Communicating Benefits: Helping Employees Understand What They Have

A benefit only helps if people understand it. A dental plan nobody enrolls in, a retirement match employees don't know about, or an employee assistance program whose phone number is buried in a drawer all cost money without doing much good.

This guide is about the communication side of benefits: how to turn required documents into something employees can use, when to talk about benefits, and how to protect your team from scams that copy benefits messages. It is general information, not legal or tax advice. The formal disclosure rules are covered in our Rules and Compliance guides; here the focus is on being understood.

Start with the documents you already have

Federal rules already require plans to hand employees a lot of information. Treat those documents as the backbone of your communication, not the whole of it.

• Summary plan description (SPD). The Department of Labor's Reporting and Disclosure Guide for Employee Benefit Plans (December 2022) calls the SPD "the primary way to inform participants and beneficiaries about their plan and how it operates," and says it must be written for an average participant. The guide says participants generally receive it within 90 days of becoming covered.
• Summary of material modification. When a plan changes, the same DOL guide says participants are generally told within 210 days after the end of the plan year in which the change is adopted.
• Summary of benefits and coverage (SBC). For health coverage, the Centers for Medicare and Medicaid Services (CMS) describes the SBC as an easy-to-understand summary that uses plain language and includes "coverage examples" showing how a plan would cover care in common scenarios, along with a uniform glossary of terms such as "deductible" and "co-payment."

These documents are accurate but long. Your job is to help employees find the parts that matter to them, and to point back to the official documents whenever there is a question about details.

Build a benefits calendar

Benefits communication works best on a predictable rhythm. A simple calendar might include:

1. New-hire onboarding. Walk through every benefit, what it costs the employee, deadlines to enroll and where documents live.
2. Open enrollment. Explain what is changing, what isn't, and what employees need to do (or not do).
3. Retirement plan windows. If you sponsor a SIMPLE IRA, the IRS says employees get an annual election period of at least 60 days to change their contributions and must receive notice beforehand. If you sponsor a safe harbor 401(k), the IRS says eligible employees must receive a written notice of their rights and obligations under the plan.
4. Life events. Marriage, a new child, a move or a spouse losing coverage are natural moments to remind people of their options.
5. Mid-year check-ins. A short reminder about lesser-used benefits, such as an EAP or a health FSA balance, can prevent surprises.

Write for the average employee

The DOL's standard for an SPD, written for an average participant, is a good test for everything you send.

• Lead with what the employee needs to do and by when.
• Use concrete examples. Instead of "the plan offers an employer match," show what the match would add for a sample salary, and make sure any example matches your actual plan terms.
• Define terms the first time you use them, or point employees to the uniform glossary, which CMS says insurers and group health plans must make available on request.
• Keep one-page summaries short, and say clearly that the official plan documents control if anything differs.
• Show the full value. Consider a yearly statement listing what the company spends on each employee's benefits, so people can see pay and benefits together.

Reach everyone on your team

A message that only reaches office staff misses people on the floor, on the road or on night shifts. Use more than one channel: a short meeting, a printed handout, an email and a posting where people actually take breaks.

Language matters too. The DOL disclosure guide notes that SPD rules include provisions for foreign language assistance when a portion of plan participants are literate only in the same non-English language. Even where that rule isn't triggered, offering translated summaries or a bilingual contact can help more people use what you offer.

For retirement plans, the DOL guide says disclosures can be provided on paper or electronically if the administrator follows the department's electronic disclosure rules, and participants keep protections such as the right to request paper copies or opt out of electronic delivery. Ask your plan provider what applies to each of your plans before going paperless.

Protect employees from benefits scams

Open enrollment emails, payroll changes and tax forms are exactly the kind of messages scammers imitate. The Federal Trade Commission warns that scammers use email or text messages to try to steal passwords, account numbers or Social Security numbers. Its advice: if a message seems to come from a company you deal with, contact that company using a phone number or website you know is real, not the information in the message.

Employers are targets too. The IRS describes phishing emails aimed at businesses that try to steal Form W-2 data, and tells businesses that receive one to report it to phishing@irs.gov with "W-2 scam" in the subject line.

Practical steps:

• Tell employees in advance how you will and won't contact them about benefits, such as "We will never ask for your Social Security number by text."
• Use one official place for enrollment links and documents, and say so in every message.
• Ask employees to verify any request to change direct deposit or beneficiary information by calling a known number.

Tell people where to get help

Make it easy to ask questions. List a named internal contact, the insurer's or plan administrator's member services number, and outside resources. The Department of Labor's Employee Benefits Security Administration has benefits advisors employees can contact through its Ask EBSA service. For questions about an insurance company or agent, your state insurance department can help.

Finally, listen. A short anonymous survey after open enrollment, asking what was confusing, will tell you what to fix next year.

Key takeaways

• Required documents like the SPD and SBC are the foundation; your job is to make them findable and understandable.
• A predictable calendar, covering onboarding, open enrollment, retirement plan windows and life events, keeps benefits from being forgotten.
• Write for the average employee: actions and deadlines first, concrete examples, defined terms.
• Use several channels and languages so every employee gets the message.
• Warn employees about phishing and tell them exactly how you will contact them.

Sources

• U.S. Department of Labor, EBSA, Reporting and Disclosure Guide for Employee Benefit Plans (December 2022)
• Centers for Medicare and Medicaid Services, Summary of Benefits and Coverage and Uniform Glossary
• Internal Revenue Service, SIMPLE IRA plan
• Internal Revenue Service, 401(k) plan overview
• Federal Trade Commission, How To Recognize and Avoid Phishing Scams
• Internal Revenue Service, Report fake IRS, Treasury or tax-related emails and messages
• U.S. Department of Labor, EBSA, Ask EBSA