SHRM: HR Falling Short on Benefits Education
By Kathryn Mayer
Just ahead of open enrollment, new research finds that HR leaders are communicating with and educating employees on benefits less than they have in years past—and it's likely contributing to employees' falling confidence in their benefits.
HR departments' direct involvement in benefits education is on the decline, according to a new report by Optavise, a Carmel, Ind.-based benefits administration firm. According to the firm's survey of 1,061 U.S. employees with employer-sponsored health plans, one-on-one conversations with HR decreased to 26 percent from 28 percent in 2022. These conversations have been replaced by employers' use of online resources at 63 percent, up from 53 percent last year.
The data marks a continual decline in HR benefits communication over the past couple years—in 2020, for instance, 33 percent of employers offered one-on-one conversations with HR.
It appears that strategy is having repercussions: Compared with last year, fewer employees report that they are very or extremely confident in understanding how their plan works (68 percent, down from 71 percent last year). Meanwhile, fewer employees are taking the time to compare the costs of medical services or prescription drugs before incurring expenses; 35 percent said they do so, compared with 38 percent in 2022.
The findings indicate a "pretty substantial" problem, given that employees are feeling the effects of less education from HR leaders about their benefits, said Kim Buckey, vice president of client services at Optavise.
"Employers are missing important opportunities when it comes to educating employees about how to choose and use their coverage," she said. "When employees don't understand how their decisions—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 costs, both the employees and employers lose."
HR Dealing with Other Priorities
So why is HR benefits education on the decline? It's likely a matter of competing priorities combined with reduced resources, Buckey said.
HR is still dealing with the repercussions of the COVID-19 pandemic as well as a myriad of other problems, she said, including "navigating whether and how to implement a hybrid workforce, recruiting to replace employees who may have left for other opportunities, trying to reduce health care costs caused by inflation and delayed care, and so on."
Plus, communicating with employees can be particularly challenging with a hybrid workforce, with employees in various locations at different dates and times, Buckey said.
Benefits communication has historically been an issue, with employers often falling short in this area, said Casey Hauch, managing director at consulting firm WTW. Employers often wait until open enrollment to talk about benefits, a mistake that affects both employees and employers.
"If you don't regularly communicate about your benefits, you're missing an opportunity to make sure that your people know that you care about them," Hauch said. "You're missing an opportunity to make sure that they know that you have a competitive rewards package."
Given other HR priorities, it's not entirely surprising that employers are relying more on tech to communicate about benefits. Plus, employees increasingly rely on tech in their everyday lives.
But surprisingly, that's not the desired strategy for employees when it comes to learning about benefits.
The Optavise report finds that employees don't perceive the resources their employer made available to teach them about health benefits to be as helpful as one-on-one, personalized guidance: 68 percent of employees said that online resources are very or extremely helpful, compared with 84 percent who said that one-on-one conversations are very or extremely helpful. About half (49 percent) said email is very or extremely helpful, down from 59 percent in last year's survey.
"While online tools and resources have their place—for quick messages and reminders or high-level guidance—they cannot replace a more thorough review of the plan options available," Buckey said.
The Optavise report did have some good news: Compared with last year, overall knowledge of key benefits terminology has increased for six of the nine key terms including premium, deductible, co-pay, out-of-pocket maximum, in-network and out-of-network.
But there's a stipulation: A knowledge gap exists in certain industries, including education and retail, as well as among younger employees and those who earn under $50,000. For instance, when asked about their confidence in understanding their health plan, 60 percent of respondents in education and 64 percent in retail said they felt extremely or very confident in their understanding, compared with 68 percent of the total respondents.
Stepping Up Efforts
The Optavise report emphasizes the need for employers to step up their benefits communications efforts, Buckey said.
Doing so will have positive effects for both employers and employees: Studies have shown a correlation between better and more-frequent benefits communications and employee satisfaction with their benefits and loyalty to their employer, she explained. "Employees who receive communications throughout the year are far more satisfied than those who only receive communications at open enrollment."
Employers need to educate their workforce about basic terms and concepts, the importance of reviewing their coverage each year, considering their current circumstances, and how they can get the most "bang for their health care buck" without compromising the quality of their care, Buckey said.
"Given the range of topics to be addressed, it's important for employers to have a communications strategy in place that maps out what should be communicated to whom, when and using what channels," she said.
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