Employees Perplexed by Benefits Choices

Infrequent communications linked to low employee loyalty

By Stephen Miller, CEBS Aug 23, 2012

More than half (56 percent) of employees throughout the U.S. estimate they waste up to $750 annually because of mistakes made with benefits elections, according to the 2012 Open Enrollment Survey of the Aflac WorkForces Report, a study of 2,500 U.S. consumers conducted in July 2012.

Only 16 percent of employees felt confident they were not making mistakes during the enrollment process and nearly one in four (24 percent) felt they had previously chosen the wrong level of insurance coverage for their needs, such as failing to select plans with appropriate premium and deductible levels—higher-deductible plans typically have lower premiums. Only 16 percent felt confident they were not making mistakes during the enrollment process, revealed the survey, sponsored by supplemental insurance provider Aflac.

Common Mistakes

The survey found that many Americans are on auto pilot when it comes to the benefits selection process and are unaware of all their options. Among their most common mistakes:

89 percent of employees simply elect the same benefits options every year.

61 percent are only sometimes or not at all aware of changes to their policies each year.

Only 16 percent were confident that they contributed the right amount to flexible spending accounts (an online FSA calculator can help).

“Workers cannot afford to be in the dark about benefits options,” commented Audrey Boone Tillman, executive vice president of corporate services at Aflac. “It’s critical that employees understand their benefits options during open enrollment to ensure that they don’t make mistakes that cost them money.”

Perception Gap

While almost half (49 percent) of employers believed they communicated very to extremely effectively with their workers about company benefits, employees often disagreed:

Nearly two-thirds (65 percent) of employees felt they were only somewhat prepared or not prepared for open enrollment.

More than half of workers (52 percent) said that their company had not communicated with them at all about the open enrollment process.

47 percent typically looked to resources other than HR/benefits professionals for advice about their benefits.

The survey demonstrates "a disconnect between how well companies are communicating benefits and how prepared workers feel to select the right options," said Tillman.

Strategies to Improve Communications

Companies can reap significant rewards by developing more effective benefits communications, including healthier, better protected and more engaged employees. According to Tillman, best practices to consider include:

Survey your employees. Electronic communications have made it easier to survey workers at minimal cost to determine what they need and want.

Communicate year-round. Many employers communicate their benefits programs to workers just once or twice a year, often overwhelming them with information at open enrollment or during the hiring process. Instead, present elements of their employee benefits programs throughout the year. Doing so helps employees retain the information, making open enrollment a smoother, easier process.

Offer voluntary benefits. The survey showed that more than half of employees (60 percent) would be at least somewhat likely to apply for employee-paid benefits if they were made available at group rates.

Market benefits offerings to employees. HR professionals can take a cue from marketing campaigns and communicate with employees about benefits in ways that will engage and empower them.

Communication Strategies

Using a mix of communication strategies helps employees understand what’s available and how each plan works, Tillman advised, including:

Online benefits portals.

Agent/broker enrollment sessions.

Employee newsletters.

Lunch-and-learn sessions.

Customized benefits booklets.

Frequently asked questions and other educational materials.

Building Loyalty

The frequency of benefits communication has a positive correlation to workers’ likelihood to leave. According to an earlier Aflac Workforces Report survey conducted in January/February 2012, nearly half (45 percent) of surveyed employees said their HR department communicates too little about their benefits. Significantly, workers who said their HR department communicates too little were nearly twice as likely (63 percent vs. 34 percent) to expect to leave their jobs in the next year.

Frequency of Benefits Communication and Likelihood to Leave

Extremely or very likely to leave their job in next 12 months

Communicates about benefits only at open enrollment or new hire enrollment


Communicates 2 times throughout the year


Communicates 3–5 times throughout the year


Communicates 6–9 times throughout the year


Communicates 10+ times throughout the year


Source: Aflac

Challenges Highlighted

A separate Inside Benefits Communications Survey of U.S. employers, conducted in May 2012 by San Francisco-based Benz Communications, revealed similar concerns regarding the effectiveness of benefits communications. Among the findings:

78 percent of employers cited getting employees engaged year-round among their biggest challenges, yet less than a third (28.9 percent) communicated with employees year-round.

Employers’ top goals included executing a successful annual enrollment (60 percent), increasing workers’ use of preventive care (48 percent) and increasing employees’ 401(k) savings. However, fewer than a quarter (24 percent) reported meeting these goals in 2011.

More than two-thirds (68.3 percent) had budgets of less than $25,000 for benefits communication, while just over 10 percent reported budgets between $25,000 and $75,000. However the majority of these budgets weren't being spent strategically. For example, two-thirds (66 percent) reported print and postage costs (one-time non-renewable expenses) as consuming most of their budget.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related Articles:

Gen Y Favors Target-Date Funds and Roth 401(k)s, SHRM Online Benefits Discipline, August 2012

Get More from Your Benefits Investment, SHRM Online Benefits Discipline, August 2012

Tailor Benefit Communications to Different Learning Styles, SHRM Online Benefits Discipline, July 2012

Employee Advisory Committees Promote Benefits Buy-In, SHRM Online Benefits Discipline, April 2012

Employee Loyalty Hits 7-Year Low; Benefits Promote Retention, SHRM Online Benefits Discipline, March 2012

40% Don't Understand Their Benefit Options; Web-Based Tools Can Help, SHRM Online Benefits Discipline, December 2011


Job Finder

Find an HR Job Near You
Post a Job

Apply by October 19

Get recognized as an HR expert. Earn your SHRM-CP and SHRM-SCP certification, and set yourself apart.

Apply Now


Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 10,000 companies

Search & Connect