Steps to Help Your Employees Understand the Details of Their Benefits

Tell them real-life stories

This week I’m going to cover a small but very important tactical element of HR. Although it’s a small thing, it leads to a much larger strategic element of building a high-performing workplace culture

I’m a strong believer in delivering an amazing onboarding experience for employees. I built one at one employer from the ground up and I had the pleasure of  inheriting an outstanding one at another employer.

Today’s post is going to deal with one portion of the onboarding process – the Benefits discussion.  This is often the most confusing and boring part because HR typically comes in and goes through the insurance benefits using HR and insurance industry jargon. As a result, most employees don’t understand most of what is being said and just tune out and start looking at their phones. This is unfortunate because an organization’s benefits are an important and  critical piece of the total rewards program and employees need to fully be comfortable with understanding them.

I think employees really need to understand all of their benefits and there should be the appropriate amount of time put into the onboarding schedule to make sure employees really do fully understand them. We owe our employees the extra effort to help them understand their benefits rather than just handing them a packet of papers or just helping them logon to the onboarding site and leaving them with an hour to review and enroll.  

So here’s how I do it.

In my schedule, the benefits discussion occurs immediately after all the required hiring paperwork is completed. This way, they are still pretty fresh and enthusiastic.  I always go into the HR portion which includes the insurance and benefit portion of onboarding telling the new hires that this portion is going to be the most exciting and interesting part of the entire  process. I’m obviously being silly and I purposely exaggerate this because they and everybody else has experienced the opposite so it grabs their attention.

I then like to tell real-life stories about how the different benefits work. These are my stories based on my experiences and I’m certain you have your own story bank you can go to when communicating benefit details to your employee team.

For instance as I’m talking about the medical benefits, most people understand what the deductible means and how the co-pay plays into that but many don’t really understand what the Annual Max Out of Pocket means.

So I tell a real-life story about an employee (this was at a previous employer and whose identity I keep confidential) who had a heart attack while out camping with his family. He was life flighted to the hospital and had open heart surgery.  Well, when everything was said and done and the employee added up all the bills that came, the total was over $1,000,000. Fortunately for him and his family, the company health insurance plan had a maximum out of pocket of $3500.  What does this mean? Simple. The employee only had to pay $3500 total for the episode.. And this all happened in the summer so he had to continue treatment, cardiac rehab, and many other doctor appointments and because he reached his MOP, he paid nothing for the rest of the year. Every time I tell this story, I see clear understanding in the new hires’ eyes because this story always makes it obvious what the max out of pocket is.

Another story I like to tell is when describing the Employee Assistance Program (EAP). This benefit is very often forgotten and rarely used. I believe strongly in it as I’ve used it myself and tell the story of a couple employees I helped through substance abuse problems (again at a previous employer keeping names confidential).  

I had employees come to me asking for help with their substance abuse. They feared they would lose their job but my company believes in helping employees who ask for help. So I gave them all the EAP info and explained to them how the EAP works and strongly encouraged them to call and get the counseling help they need. I also explained that in addition to the free counseling sessions, our medical insurance has programs to help them clean up. They took advantage of these programs, cleaned themselves up, and remained good productive employees.

I love telling this story.

The last story I’m going to share this week is about the Flexible Savings Account (FSA). I tell them I love this benefit because it’s like an interest free, tax free loan to pay for medical related expenses like co-pays and deductibles. I tell them I usually max out the benefit and contribute the full $2600 and at the end of the year, if I have some left over, I treat myself to some very nice eye glasses and/or prescription sunglasses.  I also go back to the story above about the maximum out of pocket and tell them the heart attack employee had about $1600 left in his FSA and applied that to the MOP amount of $3500 he owed. So he only had to come up with $1900 for the entire cost of the episode.

There are, of course, other stories I tell to help our new employees understand the more complicated details of their benefits but I may share those at another time.. I always get positive comments from the new hires who appreciate me taking the time to sit down with them and going through the benefits we offer and explaining, through real-life stories, how they work.

Not only does this help them personally in understanding their benefits package, it sends the strong message that the organization sincerely cares about them and their well-being.  It’s an important element in the strategy of building that all important high-performing culture that we all strive for.