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3 Tips for Explaining Health Insurance to Your Employees

 

According to a 2016 report by the International Foundation of Employee Benefit Plans, just 19 percent of employers say their employees had a high level of understanding of their benefits." The report cites three main reasons for this:

  • Employees don't open or read the materials.
  • Employees don't understand the materials.
  • Employees don't see the value in their benefits.

The good news is that you can help improve this dismal rate of understanding. Below are three ways to do this for health insurance.

1. Make the information appealing.

As stated, employees demand health insurance from their employers. Therefore, the basic interest is already there. Your challenge lies in expanding on that basic interest. One solution is to present health insurance information in a way that captures employees' interest.

For example:

  • Use short chunks of text, rather than long blocks, when writing emails. Short chunks of text are much easier to absorb and retain.
  • Drop the legalese. Communicate in simple, plain language that the average person can comprehend.
  • Send messages via email or text when announcing open enrollment or health insurance changes.
  • Put the information online. The website should be attractive and materials should be easy to retrieve.

2. Let a broker do the explaining.

The average small business cannot afford to maintain an on-site staff of benefits experts — whose job includes educating employees about their health insurance. A more feasible option is bringing in a health insurance broker.

Health insurance brokers spend the bulk of their time finding the most appropriate health insurance policies for their clients. They understand the ins and outs and peaks and valleys of the health insurance industry.

The broker can teach your employees the fundamentals of health insurance, such as how deductibles and copays work as well as the difference between HMOs, PPOs and health savings accounts. They can also help your employees see the full value of their health plan, so they'll be able to maximize the choices available to them.

3. Don't overcommunicate.

While excellent communication is central to helping employees truly understand their health benefits, be careful of flooding them with information. You want them to pay attention whenever you have something important to share, so make sure your messages are streamlined and appropriately timed. To accomplish this:

  • Avoid sending information that delivers little to no value to the recipient.
  • Speak to employees' logic and emotions. Logic: "Here's how your health insurance plan will change." Emotion: "Here's what you will gain from this change."
  • Know when to ramp up communication and when to scale back. For instance, communicate heavily in the weeks leading up to open enrollment. Outside of that, keep messaging typically less frequent — though it should still be done as needed.

Too much noise and your employees will cease to listen. So aim for balanced communication.

 

 

 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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