Here’s how employee benefits education impacts your bottom line

When it comes to factors that impact your company’s bottom line, things like sales, cash flow, and the economy might come to mind. Here’s a less obvious element to add to your list: employee benefits education.

What does benefits education have to do with bottom line, you ask? It’s a good question. Let’s begin answering that by exploring some data. In 2023, Optavise surveyed 1,061 employees with employer-sponsored health plans who don’t work in the insurance industry, and we found that many employers are taking a more hands-off approach to benefits education:

• Since 2019, employees report decreases in group (15%) and 1:1 (10%) benefits education from HR.
• Since 2021, employees report a 10% decrease in learning about health insurance terms and processes from HR.
• Employees report increases in digital education from their employer, with email up 6% since 2022 and online resources up 10% since 2022. Less than half (49%) of workers say emails are helpful.
• 28% of employees report learning about health insurance terms and processes through a family member, while 18% learned through a friend, acquaintance, or coworker.
• 35% of employees say they educate themselves about health insurance.

These numbers are concerning because rather than learning about benefits from professionals, many employees are receiving benefits education online, from acquaintances, or through their own research. This could result in employees making important benefits and healthcare decisions based on less-than-ideal (or downright incorrect) information.

When employees are ill-informed about their benefits, here’s how it can impact your bottom line:

Higher health care utilization costs

Healthcare utilization and cost of care are two major factors driving employer healthcare costs. When employees spend more money on healthcare services and treatments, employers spend more, too. And when employees don’t understand their benefits or the healthcare system, they’re more likely to overspend.

For example, our study found that only 35% of consumers report comparing treatment or service costs from different providers before choosing where or how to get care. Of those who never compare costs, 67% simply didn’t know they could. However, among employees who learn about benefits from a benefits educator in a group setting, the percentage who report comparing treatment or service costs increases to 50%!

This shows that when employees learn about benefits and the healthcare system directly from a professional, they’re more likely to make smart, economical choices about their care.

Higher health plan costs

As an employer, you know that high-deductible health plans (HDHPs) can help you save considerable amounts of money on premiums compared to health maintenance organization (HMO) or preferred provider organization (PPO) plans.

However, many employees balk at HDHPs, not understanding that when paired with a health savings account (HSA) or health reimbursement agreement (HRA), these plans can provide flexibility in managing costs of care.

Our study found that employees who learn about their health plans from a benefits educator are 5% more likely to enroll in an HDHP because their employer offers an HSA/HRA. This is because they gain understanding of how an HSA/HRA can give them greater discretion over their healthcare dollars.

Related: 6 tips to help your employees get the most out of their 2024 benefits

Higher workers’ compensation costs

When employees avoid treatment for illness or injury because they don’t understand their benefits, there’s a greater chance they’ll file a fraudulent workers’ comp claim. For employers, the financial and administrative obligations of workers’ comp claims can be hefty.

Voluntary benefits—such as accident insurance, hospital insurance, and critical illness insurance—can help employers reduce their workers’ compensation risk. That’s because these products can help employees seek medical care when they need it, while helping to safeguard them from financial impact.

Benefits education is an important influence in driving employees to opt in to voluntary benefits. Our study found that 45% of employees who engaged in 1:1 conversation with third-party benefits experts and 47% of employees who participated in presentations/group sessions with benefits experts added voluntary benefits, compared to just 33% of the base population.

Higher employer turnover costs

It’s no secret that dissatisfied employees are more likely to leave. And turnover costs companies an average of $36,295 annually in lost productivity and rehiring costs.

When employees aren’t educated about their benefits, they’re less likely to appreciate them and more likely to seek a new job. Our survey found that benefits played an “extremely” or “very” important role for two-thirds (67%) of those who changed jobs in the past year.

At the same time, we found that employees who learned about benefits from HR or a third-party benefits educator are more likely to be satisfied with their benefits than if they were educated by a family member or if they educated themselves.

Take control of how your employees learn about benefits

By now you realize how important employee benefits education is and how it impacts your bottom line, but you may be wondering how in the world your HR team can add this to their already heaping plate.

That’s where third-party benefits educators—like Optavise—enter the picture. Our educators can act as an extension of your HR team, helping your employees understand their options and make informed decisions about their benefits.

Our research finds that across the board, employees who were taught about healthcare by a third-party educator are more satisfied with their benefits and more confident in their understanding of how their health plan works compared to employees who learned from HR, a family member or friend, or by themselves.

Want more? Check out our blog, Helping employees understand their health plans

Optavise is your benefits partner
Optavise is a trusted partner, guiding employers and their employees through healthcare choices including voluntary benefits, benefits administration, and year-round advocacy services that reduce costs and increase benefits engagement.