The Fatal Flaw of Open Enrollment? A Lack of Benefits Literacy
Employees often struggle with the lingo and details of benefits, and that could be leading them to make bad decisions about insurance or financial savings. Here’s how you can help with benefits literacy.
All the work that you’re putting into your association’s open enrollment may not be doing much if it’s not connecting with your employees.
And there may be signs of a disconnect. In fact, it might even be something of a literacy problem—a benefits literacy problem.
This problem, as CNBC notes, is exemplified by the fact that many employees rarely make changes to their existing benefits packages. One study, by the insurance firm Aflac, found that 93 percent of respondents keep with a benefits package rather than change it up as needed—leading to situations of healthcare overpayment, failure to get the full 401(k) match offered by employers, or missing unique benefits that could save employees money down the road.
“Let’s be honest: Benefits are confusing. Confusion leads to stress, stress leads to avoidance, and avoidance leads to making the same expensive mistakes every year,” CNBC contributor Amanda Lannert explained.
And that’s not an isolated point, either. A recent study by the firm Businessolver found that roughly 80 percent of employees likely are not knowledgeable about basic aspects of their benefits offerings, with younger employees and those with lower incomes most likely to be confused. (One sticking point cited by the study? Confusion over basic terms such as “copay” and “out-of-pocket maximum.”)
“Less than 1 out of 5 users characterized themselves as experts about their own benefits,” the report said [PDF]. “The bulk of respondents effectively indicated they knew the bare minimum, while a full 30 percent stated they were confused.”
The report recommends that organizations come up with “a personalized, year-round engagement and education approach that appropriately uses technology to give employees small, manageable, and meaningful bites of information” to improve awareness or literacy.
In a recent blog post for Forbes, Businessolver Senior Vice President of Employee Engagement Marcy Klipfel noted that the education process is a big part of improving literacy, and that employers must meet different generations of employees halfway.
“Gone are the days when a booklet on health insurance sufficed for benefits communication,” she wrote. “Our ways of communicating have changed, and our workforce has diversified, with four generations actively working and a fifth engaged through pensions and benefits.”
(AntonioGuillem/iStock/Getty Images Plus)