6 Ideas to Communicate the Value of Employee Benefits

Employees often don’t understand the real value of their benefits. As a result, they may not appreciate what their employers offer and may fail to use all the benefits available to them. This can undermine an employer’s retention and engagement strategy while lowering return on investment. To obtain the full value of your benefits, focus on employee communication and education throughout the year. The following six ideas can help you increase benefit utilization and appreciation.

Employees Are Confused and Frustrated

Many employees lack the knowledge and time needed to understand their benefits on their own. Data from Guardian shows that 49% of employees don’t understand their benefits.

This lack of understanding can have significant consequences. Employees may:

• Fail to enroll in benefits that could help them. Voluntary benefits allow employees to pick and choose the options that fit their needs. However, if employees don’t understand those options, they may fail to enroll, meaning they won’t have benefits when they need them. They may also end up unnecessarily buying benefits on their own.
• Miss out on using the benefits they already have. For example, an employee who doesn’t understand the company’s employee assistance program may not use the program even when the services would be helpful. Likewise, employees may avoid using their no-cost health insurance coverage because they don’t realize there’s no charge. Employees not using their benefits is a waste of the employer’s investment.
• Be dissatisfied. Let’s say you offer a compensation package that includes a competitive salary and generous benefits. However, one of your top employees doesn’t understand the benefits and fails to use them. This employee then receives an offer from another company offering a slightly higher salary with a significantly inferior benefits package. The employee accepts the offer – although the total compensation is lower, he thinks it’s a better deal because he doesn’t understand the value of his current benefits. Since employees won’t be satisfied with benefits they don’t understand, this type of outcome is possible if employees are not educated about their benefits.

You can avoid these scenarios by employing the following six tactics.

1. Don’t Rely on Wordy Health Plan Documents

The International Foundation of Employee Benefit Plans (IFEBP) says 80% of employees never open benefits communications.

Since traditional benefits documents are often intimidating, this shouldn’t be too surprising. Employees may feel overwhelmed by thick packets. If they think they’re unlikely to understand the dense terminology, they may decide there’s no point trying.

Employers can help by providing easier-to-understand options.

• Leverage interactive digital education options that provide detailed information in a user-friendly format.
• Use graphics to break down information. For example, you could create one graphic to compare two health insurance options and another to show your voluntary benefit options.
• Schedule meetings to give employees a chance to ask questions. Employees may need to talk to someone in person. Your employee benefits partner may provide face-to-face presentations.

2. Provide a Benefit Statement

The average employee compensation for civilian workers as of June 2023 is $43.26 per hour, according to the U.S. Bureau of Labor Statistics. However, only $29.86 of this takes the form of wages and salaries – the rest comes in the form of benefits.

If employees only look at their wages or salaries, they are greatly underestimating their compensation. The benefit statement or total compensation statement is a practical way for employers to show their employees exactly what they’re offering workers. It provides an itemized list of every benefit (including direct and indirect compensation) to show employees everything they receive. It also provides the monetary value of benefits to show employees their true compensation.

3. Spotlight a Benefit Each Month

Some employers only focus on benefit education during open enrollment, which is a mistake. Open enrollment can be a busy time of year – the deadline may pass before employees have time to learn everything they need to know. Employees may also forget some of the information they skimmed, resulting in poor utilization rates.

Employers can help by focusing on benefits education throughout the year. A great way to do this is to pick one benefit to spotlight each month. This allows you to showcase benefits that employees would normally overlook.

4. Provide Timely Benefit Reminders

Another way to increase benefit education and engagement throughout the year is to offer timely benefit reminders. For example:

• Encourage workers to get their flu shots in fall. Most health plans cover flu shots and many other vaccines with no out-of-pocket costs. Make sure your workers know about this benefit.
• Remind workers about upcoming FSA deadlines. If employees don’t use their FSA funds by the deadline, they may lose money. Remind your workers of the deadline and suggest ways to spend extra funds, such as on eyeglasses or dental care.

5. Teach Employees How to Shop for Healthcare

Imagine one of your employees needs a medical procedure. She goes to the nearest facility, but, when the medical bill arrives, it’s much more expensive than she expected. She concludes that her health insurance must be awful – unaware of the fact that she could have received a much better price at a different facility in town.

According to Modern Healthcare, nearly all major health plans provide cost-estimator tools or work with a third-party vendor to provide such a tool. Plus, most self-insured employers offer these tools. Nevertheless, a survey found that only around half of U.S. adults were aware of the price before receiving care and just 12.8% received an out-of-pocket estimate.

Employers can help employees by providing tools, resources, and education:

• Tell employees about cost-estimator tools. Show them how much these tools can save them by highlighting the cost differences for specific procedures. Provide reminders or put up a poster to provide employees with this information throughout the year.
• Provide clear definitions of key insurance terms. If employees don’t understand terms like “copay” or “deductible,” they’ll have a hard time understanding the information they need to make smart decisions.
• Train someone to support employees. Encourage employees to call if they need assistance understanding their benefits.

6. Offer Benefits Your Employees Want

If your employees aren’t using their benefits, the problem could be a lack of awareness. However, it’s also possible that the benefits you’re providing simply aren’t a good fit for your workers.

When you choose Altura Benefits as your employee benefits broker, we’ll conduct a needs-based assessment to determine what you’re doing and what you need to improve. We’ll look at various factors (including your company size and benefit needs) and suggest the plans we think make sense for you. We can also help you educate your employees.

Altura’s personalized approach helps you and your employees achieve the full value of a quality employee benefits package. Learn more.