Benefits Literacy

  Helping Employees Understand Their Health Benefits

According to an Aflac Workforces Report, 76% of employees said that when thinking about their choices for major medical insurance coverage, they don’t always understand everything that is covered by their policy – while slightly more than half (59%) of employees who chose the same benefits year after year say they often don’t have a full understanding of the changes in the policies each year[11].  Because of this lack of understanding, it is important for employers to take the extra step and provide ways in which employees and their dependents can make the most use of their benefits.

A recent ADP Research Institute study shows a wide gap between the goals and reality of how employees understand their benefit plans.  The study shows that 80% of HR decision-makers believe it’s important for employees to fully understand their benefit options, yet they estimate only about 60% of employees do.  In addition, the study shared that a surprising number of large employers (36%) and the majority of mid-sized employers (66%) don’t have an employee communications budget related to their benefit plans[12].

"Workers know what they need to do to manage their health, 
but unfortunately that's not enough, 
said NBGH President Helen Darling. 
To turn this knowledge into positive actions, individuals need 
very specific tools, tactics and motivation. As employers consider 
making changes to their health care benefits in response to 
health care reform, they have a great opportunity to revitalize their 
existing strategy and create programs that will promote  workforce health
 and productivity and hold down overall health care costs
Addressing the Issue of Benefits Literacy

Beyond the issue of health literacy is the issue of “benefits literacy” – not understanding what benefits and programs are available to them, how to use them or how or what they mean (e.g. Summary Plan Description-SPD), or not being aware of what health and wellness benefits and programs are available to them.  

To avoid misunderstanding or lack of awareness, employer communication efforts should be consistent, segmented to the needs of the targeted population and integrated with other benefits and programs.  

According to MBGH’s 2010 employee focus group results, employees want:

  • Clear and concise communications on benefits and what’s available to them, such as cost, coverage, co-pays, benefit changes and who is in their physician network

  • Print communications, even though they prefer getting email communications

  • Personalized communications and information specific to their individual health issues and challenges 

  • More frequent communications and meetings to learn about changes in benefits and wellness and disease management programs that are available to them

  • Focus groups were also conducted with the employee spouses and physicians, both of whom were identified as strong influencers that also want to receive communications on employer programs

Employers should consider the following recommendations:
  48% say it is important to have
    face-to-face meetings annually to
    learn about company benefits

  • Provide employees and spouses/domestic partners with information on benefit costs, cost comparisons among plans, the actual cost of health services and benefit and coverage changes that could have an impact on out-of-pocket costs

  • Offer consistent, clear, personalized information, tools and incentives to support employee health improvement efforts, based on their specific health issues

  • Provide personalized communications and focus marketing efforts on the health status of the individual and their readiness to change

  • Include family members in company communication efforts so they can support health improvement and behavior change efforts for all family members at home and in their daily lives

  • Use testimonials and stories the employee can relate to, such as a personal life-changing story, or someone with the same health condition, age, gender or life issue

  • Ensure that doctors, spouses/domestic partners and managers are equipped with accurate information on employer benefits and wellness programs

Employees indicate that their awareness of certain value-based  benefit programs is low. 
For example, 44% don’t know what a Center of Excellence is