It’s no secret, open enrollment is one of the most important and stressful times of the year for HR leaders. Employees make selections that directly affect their health, finances, and satisfaction for the next 12 months. According to LIMRA, over 70 percent of employees who understand their insurance and retirement benefits extremely well report high satisfaction, compared to much lower satisfaction among those who do not¹. Raising benefits literacy with the right tools reduces HR support volume, improves plan choices, and benefits both employees and employers.
Benefits literacy means employees have both awareness and comprehension of their health and wellness benefits. They know what is offered, how coverage works, and what it costs. Without this understanding, employees risk selecting plans that do not fit their needs, missing out on free preventive services, and generating higher claims costs.
Research shows a strong correlation between benefits literacy and satisfaction. More than 70 percent of employees who understand insurance and retirement benefits extremely well are highly satisfied with their health benefits, while satisfaction drops significantly among those with limited understanding¹.
Many employees are not even sure what benefits their employer provides. About three in ten workers are uncertain whether core benefits such as medical, dental, or vision coverage are part of their compensation package². This lack of awareness means employees may miss out on valuable coverage or choose plans that do not align with their needs. Over time, the absence of clarity can also lead to lower engagement and reduced appreciation for the total value of their employment.
For nearly half of employees, without open enrollment implementation planning, benefits are only discussed for a brief window of time. Compressing complex healthcare decisions into a short window leaves little opportunity for understanding. Most employees spend less than an hour reviewing their options², which is rarely enough to compare plans, evaluate costs, and consider how their needs may change in the year ahead. The result is rushed decision-making that often defaults to familiar but potentially suboptimal choices.
Twelve percent of employees have dropped a benefit in the past two years, often because costs increased or the coverage was not used³. In many cases, the decision to drop a benefit stems from a lack of understanding of its value, rather than an informed choice based on actual need. These cancellations can leave employees underprotected and more vulnerable to financial risk.
Organizations that restrict open enrollment communication to the windowed period of time miss significant opportunities to increase understanding throughout the year². Without ongoing reminders, educational content, and interactive tools, employees quickly forget details about their coverage. This limited engagement perpetuates confusion, drives more basic HR inquiries, and increases the administrative burden during the next enrollment cycle.
Taken together, these challenges lead to poor plan selection, underuse of preventive services, and a heavier workload for HR teams — costs that add up for both employees and employers.
The most effective benefits literacy tools include:
When these tools are embedded in the enrollment process, employees gain the clarity they need to make confident, informed decisions.
Selecting the right benefits literacy tools starts with understanding the specific needs of your workforce and the infrastructure that supports them. The most effective solutions are scalable, able to adapt as your company grows or expands into new locations, and flexible enough to serve employees with diverse roles, schedules, and technology access. Tools that employees actually use matter most, which means intuitive design and mobile accessibility are essential.
Finally, a strong benefits literacy program is never confined to the open enrollment window. Organizations that weave education into the entire year, through email updates, self-service portals, printed materials, and live Q&A sessions, see significant gains in both understanding and employee satisfaction². The goal is to create a consistent, multi-channel conversation about benefits so that when enrollment arrives, employees are already confident and informed.
When employees have a clear understanding of their benefits, their decision-making process becomes more intentional and data-driven. Instead of defaulting to last year’s plan or choosing the lowest premium without considering long-term costs, they evaluate options based on their personal health history, expected medical needs, and financial priorities. This informed approach significantly reduces the risk of surprise medical bills and helps employees avoid paying for coverage they will not fully use.
From the HR perspective, benefits literacy tools reduce the flood of repetitive questions that can overwhelm support teams during enrollment. By cutting down on the need for one-on-one explanations of basic terms like “deductible” or “out-of-pocket maximum,” HR leaders and benefits managers can reallocate their time toward strategic initiatives such as refining benefits strategy, improving employee engagement, or negotiating more competitive plan rates. The ripple effect extends to the organization as a whole, boosting retention, strengthening employer brand perception, and promoting equity in benefits access across all employee demographics.
For many organizations, open enrollment is synonymous with high stress, tight deadlines, and a constant stream of confused employees looking for answers. This chaos is often the result of condensed communication — trying to deliver complex benefits information within a short enrollment window — and outdated delivery methods that fail to meet employees where they are.
Benefits literacy tools change that dynamic entirely. By providing year-round education, real-time answers, and interactive plan comparisons, these solutions ensure employees enter the enrollment period already informed. Instead of cramming benefits education into a single week, HR teams can nurture understanding over months through short, digestible resources like videos, FAQs, and AI-powered chat support.
Open enrollment does not need to be chaotic. With benefits literacy tools, you give employees the knowledge to make informed, cost-effective decisions and free HR teams to focus on strategic priorities.
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