Most American workers like to believe they understand their benefits. In fact, 80 claim to do so “very well.” However, the reality of whether or not employees fully grasp what perks are available to them may be a different story. And their lack of understanding may have negative impacts on their financial wellbeing.
In a recent survey by The Guardian, just under half of respondents showed that they actually did understand their benefits “very well,” based on the results of a 10-question quiz. In fact, the average score of all employees who took the quiz was a 72. That’s a C minus.
Even more troubling was the fact that one in five American workers scored an “F” on the quiz, which addressed various aspects of benefits coverage and terminology. Across the demographics, the failure rate was one out of ten early boomers and a whopping one out of four millennials. One out of four respondents also admitted that they viewed making their benefit selections as more of a guessing game than a making an actual informed decision.
Of the different types of benefits, employees were much more knowledgeable about health insurance, as compared to other supplemental benefits. Fifty-seven precent didn’t know critical illness benefits could be used for a wide range of out-of-pocket costs, and 46 percent weren’t aware than an “elimination period” was the time between when their claim is approved and when they starts receiving disability income payments. A number of participants also were unfamiliar with terms such as “portability” and “guaranteed issue.”
These results beg the question of how well employees understand the benefits available to them, how this affects the value they place on them and, ultimately, how that determines the way they view their employers. On that note, less than half (47 percent) of those surveyed felt their employer was doing a good job of educating them about their benefits. This was down from 66 percent just two years ago.
The American workforce has made it clear that they want better access to benefits through their employers. But offering more choices necessitates more effective communication, tools, and resources to meet the needs of an increasingly diverse population. Employees want:
- Clearer language that’s free of jargon
- Personalized recommendations tailored to their unique situation
- Expert guidance to answer questions, offer feedback, and validate their choices
- Online/interactive tools to help them learn and make better decisions
Making sure your employees understand their benefits and are able to take full advantage of them is every bit as important as the quality of the actual benefits themselves. Let’s talk about what we can do today to help boost your employees’ Benefits IQ.