Do Your Employees Understand Their Benefits?

Employee benefits can play a significant role in recruitment and retention. In the age of The Great Resignation, they are becoming the focal point for many HR teams. But, do employees understand their benefits? Unfortunately, many of them don’t.

Your efforts to provide high-quality benefits are only effective if employees use them. That’s why it’s imperative to find out whether employees understand their benefits and help them take full advantage of them. Here is how.

Do Employees Understand Their Benefits?

Employee benefit packages are often complex. According to a survey by Voya, a third of American employees don’t understand how their benefits work. More than two-thirds would like their employers to continue consulting them on benefits throughout the year, not just during the open enrollment period.

Younger workers report that they want more communication about the employee benefits than older workers do. Meanwhile, over 70% of employees seek additional benefits support and guidance.

Why Are Employees Confused About Their Benefits?

If information about employee benefits is freely available, why are workers so confused about them? Let’s review a few common reasons.

Rushing

Many employees don’t spend enough time reading about the benefits during the open enrollment period. According to SHRM, 73% of workers spend less than an hour reviewing their options during annual enrollment. More than 40% spend less than 30 minutes.

Surprisingly, employees who have little understanding of their benefits aren’t planning to spend more time on them during the next enrollment period.

Supplemental Health Coverage

Some employers are offering supplemental health coverage to their workers. Employees who have never encountered this type of insurance before don’t understand how it works. Many of them are confused about choosing this voluntary option and can’t determine why it’s beneficial.

Jargon

When trying to figure out how their benefits work, employees have to navigate through jargon and confusing acronyms.

From coinsurance and deductibles to CDHP (Consumer Driven Health Plan) and HRA (Health Reimbursement Arrangement), it can be hard to find clear information and figure out what needs to be done.

Overwhelming Choices

In their rush to provide employees with top-notch benefits, HR specialists offer them a variety of choices. These choices are usually more confusing than exciting. Employees have to choose between multiple similar plans without understanding the fundamental differences.

For example, choosing between the Health Savings Account (HSA) and the Flexible Savings Account (FSA) can be nearly impossible for someone who doesn’t understand how they work.

Unopened Communications

Many companies are making serious time and effort investments in benefits communications. Unfortunately, employees don’t open or read communications materials.

According to IFEBP’s survey, 80% of companies cited unopened communications as the top challenge of benefits education. This hinders the entire communication effort and forces companies to rethink their approach.

Misunderstood Communications

The same survey found that nearly 50% of all companies say that even if employees open communication materials, they still don’t understand them.

This doesn’t always mean that communication materials are poorly designed. Most likely, they simply need to be reinforced by transparent explanations.

How Can You Help Employees Understand Their Benefits?

If your employees don’t understand their benefits packages, the ROI (Return on Investment) of such benefits is extremely low. Here is what you can do to improve it.

Robust Education Program

You need to create a robust education program that covers all aspects of benefits. It should include financial literacy, retirement benefits explanation, health benefits literacy education, wellness and mental health education, and more.

All aspects of the benefits package should be covered in the most transparent way possible. You should also pay specific attention to explaining jargon and deciphering acronyms. 

Multi-Channel Communication

Sending an e-mail or writing an e-book about benefits is no longer enough. Employees ignore these types of communication. Just as you do with clients, you need to reach employees across different touchpoints. Some options can include:

1. Web Portal
2. Webinar with Virtual Q&A Sessions
3. In-Person or Virtual Meetings
4. Social Media
5. Print Media
6. Forum
7. Enrollment Meetings

It’s up to the employer to get the information through. Accordingly, you shouldn’t leave it up to the workers to find and understand it. You need to ensure that employees have all the necessary tools to take full advantage of the available benefits.

Targeted Information

The one-size-fits-all model doesn’t work for benefits education. In fact, this model leaves communications unopened and employees confused. You need to develop targeted information for each segment of employees to make sure they don’t get any unnecessary data.

The information you provide can differ depending on the employee’s financial status, age, lifestyle, and marital status.

When providing targeted information, you need to focus on its clarity. Long and confusing texts don’t work. Consider creating visual educational materials that include videos, eye-catching images, and infographics. Visuals attract employees’ attention and make information more digestible.

Understanding Starts at the Top

When employees have little understanding of their benefits, offering them high-quality packages doesn’t yield the desired effect. It’s up to the executives to complement the benefits package with a robust education program.

To help employees take advantage of the available options, you need to prioritize communication. Since most of your employees want help understanding their benefits, your objective is to offer this type of assistance.

Once employees begin understanding their benefits, the ROI of robust packages will increase tremendously.