Employees Dazed and Confused by Benefit Choices

During open enrollment, misconceptions abound; providing ‘study tips’ can help

By Stephen Miller, CEBS Sep 26, 2016
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Employees are confused and stressed out by the health-benefits selection process, a new survey report reveals.

Often, "employees aren't getting enough from their current benefits communication to be fully empowered to make smart decisions," said Amanda Lannert, CEO of benefits IT firm Jellyvision, which sponsored the survey.

Open Enrollment Season

For tips on helping employees make the best choices of benefits during open enrollment, check out the SHRM resources provided below:

· Guide to Open Enrollment
· Health Benefits Glossary of Terms · Explaining High Deductible Plans to Employees

The poll was conducted in April among 2,105 employees currently receiving health care through their employer. As presented in the survey report, What Your Employees Think About Your Benefits Communication, among those whose companies offer health insurance:

  • Half of employees (49 percent) say making health insurance decisions is always "very stressful" for them.

  • 41 percent feel the open enrollment process at their company is "extremely confusing."

  • 20 percent often regret the benefits choices they make.

While most employees feel confident about health insurance details like the size of their deductibles (73 percent), only about half know their out-of-pocket maximums (53 percent) or their employer's contributions (47 percent).

"The focus on deductible totals versus the total health plan cost may have many employees either making the wrong health plan decision for their situations or making the right decision while thinking it's the wrong one," Lannert said. "If employers can better communicate that, they'll have a happier—and healthier—workforce."

Understand Communications Preferences

In other survey findings:

  • Only about one-third of employees (34 percent) claim they pay attention to all of the materials they receive about their company benefits.

  • Most employees prefer to receive information about company benefits electronically (62 percent).

  • About half describe their company's benefits communication as informative (52 percent) and beneficial (45 percent). Others use more critical language, calling their benefits communication complex (18 percent), disappointing (15 percent), boring (10 percent) or a waste (7 percent).

  • Regarding high-deductible health plans, employees used negative terms like "risky" (30 percent) and "disappointing" (19 percent) more frequently than positive terms like "affordable" (18 percent) and "a good value" (17 percent).

Provide 'Study' Tips

"Statistics show that 46 percent of Americans take less than 30 minutes to make benefits decisions, and in that brief time, 89 percent of people choose the same plans as the year before," said Jennifer Benz, CEO of Benz Communications, a San Francisco-based communications firm, citing research by benefits provider Aflac.

Benz recommends providing employees with four tips as part of "open enrollment school":

  • Send employees to study hall. Suggest employees block 45 to 60 minutes on their calendar to review benefits material, then an additional 30 minutes to actually complete enrollment.

  • Simplify the syllabus. Create a series of benefits tip sheets based on employee demographics. For example, "Benefits for your family," "Benefits every Millennial should consider," and "10 best ways to make your HSA work for you."

  • Avoid teaching calculus on day one. Break down unfamiliar and complex health insurance terms into straightforward concepts and simple equations so employees can see what they're paying for coverage and why. "Feature commonsense, plain-language definitions for deductible, co-pay and co-insurance, so they don't just zero in on per-paycheck costs," Benz said. "Show them how their plan choices affect their health and wallet over the long term."

  • Offer opportunities for extra credit. Give employees the freedom to ask questions by holding town halls, lunch-and-learns, benefits fairs, or "whatever it takes to make sure employees are well-informed with accurate and actionable information," Benz advised. Also, "Consider a series of short webinars to walk employees through what's changing in the year ahead."

Engage Young Workers

"Employees of all ages know far less about benefits than their HR departments do, and far less than their HR departments think they know," said Jeff Bakke, chief strategy officer at Minneapolis-based WEX Health, a cloud-based health care financial management platform. "Most employees still believe that benefits enrollment is something that management is offering for the sake of the company instead of for the workers. Change the conversation and remind employees what they are getting, how much it's worth and why they need to own their benefits decisions."

Meet employees, especially Millennial and younger workers in Generation Z, where they are most comfortable—on their devices, Bakke advised. "While more than a few employers are still trying to make the jump from paper to online—they're too late!—the biggest and fastest growing segment of the workforce wants to do things on their smartphone and other devices. Wearables, apps, social media, online support—these are all familiar tools and modes of communication for younger workers, so bringing these capabilities to the forefront of your benefits communications will help to engage them" in the benefits-selection process.

Related SHRM Articles:

Missing the Mark, Benefits Spending Is Undervalued by Employees, SHRM Online Benefits, September 2016

Open Enrollment Tips for the Coming Season, SHRM Online Benefits, September 2016

At Open Enrollment, HR Departments of One Step Up, SHRM Online Benefits, September 2016

Transparency, Decision Support Are Next Wave in Benefits Self-Service, SHRM Online Benefits, August 2016

SHRM Resource Page:

Guide to Benefits Open Enrollment Season, SHRM Online Benefits, September 2016

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