The Hidden Cost of Benefits Confusion: Why It’s Hurting Your Business

Consider Sarah, a dedicated employee who delayed seeking medical care because she wasn’t sure if her plan covered the visit. She wasn’t confident the provider was in-network. She didn’t understand her deductible. She worried about a surprise bill. By the time she scheduled care, her condition had worsened. What could have been a simple visit turned into extended treatment, missed work, and unnecessary medical expenses.

Multiply Sarah’s situation across an entire workforce, and the impact on organizations becomes clear. When employees don’t understand their benefits, they are more likely to delay care, misuse their plans, or avoid accessing available resources altogether.

For employers, the consequences are costly. Healthcare claims rise. Productivity drops. HR teams become overwhelmed by basic questions that could have been avoided with better support. Investments in telehealth, EAPs, and other benefits often go unused, reducing ROI. Over time, this erodes morale, increases turnover, and damages the employer brand – it’s time to fix that. 

The Many Faces of Benefits Confusion

Benefits confusion doesn’t happen all at once. It builds slowly, fueled by complexity, disjointed tools, and unclear communication. The result is a daily experience for employees that feels frustrating and fragmented. What’s often fueling the confusion is:

• Plan Complexity: Employees often face jargon-laden documents, unclear coverage details, and frequent plan changes without adequate education, especially with newer plan types like High Deductible Health Plans (HDHPs) paired with Health Savings Accounts (HSAs).
• Disjointed Systems: Navigating multiple portals, providers, and apps without a unified view leads to point solution fatigue for both employees and employers.
• Poor Communication: Infrequent or generic HR communications, such as one-size-fits-all open enrollment emails, fail to address the diverse needs of employees, particularly in large enterprises with vast and diverse employee subpopulations.
• Timing & Access: Employees often need immediate answers, but don’t know where to turn. They may approach HR teams, who might not be equipped to handle specific healthcare queries and are cautious to avoid data security breaches or HIPAA violations.

The Hidden Costs Are Bigger Than You Think

When benefits confusion goes unchecked, the consequences ripple across your organization. What seems like a personal issue for employees quickly becomes a business issue for employers. These hidden costs are often overlooked, but they have a direct impact on your bottom line.

Common Financial Waste

Employers often lose money on underutilized services like telehealth and Employee Assistance Programs (EAPs), which are already paid for but rarely used. Financial waste also stems from employees choosing costly care options, such as visiting the emergency room instead of urgent care or relying on out-of-network providers. These patterns can drive up healthcare spending unnecessarily and highlight a gap in education or access.

Lost Productivity

Both employees and HR teams spend valuable work hours searching for answers about coverage and care. Coordinating with insurance companies, especially through call centers, often pulls people away from their core responsibilities. In some cases, delays in care or the stress of navigating a complex system can result in missed workdays or reduced performance due to working while unwell.

HR Burnout

Benefits inquiries, especially when they’re urgent or come in waves during open enrollment, place a heavy burden on HR teams. Many of these questions are repetitive, time-sensitive, and require detailed knowledge that not all team members are trained to handle. Over time, this can lead to frustration, inefficiency, and burnout, making it harder for HR to focus on long-term strategic initiatives.

Employee Dissatisfaction and Turnover

When employees feel unsupported in navigating their healthcare options or confused about how to use their benefits, engagement can decline. A confusing or stressful benefits experience can also negatively impact how employees view their employer. Since benefits are a significant part of total compensation, a poor experience can quickly lead to dissatisfaction and higher turnover rates.

Real-World Data: Quantifying the Problem

Benefits confusion isn’t just frustrating. It’s measurable. The numbers behind this issue reveal how much time, money, and productivity are lost when employees lack clarity around their healthcare benefits.

• Approximately 49% of employees don’t understand their benefits, and 80% never open benefits communication, according to data from the International Foundation of Employee Benefit Plans.¹
• HR professionals spend 10 to 15 hours each week responding to employee questions, requests, and disputes.² Many of these questions and needs relate to benefits management and health-related support.
• The time employees waste on completing HR-related tasks adds up to 40 million hours each month and about $8.15 billion in lost productivity across large companies in the U.S. and the UK.¹

Why Clarity is a Strategic Advantage

When employees understand their benefits, everyone benefits. Clarity drives efficiency, reduces waste, and improves both the employee experience and business performance. It also builds trust, which strengthens culture and retention.

Here’s what a clear benefits experience unlocks:

Healthier, More Productive Employees

When employees know how to access care and understand what their plan covers, they are more likely to use preventive services, avoid costly mistakes, and return to work faster. This leads to better health outcomes and helps minimize the disruptions that come with illness or delayed treatment.

More Strategic HR Teams

Fewer benefits-related questions free up HR professionals to focus on initiatives that move the business forward. Instead of troubleshooting coverage issues, they can invest in programs that strengthen culture, improve inclusion, and support long-term employee growth.

Reduced Waste and Smarter Spending

Clear benefits guidance helps employees stay in-network, choose appropriate levels of care, and take advantage of underutilized services like telehealth and mental health support. These behaviors lower unnecessary costs and contribute to more efficient benefits utilization.

Stronger Employer Brand and Improved Retention

Benefits play a critical role in how employees perceive the value of their compensation. When employees feel informed and supported, they are more likely to trust their employer, stay loyal to the organization, and experience an overall sense of job satisfaction. 

How Healthee Solves This Problem

At Healthee, our mission is to demystify healthcare and benefits for employees while reducing the administrative burden on HR teams. We’ve built a platform that empowers employees to find the right care, understand their plan, and make informed decisions without needing to decipher complex documents or wait on hold with their insurer.

Healthee uses AI-powered technology to deliver instant, personalized answers to benefits-related questions. Employees can access cost transparency tools that show them exactly what to expect for services like doctor visits or imaging. The platform also offers tailored insights, helping employees select the best plan for their needs and use it effectively throughout the year.

The results speak for themselves. Healthee helps HR teams reclaim up to 9 hours each week by eliminating repetitive healthcare and benefits queries. During open enrollment, this time savings becomes even more valuable. In one case, a leading social media company achieved 232% ROI and saved over $280,000 in just 15 days by optimizing plan selections and reducing claims volume.

By simplifying the experience for employees and lightening the load for HR, Healthee transforms benefits from a source of confusion into a source of value.

Conclusion on the Confusion

Benefits confusion is more than an inconvenience. It drains morale, wastes time, drives up costs, and puts unnecessary strain on both employees and HR teams. The longer it goes unaddressed, the more it chips away at productivity, satisfaction, and your organization’s ability to retain top talent.

Now is the time for employers to take a closer look at the full benefits experience. Auditing where confusion arises and identifying opportunities to reduce friction is a critical step toward improving care, lowering costs, and strengthening your overall employee value proposition.

To learn more about how a unified benefits experience is driving clearer care exploration and improved wellbeing, explore our proprietary Healthee data in The 2025 Benefits Divide.

References:

1. HR Executive. (n.d.). HRE’s daily number: Benefits confusion. Retrieved from https://hrexecutive.com/hres-number-of-the-day-benefits-knowledge

2. Stratus HR. (n.d.). Estimated time on HR: Employee relations & compliance tasks. Retrieved from https://stratus.hr/resources/how-much-time-do-you-spend-on-employee-relations-and-compliance/