Employers put a lot of thought into their employee benefits packages. They work hard to care for and retain their employees and to attract top talent in the marketplace. In addition to health insurance, core benefits like life, disability (also known as income protection benefits) and supplemental health insurance help protect the financial, physical and mental wellbeing of workers and their families.
Despite the efforts to provide benefits, 57% of employers say educating workers about benefits is a challenge.1 The average American doesn’t fully understand the benefits that are being offered, because they can’t get past often-used complex jargon. Most people don’t use insurance terms in their everyday lives.
“That’s a problem and the insurance industry can help change that,” says Laura Marzi, benefits expert and head of marketing for Group Benefits at The Hartford. “When employees think their benefits are too hard to understand, or even worse, not relevant to their needs, they won’t use them. Our research of U.S. workers shows a general lack of understanding about employee benefits.”
To help make benefits significantly more relatable and useful to working Americans, it’s essential to provide educational materials that explain – plainly and simply – how employee benefits relate to real life and how they can support real people.
Reframing and Revising To Focus on People
The Hartford’s 2023 Future of Benefits study shows that 38% of U.S. workers say the names and descriptions of their benefits are hard to understand.2 And some of those descriptions can even be a turnoff for many people, Marzi says.
She explains that some benefits arose from the early and dangerous days of rail travel in the 19th century when accidents killed or seriously injured countless people. One example is accidental death and dismemberment insurance, also known as accidental loss of life and severe injury benefits. It pays cash benefits in the event of an accidental death or serious injuries, like paralysis and loss of limb, sight or hearing.
“Dismemberment is an awful word when you think about it,” Marzi says. “Nobody wants to think that it would ever happen to them. When that stops someone from understanding how that benefit can help them or their family in their worst possible moment, then we need to redefine how we position and even name that product.”
Disability insurance, also known as income protection benefits, is another example of a benefit that can cause confusion. About 25% of people going out on short-term disability are pregnant women using it for maternity leave.3 Simply put, it’s a benefit that gives a new mother income while she’s taking time away from work to recover from childbirth.
“Most pregnant women would not consider themselves as being disabled,” she says. “They’re bringing a new life into this world. We need to make sure workers understand that this benefit helps replace income while they are growing their family and recovering.”
Nick Colucci, a New England-based benefits broker with Marsh McLennan’s Clark Insurance, agrees that making benefits relatable and relevant to working Americans is long overdue.
“Short-term disability has been called short-term disability forever. When I talk to employers, I always call it income replacement,” Colucci says.
Simpler Solutions: Employers Rely on Easier Ways To Educate
Human Resource professionals tell us that one of the biggest challenges throughout their careers has been to get people to be educated benefit decision makers.4 The task of explaining company benefits has traditionally fallen to these human resource employees, who are also juggling recruiting, hiring, training, compensation, leave and more for today’s multigenerational, diverse workforce. That’s a lot of messages to deliver.
With all those responsibilities, employers are looking for innovative ways to reach their employees. Specifically, employers look for materials that are:
- Brief and easy to understand for all employees
- Relatable with real-life examples
- A good fit for the company culture
- Creative with attention-grabbing pictures and illustrations
- Distributed via social media and video to reflect the needs of younger workers
“More than ever, if employees understand what’s available at their fingertips, they’re more apt to use it,” Colucci says. “And overall knowledge is going to make them feel more supported at their company.”
He explains that the bulk of the benefit conversation between brokers and employers is over health insurance. That often leaves less time to explain other benefits, particularly supplemental health insurance, some of which have relatively small monthly premiums of $4 to $10, Colucci says.
“But it all ties back to medical insurance,” Colucci says. “When workers use benefits like accident and critical illness insurance, they receive that lump sum cash benefit. That’s a game changer.”
Equity in Benefits
Now, more than ever, it’s critical for employers to provide opportunities for workers to fully understand and use the benefits that protect their income and pay them cash directly. This is especially true for many working Americans living paycheck to paycheck. The Hartford’s recent Future of Benefits pulse survey shows that 39% of U.S. workers say they have less than $1,000 in savings or no savings at all.5 That same research finds that 63% of workers feel their financial stress has increased over the past year and 56% say the financial stress negatively affects their mental health.
“Many people don’t have a safety net and employees have diverse needs,” Marzi says. “As an insurer, we have an obligation to make sure the working population can fully understand their coverage through simple words and straightforward explanations.”
So, what’s in a word? Everything – especially if it helps break down the barriers to understanding employee benefits.
Access our Estudio sobre el futuro de los beneficios to dive deeper into our proprietary research about the U.S. workforce.
1, 2, 5 The Hartford's 2023 Future of Benefits Study and Pulse Surveys. Viewed June 2023.
3 Congressional Research Service, Access to Short-Term Disability Plans: In Brief, released October 28, 2021. Viewed January 2023.
4 Results from The Hartford’s qualitative research conducted in September/October 2022 among HR professionals.