Benefits confusion leaves important clues

Benefits can be difficult to understand, even for employees who have been enrolled in the same plans for years. There are unfamiliar terms, different rules for different accounts, and decisions that often have to be made long before someone knows what their healthcare needs will be.

Employers and benefits administrators do a lot to help, particularly around open enrollment. But it’s hard to know how much of that information employees actually understand and retain.

One way to get a better sense is to look at what happens after the communications go out. The questions employees ask, the benefits they use, and the places where they run into trouble can help identify areas where more or clearer education would be useful.

Here are five common signs to watch for.

If an HR or customer service team regularly hears questions like “What’s the difference between an HSA and an FSA?” “Does my FSA money roll over?” or “What can I use my account for?“, it’s worth paying attention to the pattern.

The information may already be available somewhere, but that doesn’t mean it’s easy to find or absorb. Benefits guides tend to cover a lot of ground, and employees aren’t always going to know where to look for the answer to a specific question.

How to help: Keep track of the questions that come up most often and use them to improve existing materials. That could mean publishing an FAQ, rewriting an explanation that’s causing confusion, or adding a short video or walkthrough for a topic that’s difficult to explain in writing.

It’s also helpful to use the language employees use themselves. If people consistently ask a question one way, answering it in those same terms can make the information more accessible.

Enrollment is only one part of the picture. Employees may sign up for an HSA or FSA during open enrollment and still be unsure how to use it once the plan year begins.

For example, they may contribute very little because they aren’t sure how much they’ll need. They may pay for eligible expenses another way because they don’t realize those expenses qualify. Some employees may simply lose track of their account balance as the year goes on.

How to help: Account activity can suggest areas where additional education may be worthwhile. If participation is relatively strong but utilization is low, for example, employees may need more practical information about what qualifies and how to access their funds.

Examples can help here. Showing how an employee might use an FSA for glasses, dental care or other common eligible expenses gives them something concrete to work with. For HSA holders, education might cover how to pay or reimburse themselves for qualified expenses, how to check their balance or how their account can be used over time.

Some misunderstandings don’t become apparent until an employee needs care or tries to use an account. That’s when questions about deductibles, eligible expenses, account rules or deadlines can become much more immediate.

An employee might assume an expense is covered when it isn’t, misunderstand how an HSA works with their health plan, or realize late in the year that they still have FSA funds available.

How to help: Review the points in the benefits experience that tend to generate questions or support requests. If employees regularly struggle with the same issue, consider whether there is an opportunity to explain it earlier or make guidance easier to locate.

Timing matters as well. Employees are more likely to pay attention to information when it relates to something they’re currently doing. A reminder about an FSA deadline is useful as the deadline approaches. Guidance about using an HSA may make more sense shortly after the account is opened or when employees begin using their health plan.

Low participation can have a number of causes, so it shouldn’t automatically be treated as an education problem. Still, a lack of understanding can be one of them.

Some employees may avoid an FSA because they’re concerned about contributing more than they’ll spend. Others may not understand the tax advantages of an HSA or may assume it’s only useful if they can afford to contribute a large amount. Employees may also be unfamiliar with the range of expenses that qualify for reimbursement.

How to help: When participation is lower than expected, employee feedback can reveal the reason. It may also be useful to review how the benefit is being explained.

Concrete examples are often easier to understand than descriptions of account features. Showing employees common eligible expenses, explaining applicable plan rules in plain language, and illustrating how different contribution amounts might work can help them decide how — or whether — a benefit sui their needs.

Open enrollment is when employees make many of their benefits decisions, so naturally it receives the most attention. It’s also a relatively short period in which employees are expected to process a large amount of information.

Much of that information won’t become relevant until later. An employee may not have a question about their HSA until they have a healthcare expense several months into the plan year. FSA rules may become more important as spending deadlines approach. A change in family circumstances can create an entirely new set of questions.

How to help: Consider which information employees are likely to need at different points during the year and plan communications accordingly. A few well-timed reminders may be more useful than trying to cover every detail during enrollment.

The topics will vary by workforce and benefit offering, but common opportunities include the start of the plan year, tax season, summer childcare expenses, back-to-school season and year-end FSA deadlines. Life events and changes in account activity may create other opportunities to provide relevant guidance.

Benefits literacy isn’t especially easy to measure. There isn’t one participation or engagement metric that will tell you whether employees understand their benefits.

Looking across several sources can provide a more useful picture. Administrators and employers can review common service questions, enrollment and contribution patterns, account activity and employee feedback to see where confusion tends to occur. Over time, those patterns can also help show whether changes to education and communication are making a difference.

Employees don’t need to know every detail of every benefit they have. They do need to understand the decisions they’re being asked to make, how to use the benefits they choose, and where to find answers when questions come up.

Ultimately, better benefits literacy starts with understanding where employees need help, and making that help easier to find.