• Real-time eligibility file syncing
• Automated plan document ingestion
• Single sign-on capabilities for employees
• Unified reporting dashboards

This integration means employees experience one cohesive platform rather than yet another login to remember. For PEOs, it means maintaining your existing workflows while adding powerful new capabilities.

THE HUMAN TOUCH: AI AS AN ENABLER, NOT A REPLACEMENT

One concern I hear from PEO executives: “Won’t AI make our services feel less personal?”

I’ll be direct. AI is the avenue toward more elevated human touches. When AI handles routine benefits queries, it frees up benefits experts and call center staff to handle the truly complex cases that require a delicate touch.

But let’s also remember that employees often want quick answers, anytime, anywhere. Call centers operating during strict business hours can’t always deliver that. AI can.

More importantly, we’re not talking about those frustrating robocall decision trees you get from your credit card company. Personalized AI in the benefits space is conversational, personal, and empowering. It’s built on dynamic generative AI engines that understand context and nuance.

This creates the best of both worlds: PEOs retain the personal touch that defines their competitive edge while optimizing operations and realizing financial savings.

WHAT REALLY MATTERS WHEN SELECTING AN AI PARTNER

When evaluating AI benefits navigation solutions, start by finding a vendor who goes beyond solution delivery and acts as a true partner. If you’re giving AI to your employees, you need to trust the hands behind the wheel.

Critical requirements include:

• SOC 2 Type II certification
• HIPAA and HITRUST compliance
• PHI encryption at rest and in transit
• Proven scalability as your business grows

Remember: When dealing with benefits, PEOs step into their role as a co-plan sponsor with their clients. You’re sharing fiduciary responsibility for plan management. You must entrust plan designs, open enrollment, and benefits experiences to a partner who can deliver on security while scaling with you.

FUTURE-PROOFING YOUR BENEFITS STRATEGY

As AI continues to evolve, PEOs need to think beyond immediate implementation. Consider these factors when selecting an AI partner.

Regulatory Readiness: Healthcare regulations change constantly. Your AI solution should have built-in compliance updates and the ability to adapt to new requirements without major overhauls.

Scalable Architecture: As your client base grows or shrinks, can the AI solution scale accordingly? Look for usage-based pricing models that align with your business reality.

Data Portability: Ensure you maintain ownership of your data and can export it if needed. This protects your long-term interests and maintains flexibility.

Continuous Learning: The best AI solutions improve over time. Look for partners who regularly update their models based on user interactions and emerging best practices.

YOUR NEXT STEPS AS A PEO LEADER

For PEOs ready to move forward with AI benefits navigation, here are your immediate action items:

Assess Your Current State: Calculate your cost per benefits inquiry and average resolution time. This gives you a baseline for measuring AI impact.

Start Small: Consider piloting AI with a subset of clients who are early adopters. Use their success stories to drive broader adoption.

Set Clear Expectations: Communicate that AI enhances rather than replaces your human touch. Lead with the employee benefits, not the technology.

Measure and Iterate: Track key metrics from day one. Use data to refine your approach and demonstrate value to stakeholders.

Think Partnership, Not Vendor: Choose an AI provider who understands the PEO business model and can grow with you.

The path forward is clear. Organizations that embrace AI in benefits management will see reduced costs, improved employee satisfaction, and better health outcomes. The technology exists today. The question is not whether to adopt AI, but how quickly you can implement it to gain a competitive advantage.

Healthy employees are a strategic asset for a company. If employees are healthy, the company will be healthier, society will be healthier. And AI-powered benefits navigation is one of the most powerful tools we have to make that vision reality.

Partnering with a PEO skilled in AI implementation can help you deliver these solutions effectively, ensuring your clients’ employees experience a seamless benefits journey all year long.

Together, we can unlock more affordable healthcare options, elevate the well-being of ourselves and our families, and save significantly on our healthcare costs.

AI is not a future solution, it’s the differentiator you need now. PEOs that embrace AI today will improve margins, client satisfaction, and employee wellbeing tomorrow. Will you be the PEO that delivers this AI impact?