You spend a lot of time and money every year making sure your employee benefits are competitive and cost effective, and meet the needs of your employees. But according to a 2019 survey by Colonial Life, only a third of your employees really understand what you are offering.

The survey of more than 1,500 employees showed that in companies with more than 100 employees, only 33% of them report understanding their benefits well. In smaller companies, the number is higher at 47%. We can learn a lot from these statistics.

Benefits literacy is at an all-time low

Insurance terminology can be confusing. Copays, coinsurance, premiums, out-of-pocket maximums, annual limits and prior approvals are just some of the more common terms human resources (HR) professionals and benefits administrators need to understand and communicate every day. Employees often do not pay attention to these terms until they are at the doctor’s office or paying a claim.

Benefits literacy means having a level of knowledge that enables people to make informed decisions when choosing and using their benefits. Without it, employees may be missing key components of your benefits program that help protect their health and financial well-being. They may choose a plan that provides them with either:

  • Too much coverage, increasing their monthly salary reductions unnecessarily
  • Too little coverage, exposing them to greater out-of-pocket costs throughout the year

At the same time, employees are spending little to no time choosing benefits during open enrollment. Approximately 33% of workers spend less than 30 minutes making elections. Another 36% spend up to an hour.

You can change that. Personalized, targeted, regular communication with employees can increase employee engagement and enhance your open enrollment process.

Learn from small business

According to Colonial Life, nearly 25% of employees at the smallest businesses have individual meetings with benefits experts. Only 14% of large businesses offer that same level of personal attention. The same applies to group meetings:

  • 37% of small businesses hold group information sessions with HR professionals.
  • 29% of large businesses hold group information sessions with HR professionals.

Large groups are also much more likely to depend on email, web access and direct mail. For example, 58% of large companies rely on email, while only 34% of smaller organizations do the same.

The message here is simple. While smaller companies may rely on common forms of communication, they emphasize the personal. They provide employees with increased opportunities for face-to-face meetings and personalized enrollment.

In these more intimate settings, employees are free to ask questions. They can look for the guidance needed to make educated decisions about what benefits are best suited to them.

Increase understanding, increase value

You have invested in your employee benefits plan. If your employees are spending less than an hour making benefits decisions, they do not understand the value of what you are offering.

  • Engage employees in the process: Colonial Life reports that 93% of employees who participated in one-on-one benefits counseling sessions found them valuable. They also reported being more satisfied with their jobs, had higher morale and stayed with the company longer.
  • Share the cost of coverage: Do not be afraid to show employees the total cost of their benefits. Most employers cover 50% or more of their employees’ premium. Understanding how much you are paying for their coverage can be an eye-opener.
  • Take advantage of technology: When you combine personalized enrollment help with online tools, you offer employees the best of both worlds. They get the help they need making decisions, but have access to call centers, chat features, carrier websites and employee portals when and where they want.

Include family members, improve utilization

Most benefits communications focus on the employee. Chances are a majority of your employees cover not just themselves, but members of their family as well.

You cannot expect employees to make decisions in a vacuum. Many of their choices affect their spouses and children. You need to include them in your educational materials. You may also want to consider offering family access to online portals and websites that provide general information.

HR dashboards

To help bridge the communication divide between employees and their families, many companies are turning to HR dashboards. This technology provides access to information about various services and benefits available to everyone.

Through a central location, employees and eligible family members can access details about benefits quickly and easily. Whether it is a link to the insurance carrier, direct access to FAQs about retirement planning or chatting online with a benefits administrator, these dashboards incorporate every HR resource available.

Some employers rely on these dashboards to complete transactions like orientation, training and open enrollment. They may also serve as a distribution point for newsletters, handbooks and policies.

Meet employees where they are

You want employees to understand their benefits and make them a part of their daily lives. To do that, you need to position your benefits as a tool to help employees reach their goals. Make information easy to access, simple to understand and as clear-cut as possible.

If you communicate with employees online, brand your message in the same way you do corporate information. Spend just as much time on the layout as you do the copy. Anticipate employee questions, use graphics, parcel out information, repeat your message in different ways and offer links for even more detail.

If you need employees to take action, make it easy. Do not communicate information too early. For example, if open enrollment is coming, tease benefit changes a few weeks prior. Then provide more detailed information days before open enrollment begins. The shorter the time between when information is provided and when action must be taken, the more apt employees will be to comply.


Employees are used to seeing ads targeted directly to them. Their social media feeds are filled with products they browsed for or purchased online. They expect the same when it comes to information from their employer.

You can help employees make smarter decisions when you tailor communications to specific needs and life events. Give them the right information, at the right time, in the right place. Be proactive and boost engagement with messaging from their point of view. Enable employees to focus on what matters to them and skip what does not.

Interactive decision support tools can help. For example, employees answer questions (Did you get married? Have a baby? Buy a house?) and are directed to the changes they may need to make as a result (add a spouse, add a dependent, increase life insurance). They receive reliable guidance specific to their situation and financial concerns.

Multiple access channels

We are dealing with a multigenerational workforce.

  • Baby boomers may prefer to set an appointment with a member of HR to go over questions and concerns in person.
  • Generation X may appreciate the opportunity to meet with someone, but will also want access to information when and where they want it — either online or through mobile apps.
  • Millennials and Generation Z will look for answers online. They will access information from their mobile devices and rely on apps to complete transactions.

Regardless of how employees look for the information, it has to be easy to find and understand. They will need ongoing education about the tools available to them, encouragement to take advantage of them and a compelling reason to access the information.

Brand ambassadors

Messages from the CEO or senior vice president of HR have their time and place. And, while you will want executives to buy in on any communications campaigns, you may want to rely on peers and managers to help you day-to-day.

Employees are more comfortable going to colleagues to discuss personal issues. Creating a team of brand ambassadors who understand your programs and how they work can help. They can point employees to appropriate resources, share positive experiences and continue to build confidence in the benefits you offer.

When it comes to benefits literacy, no one is to blame for its decline. The terminology is more complicated and continues to evolve. Employees have more options from which to choose and access to numerous information sources.

Working with your broker or benefits adviser to create a communications plan that is right for your employees is the key to your success. They can help you draft messaging, develop a timeline and increase engagement as a result.

Improving benefits literacy will maximize participation and strengthen the value of your plans.