Benefits adoption is a major challenge for HR leaders. It affects employee satisfaction with their benefits and whether or not they feel taken care of. It affects employee health and productivity, and it affects the ROI companies receive from their benefits package. But when companies offer complex, comprehensive benefit plans, it can be difficult to ensure eligible employees understand and engage with the different plans available to them. 

For many organizations, open enrollment is in the rearview mirror and the benefits plan year is well underway. At this point, benefits communications should shift to a focus on adoption. In this post, we give HR leaders practical tips for driving benefit adoption in the year ahead so that the benefits package they thoughtfully crafted is widely adopted.

Why increasing benefits adoption is important

If your human resources team has invested the time to research employee needs and the most impactful benefit plans to meet those needs, and your company has spent money on setting up those benefits, these investments will have gone to waste if employees don’t get value from those benefits. To get value from the benefits, employees have to actually use them. 

Take mental health benefits, for example. Workers with poor mental health can expect to have an average of 12 days of unplanned absences from work, this is compared to 2.5 days of unplanned absences for workers that report good mental health. These unplanned absences cost the U.S. economy $47.6 billion a year. And yet, 57% of employees are unaware of their employers’ mental health benefits. 

When employees adopt and engage with their benefits, everyone wins. Employees are healthier because they are seeing their doctors regularly, they’re enjoying wellness benefits and receiving the financial support they need, and because of this, they’re less stressed. They’re happier. They’re more productive. 

In addition to increased productivity, employers can enjoy cost savings in the form of lower FICA taxes when employees contribute to voluntary pre-tax accounts like their 401k, their Health Savings Account (HSA), and their Flexible Spending Account (FSA). Since HSAs and FSAs give employees a way to save for future healthcare costs, it makes it more likely they will seek the medical treatment they need, when they need it, leading to a reduction in expensive claims later on. When workers delay health care, it can lead to worse health outcomes and more expensive treatment needed later on. More expensive claims, raises the cost of premiums for everyone. 

High adoption and engagement with benefits makes happier employees and happier employees are more likely to stay loyal to an employer (which helps to improve retention), and can lead them to advocate for their employer (which helps to improve recruitment). 

Strategies for increasing benefits adoption

There are several strategies human resource departments can engage to drive employee adoption of their benefits. They include:

• Clearly outlining the advantages and key information about each benefit.

• Folding benefits education into new employee onboarding.

• Crafting an effective and ongoing communication campaign.

• Contributing to employees’ voluntary fringe benefit accounts.

Below we’ll cover each strategy in greater detail. 

Key points to include in an effective benefits education campaign 

When introducing (or re-educating employees on) benefit plans, HR departments should avoid giving employees a giant, comprehensive plan document. This can overwhelm employees and reduces the likelihood they’ll read any of it. Instead, content should be crafted to hit the high points: what are the benefits of signing up for this plan, how does it work, how do they sign up.

For all benefits, it’s essential that employers clearly communicate how to sign up for their benefits and how to use them. For all types of benefits, employers should include:

• Education materials from benefits providers outlining the reimbursement process.

• How to use the debit card for point-of-sale transactions.

• Mobile app access for easy benefit account management. 

Here are some specific examples of key points to include for popular benefits:

High Deductible Health Plan (HDHP): 

• HDHPs have the lowest monthly premium of the health insurance plans, there are no copays, and it comes with the added benefit of being eligible to contribute to an HSA while enrolled in this health plan. 

• Preventative care, as defined by the ACA, is covered at 100% prior to the deductible being met.

Health Savings Accounts (HSA)

• Employees must be enrolled in an HDHP to contribute to an HSA. 

• All employee contributions are deducted from their federal income taxes.

• HSA balances roll over from year-to-year.

• Employees can use contributions to pay for a wide range of qualified medical expenses tax-free, including their deductible, co insurance responsibilities, and prescriptions.

• Employers should also make sure to include the annual contribution limit for HSAs and how much the employer is contributing to each account. 

Healthcare or General Purpose FSAs (FSA): 

• FSAs are compatible with any kind of health insurance plan.

• Employee contributions are deducted from their federal incomes taxes

• Unused contributions are forfeited at the end of the year, but employers should specify if they allow for a grace period or rollover of unused contributions.

• Distributions can be used to pay for a wide range of everyday medical expenses from copays to sunscreen, tax-free. 

• Employers should be sure to include the annual contribution limit for FSAs in their communications and let employees know how much the they will contribute to employees’ accounts. 

Dependent Care FSA (DCFSA): 

• Employees can deposit pre-tax money to pay for child and dependent adult day care that allows them to work. 

• Employers should include the annual contribution limits, the eligible expenses for which employees can reimburse, and how much the employer is contributing to the account.  

Limited Purpose FSA (LPFSA): 

• Employees can deposit pre-tax money to pay for eligible dental and vision expenses. 

• LPFSAs can be paired with HSAs and any other fringe benefit or health or dental and vision plan. 

