How to Improve Employee Benefits Utilization
Employers invest thousands of dollars per employee in comprehensive benefits packages and then watch a significant portion of that investment go unused. A significant share of employees don't fully understand their benefits, and preventive care utilization falls well below benchmarks at many organizations.
The question isn't whether your benefits package has value. It's whether your employees know how to access it.
Employee benefits utilization is an active management problem, not a plan design problem. The four strategies below address the real reasons utilization falls short — and what to do about each one.
1. Make Benefits Communication Specific, Not Comprehensive
Most benefits communication fails because it's written for benefits professionals, not employees. Your workforce doesn't need to understand insurance mechanics. They need to know what to do in the situations they actually face.
Replace plan summaries with scenario-based guidance:
"Having a baby? Here's your step-by-step checklist."
"Feeling stressed? Your EAP covers six free therapy sessions, completely confidential."
"Annual physical due? Book through the app. Cost to you: $0."
Then segment the communication. If 40% of your workforce enrolled in HDHPs, send HDHP-focused education to that group only. Don't send the same message to everyone — employees stop reading when content isn't relevant to their plan.
And keep communicating after open enrollment closes. The employer who sends one benefits email in November and goes quiet until next October has, functionally, stopped managing their benefits program. Employees need reminders when life events happen, not just when policies renew.
2. Tie Incentives to Specific, High-Value Behaviors
Financial incentives work when they're connected to specific actions — not to generic participation in a "wellness program."
The most effective approaches link rewards directly to the decisions that move utilization:
HSA contributions for completing preventive screenings.
Premium discounts for using telehealth as the first point of care rather than urgent care or the ER.
Contribution matches or gift cards for employees who complete annual physicals or chronic disease management programs.
The principle behind all of these is immediacy. A $25 reward this week changes behavior more reliably than a $100 premium reduction at the next renewal cycle. Design incentives so the connection between the action and the reward is direct and fast.
One specific opportunity many employers miss: telehealth adoption. If your telehealth platform is underutilized, the cost math is straightforward. Telehealth: $0. Urgent care: $150. ER: $1,200. FAIR Health's Telehealth Tracker shows telehealth utilization rising steadily — employers who actively promote it see meaningfully higher adoption than those who rely on passive awareness. An incentive that drives even modest telehealth adoption pays for itself quickly.
3. Remove the Steps Between Employees and Their Benefits
Every additional step between an employee and a benefit they need creates friction that lowers utilization. This isn't a technology problem — it's a design problem. Technology is only useful if it reduces friction rather than creating it.
What that looks like in practice: employees want to find their benefits, understand their costs, and access care without logging into three different portals or calling a number that puts them on hold. Single sign-on, real-time cost estimates before care, and appointment scheduling inside the benefits platform all reduce friction at the moment of decision.
But the technology choices themselves matter. Not every point solution delivers what the vendor promises, and not every platform integrates cleanly with how your workforce actually accesses information. Part of a benefits advisor's job is evaluating these tools against your specific employee population — not recommending whatever the carrier bundles in — and tracking whether adoption is actually happening after implementation.
If a technology you're paying for isn't being used, that's a signal worth acting on, not waiting until renewal to address.
4. Build a Culture Where Using Benefits Is Normal
Utilization data reflects culture as much as communication. Employees look to leadership for signals about what's actually acceptable, not just what's officially permitted.
Managers who openly discuss their own benefits usage — taking mental health days, using parental leave, scheduling annual physicals — give employees permission to do the same. That's not a policy announcement. It's behavior modeling, and it has a measurable effect on the decisions employees make.
Practical steps:
Train managers on how to have brief, normalized benefits conversations in one-on-ones. Not "here's your plan summary" — something closer to "have you looked into the telehealth option? I used it last month."
Share real employee success stories in internal communications. An employee who used the EAP during a difficult period, or who navigated a complex claim without a financial shock because they understood their HDHP, is a more effective message than any benefits guide.
Build benefits into onboarding beyond day one. New hires are most receptive in their first 90 days. A brief benefits refresher at the 30-day mark, when the choices start to feel real, lands differently than the day-one orientation packet.
Why Employee Benefits Utilization Gaps Persist
Low utilization isn't usually a benefits quality problem. It's a year-round management problem.
Most brokers show up at renewal, present options, and disappear. The employer is left with plans their employees don't fully understand, point solutions their workforce isn't using, and no mechanism to identify gaps before they become cost drivers.
The employers seeing the strongest ROI from their benefits programs aren't spending more. They're managing differently — treating utilization as a metric to monitor and improve throughout the year, not a byproduct of open enrollment.
One area where this pattern is especially visible: HSA participation. Data from the EBRI HSA Database shows that a significant share of HSA enrollees contribute below the annual maximum, leaving meaningful tax advantages unused. That gap doesn't close on its own — it closes when employers actively educate and remind employees throughout the year.
Making This Practical
Start with measurement. If you don't know your current preventive care utilization rate, your telehealth adoption percentage, or your employees' confidence scores, you don't know where to focus.
Three metrics worth tracking:
Preventive care visit rates. Industry benchmark is 3–4 visits per member annually. Rates below that predict higher downstream costs.
Avoidable ER utilization. If more than 30% of ER visits are non-emergent, there's a care navigation gap that targeted communication can address.
Benefits confidence scores. Survey employees quarterly: "Do you understand how to use your benefits?" Scores below 70% identify a communication problem, not a plan design problem.
Once you have those numbers, the interventions are straightforward. High ER use gets a telehealth campaign. Low preventive care rates get a scheduling push. Low confidence scores get targeted education by plan type.
That's active management. That's how utilization improves.
That's not just better HR management. That's better business.
BSP partners with employers to build benefits communication strategies that drive real utilization. Learn more about how BSP works, or schedule an introductory call to talk through where your program stands.
