The US employee benefits consulting industry is under pressure from every direction - spiraling healthcare costs, an increasingly complex plan landscape, and the looming threat of AI-native competitors. For Bill Carew and Emily Bailey of OneDigital, the answer is not to resist that pressure but to lean into it.
Carew, president of OneDigital who co-founded an independent benefits agency in Connecticut in the 1990s before selling it to OneDigital in 2013, and Bailey, Regional President for the firm’s East Region, overseeing employee benefits, risk, and human resources consulting practices - spoke with Insurance Business Benefits US about where the industry stands and where it must go.
Their conversation covered rising cost complexity, the strategic role of AI, industry consolidation, and what the next generation of benefits brokers and advisors will need to thrive.
Bailey, who has spent just over 20 years in employee benefits after starting as a college intern, pointed to complexity as the most consequential shift of her career.
"As the industry has gotten more and more costly and costs have spiraled out of control, the complexity has also increased as we've shifted more risk onto the backs of employees and the consumer," she said. "That has really created the advent of very complicated benefit plan designs, so complicated that consumers have a hard time understanding what they're buying."
That complexity extends to the proliferating menu of plan structures and funding vehicles now available to employers including individual coverage health reimbursement arrangements (ICHRAs), health reimbursement arrangements (HRAs), health savings accounts (HSAs), narrow network options, and self-insured arrangements.
As the range of employer-sponsored plan designs continues to expand, the consultant's role has shifted from product placement to year-round education and advocacy.
"No longer is our job centered around one period of time, which is purchasing and open enrollment," Bailey said. "It's a 12-month job, and it really becomes so much more imperative that we focus around communication and engagement throughout the year, making sure that we meet folks where they are when they need it."
Carew agreed that cost pressure is nothing new but has intensified in ways that demand advisors stay ahead of the curve and sometimes anticipate solutions not yet in the market.
"Being somebody whose role is to advise and lead clients to the most cost-effective programs possible, it's put a lot of pressure on our industry and our teams to make sure that we stay ahead of the curve," he said. "Sometimes that is getting out in front, looking around the corner on things that quite aren't even here yet."
Carew drew a direct comparison between the evolution of medicine and the direction of benefits consulting.
"In the same way that we are in an era of personalized medicine, we're in an era of personalized medical management and cost control," he said. "The answers to any organization's cost management strategy are highly personalized based on their population, the risks in their population, the demographics, the local healthcare economy dynamics, the insurance marketplace."
OneDigital has invested in AI-native analytical tools designed to process population-specific data at scale and deliver customized plan recommendations.
Carew identified the administrative middle layer as the most productive target for AI efficiency gains - freeing consultants to focus on strategic financial analysis at one end and direct human support at the other.
"We just need to take all of that computing power and point it at the biggest problems our clients have, which are invariably going to be around cost," he said. "And then how do we connect with and support the individuals that are using the system?"
Bailey offered an important caution. "I would caution us to not lose sight of the subject matter expertise that comes from 30 years of being in this business - the ability to interpret very slight nuances and differences in language or even emotion in an interaction," she said. "That's very important, and we can't lose sight of that strategic expertise we have built over the course of time."
That human dimension is most visible in OneDigital's advocacy teams, whose role is to guide employees through the healthcare system in moments of crisis.
"What you can't automate at the end is a human being to talk someone through a situation where they just had a life-altering diagnosis," Carew said. "That's the human-to-human that Emily's talking about."
On the impact of the consolidation that continues to reshape the US group benefits brokerage market, Carew was less concerned about competitive erosion than about what consolidation leaves behind.
"I worry a little bit more about succession and the years of experience it takes to understand how markets work, how to lead clients, how to connect with individuals and families," he said. "More importantly, it probably takes mentorship. Younger people who are new to the industry having the opportunity to work side by side with people that have been around the block before is really important."
He flagged the remote-work era as a specific setback in that regard. "Many of these younger people are missing out on those opportunities to learn side by side," he said. "As experienced people in the industry, we need to make sure we're taking the time and investing in that younger generation to give them the tools, skills, and experiences they need."
Bailey reframed the talent shortage as an opportunity for growing firms. "I think of it as opportunity," she said. "For firms like ours who are bringing on teams and talent, we are continuously looking for new talent and creating career pathing. We're looking for young people who want to come into this business, learn alongside a mentor, and really be able to step in and fill those shoes."
For smaller agencies considering acquisition, Carew offered a clear two-part test: whether the move will bring better resources to clients, and whether it will create career growth opportunities for the individuals involved.
He pointed to Bailey's own trajectory from college hire at his Connecticut agency to regional leader at OneDigital as evidence that joining a larger platform delivers on both counts. Carew also noted that as client demands grow exponentially, smaller agencies eventually need the financial foundation to invest in leading-edge capabilities.
When asked about how AI may disrupt the brokerage model as tech startups push heavily into the industry, the two OneDigital leaders are clear.
"The biggest threat on the surface is AI-native platforms that can come in without the legacy of systems in the insurance marketplace," Carew said. But he immediately identified that same dynamic as a competitive moat. "We've got 100,000 corporate clients, millions of people that we insure. That means we have relationships with the insurance carriers that we serve as distribution for - and that's hard. You need that critical mass as well as the experience and understanding to compete."
Carew added that new entrants are more likely to target specific corners of the market than to challenge established firms across the full breadth of group benefits. “What we’re likely to see is a little bit more niche plays,” he said. “They can focus on a niche of the market or some subspecialty within it, because it is hard to cover the whole breadth.”
Bailey forecast that disruption is coming but not quite yet. "In the next two, three, five years, we will see organizations come with AI-enabled or AI-native solutions that will try to disrupt the industry," she said. "It's going to be hard, though, to replicate the human-to-human element and the knowledge and expertise it takes to guide someone when they're in that moment of need."
The message from OneDigital's leadership is that AI is a tool for efficiency, not a replacement for expertise. It’s a view shared by others such as Craig Weber, head of insurance strategy at Cognizant in a recent IBB interview. The advisors who will define the next era of group benefits consulting are those who can deploy both.
