5 Most Confusing Employee Benefits & How to Simplify Them
Employee benefits are complicated, to say the least. With more options than ever before, an overwhelming amount of information and confusing HR lingo, it’s no surprise that 50% of employees don’t understand their benefits.
While many employees might understand the basics of what a co-pay is and what cancer insurance is for, there are several plan types and perks that fall off the radar when open enrollment rolls around, which can lead to confusion or frustration down the road.
But what’s missing the mark for employees? And how can HR work to address these shortfalls? We’ve got the scoop on five of the most misunderstood employee benefits and several tips to help bridge the gaps in education.
High Deductible Health Plans
*Audible sigh* Yes, the dreaded high deductible health plan tops our list of the most misunderstood employee benefits.
Many employees are either scared away by the actual plan name (and can you blame them? ‘high deductible’ doesn’t exactly scream ‘pick me!’) or are lured in by the low premiums without actually understanding the full scope of how the plan pays for health care. And no matter how much information you cram into your annual benefits guide, taking a traditional approach to HDHPs will likely yield disappointing results—low enrollment or confused and angry employees.
In order to increase HDHP adoption and improve education, start with the plan name itself. Popular alternatives to ‘high deductible health plan’ include ‘HSA-eligible plan’ or ‘low premium plan’.
From there, add in short, ‘snackable’ educational materials, like video, to relevant spots in your communications and even directly within the benefits shopping experience if your platform allows.
Here’s an example of a video explaining HDHPs.
Access FREE materials in our benefits video library.
Of course, you can’t talk about HDHPs without their trust companion—the HSA. But an HSA is just one of the three primary types of benefits accounts, which can quickly get confusing.
The best way to sort out the confusion? Take a visual approach with a simple chart that breaks down the primary features of benefits accounts and what’s applicable with each type. Or, if you only offer one benefits account, like an HSA for HDHPs, only speak to that specific account type and keep the information close to other relevant information—in this case, info on your HDHP.
In your communications, be sure to highlight the benefit of each account type, especially the tax advantages that make contributions a no-brainer.
According to our 2019 Benefits Benchmark Report, we are seeing contributions to benefit accounts increase, though there is still a long way to go. Your goal should be to help employees max out contributions, and the only way to make that happen is to clearly and concisely communicate the advantages of the savings.
If you do offer a benefits account, consider also making a contribution on behalf of employees. Remember, these accounts are tax-advantaged for employers too!
A remote doctor visit via video? It might sound unconvincing at first, but telehealth programs are on the rise as employers seek creative ways to drive down the cost of health care. The only problem? No one is using them—yet.
According to the National Business Group on Health, 70% of large companies offer a telehealth program, while only 3% of employees take advantage. Yikes.
The problem with telehealth? Awareness and understanding. Many employees are completely unaware of their telehealth benefits or they aren’t sure how to actually use them.
Making small tweaks in your communications plan and small investments in your education strategy can make HR a hero by putting telehealth front and center. This is another great area where video can be a highly effective tool to help explain telehealth. And, short, timely emails, like a quick reminder during cold and flu season, will keep the program and perks top of mind when it matters most.
Employee Assistance Programs
Another widely misunderstood employee benefit, Employee Assistance Programs (EAPs) are highly valuable for helping employees deal with work or personal issues in a confidential and affordable manner. While this sounds broad—that’s actually intentional, as EAPs can help employees cope with and handle a myriad of issues.
Family issues, financial concerns, relationship problems, substance abuse issues, mental health problems and even legal concerns fall within the scope of what an EAP can address.
Employers often offer these programs because happy, healthy employees are more productive within the organization. But employers simultaneously fail to effectively convey the true scope of the program.
Typically, an employee with an EAP can reach out for a specific number of counseling referral sessions (usually 1-3) at no cost to the employee. From there, the employee will work with a recommended resource, therapist or service at a discount.
Arm employees with the information that they need to make an informed decision with a clear EAP guide, which includes easy to access contact info and a complete list of problems that fall within the scope of the program. Additionally, put your EAP front and center during the enrollment process as an automatic addition and throughout the year on your benefits website. You could also push out timely reminders to keep the program top of mind during relevant months or internal education campaigns, like ‘Mental Health Awareness’ or ‘Financial Wellness’.
Offering a retirement account is one of the most in-demand employee benefits. But does your workforce actually understand how their account works? Are they financially literate about their future? Are they contributing enough towards retirement? In many cases, the answer is a resounding ‘no’.
According to a recent Retirement Confidence Survey, 24% of workers have less than $1,000 saved for retirement. Over half of workers surveyed have less than $50,000 stashed away, a far cry from the recommended amount of ten times your annual salary (per Fidelity Investments).
Workers are often painfully aware of this savings gap, with a 46% of workers expressing concerns about not having enough money for retirement, in addition to concerns about not having enough money to cover unexpected medical bills or not being able to maintain the current standard of living.
If employees know they aren’t saving enough for the future, why aren’t they doing more to prepare?
Some studies suggest that many workers grossly underestimate how much money they’ll actually need for a comfortable retirement. And, in many cases, a retirement account is simply provided as a stand-alone perk that’s never really explored after enrollment.
Decision support can be a great way to educate employees in real time and encourage better contribution decisions. Automation tools can help employees put their investments on cruise control by automatically increasing contributions on a set schedule. And, visualizing the data can help simplify the experience, with charts to showcase progress and comparisons to benchmark goals.
From a plan design perspective, consider incentivizing higher contribution amounts by staggering your match. For example, instead of offering a straight 3% match, offer 1% for every 2% the employee contributes up to a certain amount. This can dramatically increase employee contributions without costing you any additional money.
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