Employers invest substantial time and money into employee benefits programs. Yet myths, misconceptions, and confusion may prevent employees from getting maximum and practical benefits from them. Effective communication and education can improve benefit utilization, employee satisfaction, and talent retention.
FSAs and Employee Satisfaction
Flexible Spending Accounts (FSAs) continue to be a popular benefit option. Yet, funds expiration at the end of each plan year is often misunderstood or forgotten.
Unspent funds remain accessible for a limited time through optional employer provisions, including a grace period and carryover. Still, 40% of employees forfeit some amount in their FSA each year, averaging between $339-$408 per employee.
This creates significant dissatisfaction among FSA users for obvious reasons. The best way to counter the incidence of forfeiture is frequent, targeted reminders about ways to spend down unused balances as well as account rules and deadlines.
HSAs and Employee Retention
Unlike FSAs, Health Savings Accounts are portable and owned by the employee. Even so, they can be used as an employee retention tool. That’s because, unlike FSAs, employers can contribute to employee HSAs, and many do in the form of contribution matching programs.
In addition to helping encourage employee savings, employer contributions to HSAs can give workers who may be looking elsewhere second thoughts about leaving their job for an employer who doesn’t offer similar assistance.
Communication and Education
Although FSAs and HSAs are highly beneficial benefit accounts, they are only as good as their utilization. That’s where communication and education are key. Regular, year-round education on account benefits and eligible expenses increases employee utilization and satisfaction, providing higher ROI on the employer’s benefit investment.
In a 2022 study, “BEAT: Benefits and Employee Attitudes Tracker,” LIMRA found that only 44% of employees think their employers communicate “well” or “very well” about benefits offerings, with more than a quarter saying their employers communicate poorly. Respondents indicated they want to receive benefits information more frequently. LIMRA concluded that more frequent and ongoing benefits communications yield a substantial ROI in terms of improved employee satisfaction and retention.
Tips for Success
With employee work lives spanning up to 50 years or more, it’s vital to consider how they may consume education and communication differently throughout their lives. Here are some tips for success:
- In-person meetings: While in-person meetings are perhaps not the most efficient medium, they are typically most effective for communicating with older employees.
- Digital communications: Younger employees may be more comfortable with digital communications, like social media, whereas middle-aged employees may appreciate email and blog articles.
- Year-round communications: Regular, year-round communication is essential to keep benefits information readily available and top-of-mind.
If the pandemic taught us one thing, it’s that employees need benefits that reflect employer support and concern for their overall well-being. Employers must pursue effective benefits education and communication strategies to maximize their investments in benefits programs.
DataPath Administrative Services has provided professional benefits administration services to Arkansas employers since 1996. To see examples of effective educational materials, please visit our Learning Center.