The open enrollment email arrives. An employee clicks through to the plan comparison, sees columns of deductibles, coinsurance and out-of-pocket maximums, and picks the same plan as last year because it feels like the safe choice.
It’s a familiar moment, and research suggests it’s an understandable one. Businesses put real money and thought into their benefits, yet much of that value depends on whether employees understand what they’re choosing and how to use it. With open enrollment season here for many employers, it’s a good time to look at how clearly your benefits are explained.
Why Benefits Are Hard to Understand
Health insurance in particular comes with its own vocabulary, and many people are less fluent in it than they think. In a widely cited 2013 study published in the Journal of Health Economics, researchers from Carnegie Mellon, Harvard and other institutions surveyed Americans with employer-sponsored health insurance. Most respondents said they understood basic terms like deductible and copay. When tested on four core concepts (deductible, copay, coinsurance and out-of-pocket maximum), only 14% answered all four correctly.
The gap shows up in more recent data too. A 2025 wave of MetLife’s Employee Benefit Trends Study, a nationally representative survey of 2,500 full-time U.S. employees, found that only 57% fully understand what their benefits cover.
None of this reflects a lack of effort or intelligence. Benefits involve unfamiliar terms and decisions that only come around once a year. Without clear explanations, even thoughtful employees end up guessing.
What Gets Lost When Benefits Don’t Make Sense
When employees don’t understand their options, they tend to play it safe. The Journal of Health Economics researchers point to earlier studies showing that people often stick with the coverage they had before, even when a better option is available, or choose based on advice from friends and family. That can mean paying more than necessary or ending up with coverage that isn’t the best fit.
There’s a workplace cost too. MetLife found that employees who understand and are satisfied with their benefits are 1.4 times more likely to feel engaged at work. A benefits package only builds that kind of goodwill when people know what it offers them.
How to Make Benefits Easier to Understand
Explain terms in everyday language. Define each key term once, in a sentence anyone could follow. For example: “Your deductible is the amount you pay for most covered care each year before the plan starts sharing the cost.”
Show real examples. Numbers make more sense attached to situations. Walk through what a routine doctor visit, a prescription or an urgent care trip would cost under each plan. The same research found that people estimated their costs far more accurately under a plan that was simpler to follow. You may not control how a plan is designed, but you can make the explanation as clear and concrete as possible.
Lead with what matters most. Open with the enrollment deadline and anything that’s changed since last year. Detailed plan documents can come next for those who want them.
Speak to different situations. A new parent and an employee nearing retirement will care about very different parts of the package. MetLife found that 72% of employees want benefits communication tailored to their needs. Even simple sections like “If you’re adding a family member” can help.
Offer more than one format. Some people prefer a one-page summary, others a short video or a live Q&A. Giving employees a few ways to learn makes it more likely the information reaches everyone.
Make it easy to ask questions. Let employees know exactly who to contact, and give them enough time before the deadline to actually use that help.
Keep the Conversation Going After Enrollment
Benefits questions don’t stop when enrollment closes. They tend to come up when life happens, like a new baby or an unexpected trip to urgent care. A few short reminders throughout the year can help employees remember what’s available when they actually need it.
Managers can help too. They don’t need to be benefits experts, and they shouldn’t be advising anyone on which plan to choose. What they can do is mention enrollment deadlines in team meetings and point employees to the right person in HR when questions come up.
Benefits Only Help When People Understand Them
A thoughtful benefits package is an important way a business shows it cares about its people. Clear communication is what lets employees see that care and put it to good use. A little extra effort in how you explain your benefits can help employees choose with confidence and get more value from what you offer.