Benefits enrollment is often viewed as the finish line. HR teams work hard to get everyone signed up, and once the forms are in, the assumption is that the job is done.
For the employees using those benefits, the real challenge is just starting.
New industry data highlights a significant issue in healthcare. The Explanation of Benefits (EOB) that is supposed to provide transparency is instead creating confusion that harms employee morale and increases the workload of HR departments.
The Generational Divide
The makeup of the modern workforce is now multi-generational, and the needs of those employees are changing with it. Recent market research shows a significant gap in healthcare literacy across generations.
Data indicates that 70% of Gen Z employees have “low literacy” regarding health insurance terms. This is a much higher rate than older generations, who typically have literacy rates between 40% and 50%.
This does not mean young employees are disengaged. They want to use their benefits correctly, but simply cannot understand the complex jargon and codes used in carrier documents.
The Cost of Confusion
A member may receive a statement listing codes they do not recognize, making it difficult to discern if they owe money or not. This uncertainty often leads to inaction and often a delay in paying a bill. The fear of hidden costs may lead to avoidance of seeking further medical treatment.
This “benefits paralysis” creates specific problems for the employer:
- Higher Administrative Burden: Confused employees go to their internal benefits team for answers.
- Lower Trust: Employees may feel the carrier is hiding costs, reflecting poorly on the employer who chose the plan.
- Billing Issues: A lack of understanding leads to disputes between the employee and their providers.
- Medical Deterioration: Employees avoiding medical treatment for fear of hidden costs may ned up with worsening conditions that can lead to increased costs.
The Need for Better Education
Coverage does not equal clarity. If documents confuse employees, the perceived value of the benefits package drops. Although employers cannot redesign the automated letters sent by insurance carriers, they can control the support they provide.
Acknowledge that benefits documentation is difficult, especially for younger talent and take steps to improve the process and understanding. Improved benefits education through a good consultant helps bridge the gap, turning a confusing document into a manageable part of healthcare.
[1] Statistic on Gen Z Health Literacy (70% vs. 40-50%): Sourced from Corporate Insight, “Health Plan Monitor” research study (2025).
