How Employers Can Incentivize Employees to Actually Use Their Benefits

Employers invest thousands of dollars per employee in comprehensive benefits packages, yet many struggle with a frustrating reality: low utilization rates. Recent research shows that only 58% of employees fully understand their benefits, and utilization rates for preventive care remain below 40% at many organizations. 

The question isn't whether your benefits package has value, it's whether your employees know how to access that value. Here are four proven strategies to drive meaningful benefits utilization. 

1. Simplify Benefits Communication 

Most benefits communications fail because they're written for benefits professionals, not employees. Your workforce doesn't need to understand insurance mechanics; they need to know what actions to take. 

Replace complex plan summaries with clear, scenario-based guidance: 

• "Having a baby? Here's your step-by-step checklist" 

• "Feeling stressed? These mental health resources are covered 100%" 

• "Annual physical due? Book through our app for $0 cost" 

Use multiple communication channels throughout the year, not just during open enrollment. Employees need reminders when life events happen, not just when policies renew. 

2. Create Financial Incentives That Drive Action 

Direct financial rewards work when tied to specific behaviors. Successful employers move beyond generic wellness programs to targeted incentives that address their workforce's actual health risks. 

Effective incentive strategies include: 

• HSA contributions for completing preventive screenings 

• Premium discounts for using telehealth services 

• Gift cards for participating in chronic disease management programs 

• Lower deductibles for employees who complete annual physicals 

The key is making rewards immediate and meaningful. A $25 gift card today motivates more than a $100 premium reduction next year. 

3. Leverage Technology to Remove Friction 

Every additional step between your employee and their benefits creates a barrier to utilization. Technology should eliminate friction, not create it. 

Focus on integration over innovation. Employees want single sign-on access to all benefits, appointment scheduling within their benefits app, and clear cost transparency before they commit to care. 

Consider these high-impact technology improvements: 

• Benefits decision support tools that recommend specific actions 

• Mobile apps with real-time claims tracking and cost estimates 

• Automated reminders for preventive care and prescription refills 

• Virtual benefits assistance through chatbots or telehealth platforms 

4. Build Benefits into Company Culture 

Benefits utilization increases when leadership demonstrates that using benefits is encouraged, not just allowed. This requires intentional culture building beyond policy announcements. 

Leaders who openly discuss their own benefits usage, taking mental health days, using parental leave, or participating in wellness programs, give employees permission to do the same. 

Practical culture-building tactics include: 

• Manager training on benefits conversations during one-on-ones 

• Success stories shared in company communications 

• Benefits "lunch and learns" featuring real employee experiences 

• Integration of benefits topics into new hire onboarding beyond day one 

Measuring Success Beyond Utilization Rates 

Track metrics that connect benefits usage to business outcomes. Monitor healthcare cost trends, employee satisfaction scores, and retention rates alongside utilization data. The goal isn't just higher usage; it's demonstrable value for both employees and the organization. 

Smart employers also survey employees about benefits barriers and satisfaction quarterly, not annually. This allows for mid-year adjustments that can significantly impact utilization. 

Making Benefits Work for Your Business 

Effective benefits utilization requires ongoing strategy, not just annual plan design. The employers seeing the strongest returns treat benefits engagement as a year-round priority, with dedicated resources and clear accountability. 

Your benefits package represents a significant investment in your workforce. These strategies help ensure that investment delivers measurable value for both your employees and your bottom line. 

Want help applying this? Let's talk.