Employees may be more interested in the intricacies of their PTO policies or gym memberships, but employers need to make healthcare benefits just as appealing if they want to set their employees up for success.
Sixty-eight percent of employees feel confident in how their healthcare plan works, leaving a large group of people at risk of overspending on their coverage, according to data from employee benefits solutions platform Optavise. Meanwhile, that same literacy gap doesn't necessarily exist when it comes to lifestyle benefits, leaving the burden on employers to level the playing field.
"There are challenges in understanding coverage details that rarely exist with lifestyle benefits," says Kim Buckey, vice president of client services at Optavise. "As employees find it difficult to navigate the healthcare system and fully grasp their benefits, closing the literacy gap requires transparent communication, education and efforts to simplify the understanding of healthcare benefits."
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Lifestyle benefits usually refer to non-medical perks or incentives meant to improve the daily life and personal experiences of employees, such as gym memberships, transportation benefits and child care services. Employers have made a concentrated effort to communicate these benefits, and as such, can use them to improve overall culture, Buckey says.
"Lifestyle benefits are generally more relatable and straightforward for employees to understand, serving as an enticing draw due to their immediate impact on work-life balance and well-being," she says. "[As a result], in general employees tend to be more satisfied with these programs."
However, when it comes to the complexities of their healthcare coverage, 35% of employees have had to teach themselves about terms and processes by going online or reading other materials; 46% reached out to friends, family and coworkers, and 15% were educated by outside benefits experts. Only 27% received their information from their employer's HR team. For many, this means either misusing or ignoring their benefits altogether.
For example, Optavise's data found that only about one-third of respondents check their benefit plans whenever they need care, and while 88% know whether their plan has a network, fewer are checking the network status of their providers. Unlike lifestyle benefits, which typically come at no additional cost to employees, this kind of misunderstanding has a significant impact on how much employees are spending: 30% of respondents reported having received an inaccurate bill within the past three years, up from 28% in 2022.
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"Everything from which plans they select, to what provider they see, how they get their prescription filled and where they get tests and treatment done can affect their out of pocket costs," Buckey says. "When employees don't understand their decisions, those decisions often end up costing them, and ultimately their employers, more."
Employers should be investing just as much money in education as they are in the benefits themselves, according to Buckey, which means stepping up their communications efforts. One-on-one support can be especially effective: 84% of employees reported healthcare education sessions to be very or extremely useful, and those who participated were far more likely to supplement their employer-sponsored coverage with additional voluntary or buy-up coverage, thus making them better prepared for understanding the costs.
"It's important to remember that supporting employee well-being goes beyond providing plans and programs that address their physical, mental and financial health needs," Buckey says. "It must include education about how those plans and programs work, and work together, to meet each employee's individual needs."
