Do Your Employees (Really) Understand Their Benefits?

Do your employees understand their benefits? You may not want to be so quick to say yes.

Here’s the truth: Employee benefits can be very confusing, and a vast majority of employees struggle with choosing and using their healthcare plans.

In fact, 35% of American workers didn’t fully understand the benefits they chose during open enrollment in 2021. On top of that, two-thirds want their employers to provide ongoing employee benefits education (and not just during an open enrollment presentation).

Your employees are probably not getting the full value of their benefit programs if they don’t understand them. Here are six signs your employees don’t understand their benefits — and what you can do about it.

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1. They don’t use their benefits

This one’s a bit of a no-brainer. If employees don’t understand their benefits, they may not use them at all.

It could be because they’re afraid of misusing their plans and getting a surprise bill. So if an employee isn’t sure if their plan covers a specific healthcare service, it’s likely easier to simply not use it.

Or maybe they just don’t know what their plans offer. For instance, they could miss the memo that their plan covers a free monthly therapy session, and (by default) opt not to take advantage of it.

Or maybe they don’t even know they have a particular benefit. For example, someone could easily forget they’ve signed up for short-term disability insurance, only to run into financial trouble after an accident.

2. They frequently ask basic questions

Employees should feel comfortable contacting human resources with benefits questions, but pay close attention to how often it happens.

On a basic level, it’s not a great use of your HR team’s time if they’re fielding basic inquiries like “How much can I contribute to my 401(k) plan?”

But if you step back and look at the larger pattern, you might realize that folks are confused. And the more basic the questions, the more they need benefits education.

Regardless of how often employees are reaching out for benefits support, your benefits broker should be helping your HR team handle these questions. They also offer proactive benefits education services during the open enrollment period. With clear answers to their questions, employees can choose the benefits that match their needs.

3. They receive surprise bills

Between 2018 and 2020, one in five insured adults received an unexpected bill from an out-of-network healthcare provider. Two-thirds of adults worry about affording bills like these.

Employees who don’t understand their benefits are more likely to receive out-of-network or uncovered care. After all, if you don’t have a good handle on what’s covered and what’s not, it’s almost too easy to make a misstep and get hit with a bill.

If your HR department frequently hears from employees asking why they received a bill, you’re probably dealing with a widespread misunderstanding about benefits.

4. They choose unnecessarily expensive plans

Open enrollment can be pretty stressful. You may think you know what your health needs will look like for the coming year — but there’s always a chance of something going wrong, right?

Employees who don’t understand their options may end up choosing the wrong healthcare plans. Many will overcompensate to be “on the safe side,” choosing plans with more coverage than they need.

People naturally want to protect themselves and their families, and healthcare plans can often give the impression that more is safer. Consider the names many leveled plans have — Gold, Silver, and Bronze, to name a few. Employees assume that “gold” or similarly titled plans provide the best coverage.

But not everyone needs that gold plan. And if they end up choosing a plan with unnecessarily high coverage, it can lead to a lot of wasted money – both for the employee and the employer.

5. Vendor data shows widespread confusion

Employees don’t always reach out to HR with benefits questions. Instead, they may reach out to the vendor for help.

If you offer healthcare navigation or an employee assistance program (EAP), you may have access to data on program usage and employee interactions. That data can tell you how often people contact them and why. And that’s a lot of useful intel.

Pay close attention to what questions they’re asking. For instance, if they’re frequently asking questions about certain parts of their plan, there may be an opportunity for a FAQ newsletter, or a lunch-and-learn on the topic.

6. Survey respondents feel “lost” or “overwhelmed”

If you don’t already send out benefits surveys, now is the time to start. Surveys can tell you whether employees genuinely understand their benefits options, but you may have to read between the lines.

Many people won’t tell you directly if they fully grasp their benefits. Instead, they may say they can’t navigate the customer service system. Or they might say there are too many choices or the plan website is confusing.

Those are all ways of asking for help. When they raise the flag, take notice.

How to ramp up your benefits education

Investment in benefits education can pay off big time, both for you and your team. Employees get more for their money and time, and you’ll get a higher ROI on benefits.

Here are some ways you can help employees get the most from their benefits options:

• Offer price comparison tools and healthcare navigation services that help employees choose and use their benefits.
• Provide benefits education all year, not just during open enrollment. Keep benefits top-of-mind.
• Partner with your broker to answer employee questions, and integrate those questions into your benefits education program.
• Revisit how you talk about the benefits you offer. Is it easy to understand? Instead of putting the choice fully on employees’ shoulders, make sure they know that your HR team (and your broker) are their partners in the process.
• Offer an always-on member support app, so they can get their benefits questions answered as they come.

Nava benefits experts are here to help you and your employees make benefits easy to choose and use. Talk to a Nava expert today.