You’ve invested real money in a benefits package — health insurance, dental, vision, disability, maybe life insurance and some voluntary benefits. But if your employees don’t understand, value, or actively use their benefits, you’re getting a fraction of the return on that investment. The research on this is consistent and somewhat alarming: most employees significantly undervalue their benefits because they don’t understand them. A 2023 IFEBP (International Foundation of Employee Benefit Plans) survey found that only 19% of employees strongly agree they understand their benefits well. That’s an 81% communication failure rate. This guide provides practical strategies for closing that gap.
Why Benefits Communication Is a Business Problem, Not Just an HR Problem
Poor benefits communication has direct financial consequences for your business beyond the soft metrics of employee satisfaction. When employees don’t use their preventive care benefits — annual physicals, cancer screenings, immunizations that are covered at 100% — they develop conditions that become more expensive to treat. Untreated chronic conditions lead to more sick days, reduced productivity, and higher long-term claims costs. The return on investment for effective benefits communication that increases preventive care utilization has been documented across multiple employer studies, with preventive care consistently reducing downstream claims costs.
Benefits communication also directly affects retention. An employee who doesn’t understand the value of their benefits will compare job offers purely on salary — if a competitor offers $2,000 more in base salary, that employee doesn’t factor in the $8,000/year employer health insurance contribution because they don’t know what that contribution is worth. Helping employees understand the total value of their compensation — not just their take-home pay — changes the retention calculus in your favor. An employer who communicates that their benefits represent an additional $15,000/year in total compensation creates a very different conversation about a $2,000 salary offer elsewhere.
And perhaps most practically: benefits that employees don’t use generate internal HR and benefits questions — employees who are confused about their coverage call HR, file incorrect claims, and create administrative burden that consumes time you don’t have. Better upfront communication reduces reactive question volume throughout the year.
The Foundation: Know Your Audience
Effective communication starts with understanding who you’re communicating with. A 25-year-old marketing coordinator who has never had health insurance before needs different information than a 45-year-old operations manager who’s been managing her family’s benefits for two decades. A workforce of predominantly hourly workers in a manufacturing environment has different communication channel preferences and health literacy levels than a professional services team of college-educated specialists.
Before designing your benefits communication strategy, identify the key characteristics of your workforce that affect communication: What’s the age distribution? Are most employees digital natives or more comfortable with print? What languages are spoken? What’s the general health literacy level — do your employees know what a deductible is, or is that a concept that needs to be explained from scratch? Do you have remote employees who can’t attend in-person meetings? Are employees spread across multiple shifts that make synchronous communication difficult?
Your benefits broker should be a resource here — a good broker who has worked with multiple small businesses can tell you what communication approaches have worked for groups similar to yours and what tends to fall flat. Don’t design your communication strategy in isolation; your broker’s experience across many employer groups provides genuine comparative insight that you can’t develop on your own.
Open Enrollment Communication: Getting the Fundamentals Right
Open enrollment is your primary annual opportunity to communicate benefits — and it’s chronically underfunded in terms of communication effort. Most small employers send an email with the plan documents attached, maybe hold a 15-minute office meeting, and call it done. The result: confused employees making uninformed elections, poor plan participation rates, and employees who pick the cheapest option without understanding what they’re buying.
Effective open enrollment communication has several components that together meaningfully improve employee understanding. A benefits summary document — one to two pages, plain language, no jargon — that describes each plan option in terms of real scenarios. Not “this plan has a $1,500 deductible and 80/20 coinsurance after deductible for in-network services” but “if you go to the doctor for a sick visit, you pay $30. If you need an MRI, you pay 20% of the cost after your $1,500 deductible is met — for a $2,000 MRI, that’s $400 after deductible.” Concrete examples dramatically improve understanding.
A personalized cost comparison showing each employee what they’ll actually pay per paycheck at each coverage level (employee only, employee + spouse, employee + child(ren), family) removes the math burden from employees and makes the real financial impact of their choices clear. A benefits meeting — in person, virtual, or both — with Q&A time gives employees the opportunity to ask questions they’re too embarrassed to ask their employer. Your broker should lead this meeting; they’re positioned as a knowledgeable third party, which reduces the social awkwardness of asking “basic” questions.
Year-Round Communication: The Strategy Most Employers Skip
Open enrollment communication gets all the attention, but year-round benefits communication is arguably more impactful for ongoing utilization and satisfaction. A few low-effort, high-impact touchpoints throughout the year maintain employee awareness of benefits they’ve already enrolled in but may not be actively using.
