Health Plans: Align Design, Employee Education, and Workforce Fit

Editor's note: Posts published on From the Workplace are written by outside contributors and do not necessarily reflect the views or opinions of SHRM.

Every renewal season, employers spend weeks discussing premiums, deductibles, and renewal projections. Yet one question rarely makes the agenda: Do employees actually understand and use the plan they're paying for? 

That question matters more than many employers realize. In the 2024 Employee Benefit Research Institute and Greenwald Consumer Engagement in Health Care survey, fewer than half of health plan enrollees (48%) got at least three of four basic true/false questions about their own plan right. If employees don't understand how their coverage works, even a well-designed plan can feel inadequate.

Employers shouldn’t treat plan design, employee education, and workforce fit as separate decisions. They're three parts of the same strategy.

Start with Your Workforce, Not the Benchmark

Many employers begin by comparing their benefits to competitors or accepting a carrier's standard recommendation. Those benchmarks can be useful, but they don't necessarily reflect your workforce.

A younger workforce has different needs than one managing multiple chronic conditions. Employees working remotely or in the field may need a different communication approach than those in an office. The right plan depends on who is actually enrolled, not what another employer offers.

Article: Employers Face 9.5% Healthcare Cost Increase in 2027

Education Is Part of the Benefit

Open enrollment is often the only time employees hear about their benefits. Unfortunately, that's not enough.

 Employees usually judge a health plan by their first unexpected bill, a denied prescription, or confusion about where to seek care. Those experiences shape perceptions of the employer's benefits, even when the plan itself is competitive.

Instead of adding more materials during enrollment, employers should focus on simple, timely communication throughout the year. Short reminders about preventive care, telehealth, or urgent care options often do more than lengthy benefits guides.

Measure Experience, Not Just Cost

Renewal discussions typically focus on premiums and claims. Those metrics matter, but they don't tell you whether employees can actually navigate their benefits.

HR leaders should also ask:

1. Are employees using preventive care?
2. What questions does HR answer repeatedly?
3. Are emergency room visits occurring for conditions that could have been treated elsewhere?
4. What does utilization suggest about employee understanding?

Employee sentiment backs this up. Mercer Marsh Benefits found that only 59% of employees believe their benefits meet their current needs, while employees who can personalize their benefits are far more likely to believe their employer cares about their well-being.

Article: How HR Can Reduce Healthcare Costs Through Smarter Benefit Design

5 Steps Employers Can Take Now

None of this requires a consulting engagement or a bigger budget. A few practical moves cover most of the ground:

1. Run a plan-fit review once a year. Put your census and claims data next to your plan design and ask whether they still match. 10 minutes with the right data beats an hour of benchmark comparisons.
2. Survey employees about understanding (not just satisfaction). A three-question pulse survey asking what confuses people will tell you exactly what to communicate next.
3. Build a simple communication calendar. One short message a quarter, timed to real moments: deductible reset in January, urgent care options before flu season, flexible spending account deadlines in the fall.
4. Give managers a one-page cheat sheet. Where to find the plan documents, who to call, and answers to the five most common questions. Employees ask their supervisor first.
5. Add utilization to the renewal agenda. Review preventive care usage and avoidable emergency room visits alongside premiums and claims. Treat them as measures of whether the plan is working. 

The most effective health plans aren't simply the richest ones. They're the plans employees understand, use with confidence, and believe fit their needs. As your next renewal approaches, make sure the discussion covers not just what the plan costs but how employees experience it. 

James Morrissey is an employee benefits producer in New England whose pharmacy benefits background spans pharmacy benefit manager, health plan, and employer advisory roles.