Employee Benefits
HR & Compliance
Technology
Wellness
PEO Solutions
Every open enrollment season, employees are faced with the critical decision of choosing a healthcare plan that best fits their needs. However, research shows that most employees select plans that don’t align with their actual healthcare utilization, leading to higher costs for both employees and employers.
At Benely, we believe that benefits education and smart decision-making tools are key to helping employees make the right choices—without feeling overwhelmed. In this guide, we’ll explore why employees often select the wrong plans and four ways employers can improve the decision-making process.
Why Do Employees Choose the Wrong Healthcare Plan?
Despite advancements in healthcare technology, there has been little innovation in helping employees answer one fundamental question:
“Which benefits plan should I enroll in?”
Without proper guidance, employees often:
🔹 Choose higher-premium, low-deductible plans thinking they’ll save money, only to underutilize them.
🔹 Fail to consider total cost exposure, including deductibles, out-of-pocket maximums, and copays.
🔹 Guess their healthcare utilization for the next year, leading to miscalculations in plan selection.
📊 A study from Carnegie Mellon found that most employees choosing a low-deductible plan would have saved up to 42% in annual premiums with a slightly higher deductible option—without sacrificing healthcare quality.
So, how can HR teams help employees make informed decisions? Here are four key strategies.
1. Use Technology to Make Data-Driven Plan Recommendations
One of the biggest reasons employees struggle with benefits decisions is that plan selection often feels like a guessing game. Most employees:
- Lack historical claims data to make informed choices.
- Are unsure how much coverage they’ll actually need.
- Default to plans they perceive as the safest, even if they’re not cost-effective.
💡 The Solution: Personalized Plan Selection Tools
Using technology-driven decision-support tools, employers can help employees compare plan options based on their actual healthcare needs.
For example, AI-powered enrollment tools analyze an employee’s past claims data and future expectations to recommend the most cost-effective plan. One well-known example is Alex by Jellyvision, which asks employees a series of questions about their health needs and risk tolerance before providing a personalized plan recommendation.
✅ How Benely Helps:
At Benely, we work with employers to implement smart decision-support tools that:
✔ Help employees visualize their total healthcare costs.
✔ Offer side-by-side comparisons of plan options.
✔ Provide customized recommendations based on expected utilization.
This data-driven approach ensures that employees select plans that truly match their healthcare needs—saving both them and their employer money.
2. Rebrand Your Healthcare Plans to Reduce Bias in Selection
The naming of healthcare plans can have a huge impact on employee choices. If one plan is labeled “Gold” and another “Bronze,” most employees will assume that Gold = better, even if the Bronze plan is a better financial fit.
🚨 The Problem: Misleading Plan Names
When employees see hierarchical plan names, they tend to:
- Gravitate toward the highest-tier plan, assuming it offers the best coverage.
- Overlook cost-effective options that still meet their needs.
- Misinterpret metallic-tier plans (Gold, Silver, Bronze), which actually refer to cost-sharing structures, not quality.
💡 The Solution: Neutral Plan Naming & Clear Guidance
Instead of using tiered names, consider neutral labels like:
- Balanced PPO (for mid-tier plans)
- Flex Choice Plan (for HDHPs with HSAs)
- Essential Care Plan (for lower-premium options)
✅ How Benely Helps:
We help companies redesign benefits communication strategies so employees can evaluate plans based on:
✔ Who benefits most from each plan, rather than just choosing based on name.
✔ Total cost comparisons that include premium, deductible, and out-of-pocket expenses.
✔ Clear, unbiased descriptions of plan features.
By rebranding plan names and educating employees on real cost implications, companies can steer employees toward smarter choices—without forcing them into one option.
3. Simplify Your Benefits Guide for Better Engagement
For many employees, open enrollment feels like homework. Benefits guides are often filled with jargon-heavy explanations, making it difficult for employees to fully understand their options.
🚨 The Problem: Overwhelming & Complex Benefits Materials
- Employees skim through lengthy documents without absorbing key details.
- They struggle to differentiate between key terms like deductible, coinsurance, and out-of-pocket max.
- Many default to last year’s plan because they don’t want to navigate the complexity.
💡 The Solution: A Clear & Engaging Benefits Guide
To make benefits easier to understand, companies should:
✔ Highlight plan changes from the previous year to make it easy to see what’s new.
✔ Use simple, real-world examples to explain deductibles, copays, and out-of-pocket maximums.
✔ Incorporate visuals, infographics, and video content to improve engagement.
✔ Provide side-by-side comparisons of plans for easy decision-making.
✅ How Benely Helps:
At Benely, we help employers redesign benefits guides by:
- Eliminating confusing jargon.
- Creating easy-to-digest plan summaries.
- Offering interactive comparison tools for employees to explore different scenarios.
A well-structured benefits guide ensures that employees feel empowered—not overwhelmed—during open enrollment.
4. Keep Communication Open and Offer Year-Round Support
Even with the best tools and guides, employees still have questions about their healthcare plans—and not just during open enrollment.
🚨 The Problem: Limited Benefits Support for Employees
- Employees may forget what they learned during open enrollment.
- They struggle to understand how to use their benefits throughout the year.
- HR teams often lack the bandwidth to answer every benefits-related question.
💡 The Solution: Continuous Communication & Support
- Host interactive Q&A sessions before and after open enrollment.
- Offer open office hours for employees to discuss their plan options.
- Send regular reminders about benefits throughout the year (e.g., preventive care reminders, HSA contribution updates).
- Provide access to a dedicated benefits advocate for one-on-one support.
✅ How Benely Helps:
At Benely, we provide:
✔ Year-round benefits support, not just during open enrollment.
✔ Access to benefits experts who can guide employees through complex healthcare decisions.
✔ Ongoing communication strategies to keep employees informed about their benefits.
By offering continuous education and personalized guidance, employers can ensure that employees are confident in their healthcare choices—not just during enrollment, but all year long.
Final Thoughts: Helping Employees Make Smarter Benefits Choices
Most employees don’t have the tools or knowledge to choose the most cost-effective healthcare plan for their needs. This results in higher costs for both employees and employers.
By taking these four steps—leveraging decision-support tools, rebranding plan names, simplifying benefits guides, and providing ongoing support—HR teams can help employees make smarter benefits decisions while reducing costs.
Looking for expert guidance?
At Benely, we help businesses optimize their benefits strategy by providing clear, data-driven solutions that improve employee decision-making.
🔹 Want to ensure your employees are choosing the right plans? Contact us today to learn how we can help! 🚀