January reminder: New year, new deductible. Remind employees that their deductible has reset and explain what that means practically — the first medical expenses of the year are their responsibility up to the deductible amount. This prevents the common frustration of employees who forgot their deductible resets and are surprised by a January medical bill.
February-March: Use your preventive care benefits. Remind employees that annual physicals, well-woman exams, cancer screenings (colonoscopy, mammogram, Pap smear), and immunizations are covered at 100% in-network with no deductible. Many employees either don’t know this or forget. A simple email or posting in your communication channel of choice with the specific list of covered preventive services and how to schedule them drives utilization of the highest-value, lowest-cost benefits you offer.
October-November: FSA reminder. If you offer a Flexible Spending Account, remind employees in Q4 that FSA funds may be “use it or lose it” at year-end (depending on your plan’s carryover provisions). Employees who don’t spend their FSA balance lose those pre-tax dollars — a direct financial loss that erodes their goodwill toward the benefits program even though it was preventable with a timely reminder.
Ongoing: New employee onboarding. The benefits onboarding experience for new employees sets the tone for how they’ll relate to their benefits throughout their employment. A new-hire benefits walkthrough — ideally with your broker participating — that explains the coverage in plain language, walks through how to use the ID card, explains what preventive care is free, and gives the new employee a direct contact for questions creates a much better foundation than handing someone a benefits guide and hoping they read it.
Making Benefits Easy to Access and Understand
Even well-communicated benefits can underperform if accessing information about them is difficult. The goal is to ensure that an employee who has a question at any moment — not just during open enrollment — can find the answer quickly without calling HR or your broker for every simple query.
Most carriers have member portals that allow employees to: find in-network providers, check claim status, view their deductible and out-of-pocket accumulator, download digital ID cards, and review their Explanation of Benefits documents. Making sure every employee knows about and has access to their carrier’s member portal is a basic step that many employers skip. Including the carrier’s member portal URL, phone number, and app (if available) in your benefits summary document and new employee onboarding materials is an easy win.
Employer-provided benefits administration platforms — increasingly offered by brokers at no additional cost — can centralize benefits information, enrollment records, and carrier contact information in one place accessible to employees year-round. When an employee wants to know “what’s my dental plan’s annual maximum?” they shouldn’t need to dig up a plan document or call HR — they should be able to find the answer in a self-service portal in two minutes.
The Broker as a Communication Resource
Your broker is your most underutilized benefits communication resource. A good broker is not just there for open enrollment and renewal — they’re a year-round resource for employee questions, claims issues, and benefits education. When your employees have questions about their benefits, having a direct line to a knowledgeable person (not a carrier call center) dramatically improves the employee experience.
Giving all employees your broker’s direct phone number and email address — and communicating that they’re available and willing to help with benefits questions — is one of the highest-value communication steps you can take. Employees who feel they have an accessible expert to call with their benefits questions are significantly more confident in using their benefits appropriately. And for common questions like “is this provider in-network?” or “how does my deductible work?” your broker can answer in one call what an employee might otherwise spend 45 minutes on hold with the carrier to resolve.
Frequently Asked Questions
How often should I communicate with employees about their benefits?
A minimum of four times per year is a reasonable baseline: a comprehensive communication during open enrollment, a new year reminder about deductible resets and preventive care, a mid-year check-in highlighting underutilized benefits, and a Q4 FSA reminder if applicable. More frequent, brief communications (monthly or bi-monthly) maintain awareness without creating communication fatigue.
What if most of my employees are hourly workers who don’t check email regularly?
Multi-channel communication is essential for diverse workforces. Printed materials posted in break rooms, brief toolbox talks during shift changes, text message reminders for deadline-sensitive communications (FSA deadlines, open enrollment close), and one-on-one conversations during onboarding are all more effective than email for employees who aren’t regular email users. Your broker can help you adapt communication strategies for your specific workforce.
Should we show employees the total dollar value of their benefits?
Yes — total compensation statements that show employees what their benefits are worth in dollar terms consistently improve benefit appreciation and retention-related satisfaction scores. Include the employer’s annual premium contribution, the employer’s retirement plan contribution (if applicable), and the dollar value of other employer-paid benefits. Seeing “your total compensation is $72,000 (salary: $58,000, benefits: $14,000)” changes how employees perceive their employment relationship.
Benefits communication is an investment that pays dividends in utilization, retention, and employee satisfaction. Garden State Benefits helps small businesses throughout our 26-state service area build and execute year-round benefits communication strategies. Call Paul Z Olah at 856-880-6340 — active, year-round partnership is how we operate.