• Employers should make sure to include the annual contribution limit and how much they will be contributing to the account. 

Health Reimbursement Accounts (HRAs): 

• HRAs are employer-funded and compatible with any health insurance plan. 

• Employers should communicate how much employees have available to them and which expenses are eligible to be reimbursed for.

Pre-tax Commuter Benefits: 

• Employees can contribute pre tax money to pay for eligible commuting expenses. 

• Employers should be sure to include the monthly contribution limit and which commuting expenses are eligible for reimbursement. 

Lifestyle Spending Accounts (LSAs): 

• For each Lifestyle Spending Account employers should communicate how much they will contribute to each account, the types of expenses employees can reimburse for, and the cadence at which that amount renews (i.e. monthly, quarterly, or yearly). 

• Employers should make sure to tell employees the amounts for which they reimburse will be taxed at the appropriate income tax rate.

Medical Travel Accounts: 

• When offering a Medical Travel Account employers should communicate how much they will contribute to each account, the types of expenses employees can reimburse for, and the cadence at which the amount renews. 

• Employers should make sure to tell employees they will be taxed on the amounts for which they reimburse.

In addition, employers should craft different communication campaigns targeted at the different demographic groups in their workforce. Each generation has a tone and communication channel they prefer. If employers tailor their communications to these groups, their messages are more likely to land.

Why incorporating benefits education into employee onboarding is effective at driving adoption

When new employees are going through the onboarding process, the tendency can be for them to focus on learning their new role and company processes. Choosing and signing up for benefits can often be an afterthought. And if your company has different types of plans than the employee’s previous employer, they might not take the time to learn about these new benefits if it’s something they have to do on their own time.

But if HR departments make benefit education part of the onboarding process, treating benefit adoption and engagement as if it’s part of the employees’ jobs, this can create the space and time for new employees to fully grasp what is available to them. This can lead to higher benefit adoption and healthier, happier and more productive new employees.

How employers can remove barriers to benefit engagement

Common barriers to benefit engagement include confusion on how to access benefits, what’s available, and where to get help.

Most benefits can only be chosen during open enrollment, when benefit plans are shared with employees and they choose the benefits that work for them. However, communicating about benefits should be a year round process. It’s also key to share communications through multiple communication channels including email, chat, text, and reminders at in-person or online events such as company or department meetings.

At the beginning of the plan year be sure to: 

• Share benefits websites and outline the process of setting up a login and activating their accounts.

• Create and circulate a quick reference sheet of login addresses and support contact information for your different benefits providers.

• Encourage employees to download the mobile apps for their benefits so they can manage their account on the go.

• If you have a high number of employees whose first language is other than English, consider making benefits communications available to them in their Native language. This can help with comfort, understanding, and adoption.  

Throughout the year:

• Find out what education materials are sent out by your providers so you can reinforce, not duplicate, their efforts.

• Work with your benefits provider(s) for ongoing benefits education, including guides and resources to share with employees and communication templates. 

• Send out monthly or quarterly reminders about upcoming deadlines, as well as advantages to using benefits, so that employees remember what is available to them.

Regular benefits communication can ensure that your team stays engaged with their benefits and is reminded to access and use them. 

Why employers should contribute to employees’ fringe benefit accounts

Employer matching for employee contributions, or just a set monthly contribution, to fringe benefit accounts like HSAs and 401(k)s has positive effects for everyone. It financially supports the employee and it can even save the employers money. But the biggest gain when employers contribute to employees’ fringe benefit accounts is that it can increase adoption of these benefits as well as increasing employees’ saving activity. 

According to recent research, by seeding employees’ HSA accounts and then matching their contributions up to a certain level, companies see a higher participation rate in their HSA than companies who don’t contribute to employee accounts.

How Lively helps companies increase benefits adoption

Lively provides employers with the support they need to increase benefit adoption among employees. The following features and services we offer are tools employers can utilize to ensure all eligible employees are using our benefits to their fullest potential.

• Lively offers a suite of benefits that can all be bundled for easy and centralized benefits administration and employee access.

• Lively’s technology simple integration into your current benefits system for smooth employee onboarding and account management.

• Employees can access and manage their accounts through our sleek mobile app.

• We offer a stacked debit card for point-of-sale transactions for multiple benefits and a simple reimbursement process.

• Lively offers ongoing account holder education through an email welcome series, regular account reminders, and education built into the account dashboards. 

• Lively has a curated selection of resources employers can draw from when crafting their communication campaigns. 

• Lively’s customer service consistently and quickly resolves issues on the first interaction and has a customer satisfaction rating three times higher than the industry average.

• Lively has a Spanish language mobile app and customer service.

Get started with Lively today!

If you’re ready to work with a benefits administrator that’s a true partner in benefits adoption, reach out to Lively today. Our best-in-class benefits, platform and customer service make it easy to offer employees impactful benefits that drive positive health and business outcomes.