How do we know if our employee benefits are being used effectively?

Employers invest significant resources in employee benefits, so it's reasonable to ask whether that investment is making a meaningful difference.

But determining whether benefits are being used effectively isn't as simple as identifying which programs have the highest participation rates or the most claims.

Different benefits serve different purposes, and understanding those differences is essential to evaluating their value.

Does low utilization mean a benefit isn't valuable?

Not necessarily.

Some benefits are designed to provide financial protection against circumstances that employees may never experience.

Life insurance and disability insurance are good examples. An employee may go years without making a claim, but that doesn't diminish the importance of the protection available if a serious event occurs.

In these cases, low claim activity isn't necessarily a problem.

Other benefits, such as telehealth services, employee assistance programs, or wellness resources, may be intended for more frequent or accessible use.

When those benefits have consistently low participation, it's worth understanding why.

The important question isn't simply how often a benefit is used. It's whether the benefit is serving its intended purpose.

Why might employees not use available benefits?

There are several possible explanations.

Employees may not know the benefit exists.

Benefits programs often include services that receive little attention during open enrollment. Employees may be unaware of resources already included in their coverage.

Employees may not understand how to access it.

Knowing that a benefit is available doesn't always mean knowing how to use it. Unclear instructions, unfamiliar enrollment processes, or difficulty finding information can discourage participation.

The benefit may not reflect employees' needs.

A benefit that appeals to one workforce may be less relevant to another. Employee demographics, family circumstances, financial priorities, and workplace culture can all influence participation.

Employees may face barriers to using it.

Cost-sharing requirements, limited provider availability, scheduling challenges, or other practical obstacles can affect utilization.

The benefit may simply not have been needed.

Some programs are most valuable during particular life events or circumstances. Limited use may be entirely appropriate.

Understanding the reason behind low utilization is more useful than assuming the benefit isn't worthwhile.

How should employers evaluate benefit utilization?

A thoughtful benefits review considers several factors together.

Enrollment and participation

Which benefits are employees selecting? Are participation rates changing over time? Are employees taking advantage of options that are relevant to their circumstances?

Available utilization information

Where appropriate aggregate data is available, how frequently are employees using certain services or programs?

For some fully insured arrangements, detailed utilization information may be limited. Employers should work with the information their carriers and administrators can appropriately provide.

Program costs

What is the employer investing in each benefit, and how does that investment compare with its intended purpose?

Cost matters, but it shouldn't be evaluated without considering the protection or service being provided.

Employee feedback

Do employees understand the benefit? Do they find it useful? Are there barriers that make participation difficult?

Employee surveys and feedback can reveal issues that utilization reports alone won't explain.

Alignment with workforce needs

Does the benefit support the organization's recruitment, retention, and employee well-being objectives?

A benefit may be well designed but no longer reflect the needs of a changing workforce.

What should employers do when a benefit is underutilized?

The answer depends on why participation is low.

Sometimes, employees simply need better information about what's available and how to use it.

In other situations, the benefit itself may need attention.

Possible responses include:

• Improving employee education and awareness.
• Making enrollment or access instructions easier to follow.
• Reviewing whether the benefit design creates unnecessary barriers.
• Reconsidering employer contribution arrangements.
• Evaluating alternative programs or vendors.
• Replacing a benefit that no longer serves the workforce effectively.

The goal shouldn't be to eliminate every benefit with low utilization.

Instead, employers should understand what each benefit is intended to accomplish and whether the investment remains appropriate.

How does MPOWR help?

At MPOWR, we help employers evaluate their benefits programs beyond the number of plans and products they offer.

We consider employee participation, available utilization information, costs, employee feedback, and how individual benefits fit within the broader benefits strategy.

We also look for opportunities to improve awareness and access before recommending that an existing benefit be replaced.

Sometimes the right answer is better education. Sometimes it's a change in plan design or funding. And sometimes a different benefit may offer a better fit for the workforce.

Our objective is to help employers make informed decisions about where their benefits dollars are going and what those investments are accomplishing.

A well-designed benefits program isn't measured by how many benefits it offers. It's measured by how effectively those benefits serve the organization and its employees.