The Future of Benefits: What to Expect in 2026 and Beyond  

The first is the accelerated pace of technology innovation, particularly driven by advances in AI-powered capabilities that improve operational efficiency. For example, AI is enabling the automation of repetitive, manual tasks such as digitizing data from plan forms to streamline renewal workflows, summarizing and drafting communications, and delivering actionable insights that support stronger servicing.

Second, these technology advancements are driving a necessary shift in agencies toward a more advisory-focused role. The benefits space is complex and continues to evolve. Costs for employers keep rising, while employee expectations around benefits offerings continue to increase as well, adding further pressure. As a result, employers are looking for trusted guidance to help them navigate these dynamics, and they’re turning to agencies that can provide strategic advice and help them make the best possible decisions.

What are some common challenges agencies might face as they adapt to future Benefits trends, and how can they overcome them?

Tammi: One of the biggest challenges we see is that critical knowledge and data often live across disparate systems and legacy tools. This fragmentation not only limits an agency’s ability to scale but also makes it harder to operate as an effective advisor – information is scattered, and a significant amount of manual work is required. While agencies want to shift toward more advisory roles, they’re not always set up to do so efficiently.

There’s also a secondary challenge tied to workforce demographics. As the industry’s workforce ages, agencies need to attract new talent. Reliance on legacy systems increases the risk of losing tribal knowledge during workforce transitions and can make it harder to appeal to tech-forward professionals.

So how do agencies get ahead? It starts with developing a thoughtful technology roadmap, one that establishes a more efficient foundation. This should be paired with a comprehensive change management plan to ensure a smooth transition and maximize adoption across the agency.

What opportunities will independent agencies have to differentiate themselves as trusted advisors in this evolving Benefits environment?

Tammi: A couple of opportunities stand out. The first is freeing up time – enabled by technology – to truly serve as a trusted advisor. With better data, supported by a purpose-built platform, agencies can deliver deeper insights that help clients design more effective benefits plans. Imagine having answers to critical questions like: What benefits are competitors offering to attract and retain top talent? Which offerings matter most to a client's key employees? And how might alternative healthcare plans impact both coverage and costs? Helping clients navigate these questions, backing recommendations with data, and clearly demonstrating the value of that guidance is what will drive loyalty and long-term growth.

Second, agencies can differentiate by offering value-added services. For example, many agencies have repeatable expertise around annual enrollment and compliance management. By taking on these highly specialized and cyclical tasks, agencies can free up time for their clients while also creating opportunities for new revenue streams.

What key changes do you predict will shape the employee benefits landscape in the next three years, and why should agencies be paying attention now?

Tammi: I expect many of the trends we’ve seen in recent years to continue. Benefits costs will keep rising, alternative plans will gain further traction, and employee expectations will continue to increase. While market cycles such as shifts between employee- and employer-driven labor markets may influence short-term leverage, the overall trajectory is unlikely to change.

This means agencies need to make the right investments now to succeed in the future. Employers will continue to face growing financial and labor-driven pressures, and in response, they’ll increasingly rely on agencies that can provide strong advice and help them adapt to an evolving market. To compete effectively, agencies must continue to elevate their advisory role and use technology to “outsource” manual, repetitive work. Industry research shows that more employers are considering switching agencies to better control costs and get stronger guidance, making technology essential not just for growth, but also for client retention.

What advice would you give to agency leaders looking to position themselves as forward-thinking advisors in this space?

Tammi: My advice is for agency leaders to ask themselves how technology can enable their future success, and then take steps now to get there. Investing in new technology isn’t always easy. There are short-term costs tied to implementation and change management, which may require unwinding years of established processes. Questions around compliance and security are critical and can introduce some near-term friction. That said, it’s important to stay focused on the ideal end state. Making the right short-term investments will position agencies to thrive in the long term.

How will advancements in technology, such as AI and automation, impact the way benefits are designed, offered, and managed by employers?

Tammi: The impact of AI and automation extends beyond agencies to employers. Annual enrollment is a great example. AI can convert plan documents into digital experiences, streamlining the enrollment process. Automation and system integrations can seamlessly move data from agency management systems into enrollment platforms. AI can also provide intelligent, personalized recommendations based on factors like cost, demographics, and peer elections to guide employees through enrollment in a more personalized way.

A streamlined enrollment experience leads to better reporting, improved visibility into benefits data, and a stronger overall experience for employees. As benefits continue to play a critical role in attracting and retaining top talent, intelligently offering the right benefits to the right employees is increasingly essential.

How is Applied paving the way for independent agencies to succeed in this transformation?

Tammi: At Applied, we’re focused on delivering technology that helps agencies scale with confidence, with a strong emphasis on efficiency and automation. This focus can be summarized through a few core themes.

First, we provide a platform purpose-built for the benefits industry and optimized across what we refer to as the “digital roundtrip of insurance.” This means capturing the right data, surfacing meaningful insights, and automating workflows so that everyone working on behalf of a benefits client – whether a producer, service professional, accountant, or team leader – can operate from a centralized, shared platform.

Second, we’re deeply invested in using AI and automation to streamline the most impactful workflows, delivering these capabilities out of the box. For example, AutoFill enables plan documents to be converted to digital data in a few minutes rather than nearly an hour of manual entry. That same data can then power automated quoting and enrollment workflows through Applied Benefits Designer™ and our integration with Employee Navigator®. On the finance side, Applied Recon™ streamlines commission reconciliation by extracting data from commission statements and mapping it directly to plans in Applied Epic®. And later this year, Epic Max will further enhance servicing with embedded AI-powered search, summaries, and intelligent agents throughout the digital roundtrip.

Finally, we deliver all of this within a single system that supports both P&C and benefits, with purpose-built experiences for each line of business. This gives agencies a holistic view of their customers and their entire book of business, supports better servicing and cross-sell opportunities, simplifies the technology stack, and enables more streamlined workflows from front to back office.

And beyond the technology, we have a team of benefits experts dedicated to helping agencies successfully adopt, optimize, and maximize the value of their transformation.

Check out more of our Benefits resources to keep up with more Benefits updates and learn how Applied Systems is your partner for the future.