Employee benefits are one of the biggest investments an employer makes in its people. But employees don’t understand their benefits as well as employers often assume — and they can’t use benefits they don’t understand. For employers, that confusion can affect plan selection, program utilization, preventive care and the return on benefits investment.
In a 2024 study, nearly 9 in 10 privately insured adults said they understood the health plans offered to them, but only 48% correctly answered at least 3 out of 4 basic true/false questions about their plan.
That confusion has real consequences.
When employees do not understand their benefits, they may overlook programs, delay preventive care, or miss opportunities to make better decisions for themselves and their families. For employers, that means they are not getting the full value of the benefits they invested in.
“If we can drive employees to get their recommended annual screenings and catch cancer at stage one or two rather than stage four, when they’d normally start seeing symptoms, not only can you save somebody’s life — you can save a lot of money on the cost of that care,” said Melissa Cotterill, executive vice president at Westcomm.
Why Benefits Communication Often Falls Short
Too often, employee benefits communication is written for a broad, generic audience — or in a way that makes sense to HR professionals or brokers, but not to employees. Employees don’t understand their benefits when the information is too complex or not useful enough to guide a decision.
Timing is also a factor in successful benefits communication. When benefits are explained once at open enrollment and then disappear until the next enrollment cycle, employees are less likely to remember and use their benefits.
If your communications still revolve around open enrollment, our Annual Communications Plan Workshop can help you build a more effective year-round plan.
What Benefit Confusion Causes
Employees don’t use their benefits fully when they don’t understand them well enough to make confident decisions. They may not know what support is available, when to use it, or how to access it. In some cases, employees may contact HR for help with programs that are already available but not clearly explained.
When employees are confused about health plans, they may choose coverage that costs them more or miss out on tools designed to help them make medical plan decisions. They may focus on one part of the decision, such as their deductible, without fully understanding the tradeoffs in premiums, out-of-pocket costs, or employer HSA contributions.
Without clear employee benefits communication, employees may not understand how high-deductible plans and health savings accounts work. Only 3% of working Americans understand the full benefits of an HSA, according to a Voya study in 2024.
That disconnect affects more than the employee experience. Employers invest heavily in health benefits and support programs. But when employees do not fully understand their benefits, employers are not getting the full value of that investment either.
Why Employees Skip Preventive Care and High-Value Programs
When employees delay screenings and preventive care, serious conditions may be caught later, when treatment can be more complex, disruptive, and expensive — to both the employee and the employer.
Research has found mammography screening is associated with a meaningful reduction in breast cancer mortality, and colorectal cancer screening has been associated with about a 26% reduction in colorectal cancer deaths.
Yet more than 90% of Americans have delayed getting a checkup or recommended health screening on time, according to the 2025 Aflac Wellness Matters Survey. Millennials and Gen Z are more likely to put off health screenings than older generations.
Nearly half said logistical issues like scheduling, work conflicts, or taking time off get in the way. A quarter said they feel healthy and don’t think they need checkups, and 14% said insurance issues are a barrier.
Employees might skip preventive care if they don’t know which step to take next. They may not know which providers are in-network, how to schedule an appointment, or where to find the information they need to take the next step.
How Employers Can Help Employees Understand Their Benefits Better
For employers wondering how to improve communication about employee benefits, the first step is to make communication more useful to employees.
- Explain benefits before employees need to make a decision.
- Use plain language and real-life examples.
- Repeat key messages throughout the year.
- Give employees one clear next step.
Want to see what that looks like in practice? Read What Effective Employee Benefits Communication Looks Like.
Final Thought
Employees cannot use benefits they do not understand. When communication is unclear, employees may miss programs, delay screenings or choose coverage without understanding the tradeoffs. Clearer, more relevant benefit communications can help employers improve understanding, support better decisions and get more value from the programs they already fund.
See how Westcomm helps employers improve benefit communications to support better employee understanding, decision-making, and benefits use.
