Benefits that require employees to pay upfront for expenses and wait for reimbursement can be out of reach for employees who are living paycheck to paycheck. For example, employees face a “double hit” when using dependent care flexible spending accounts (DCFSAs), because they have to set aside pretax dollars for childcare expenses and then pay out of pocket before getting reimbursed. You can make these accounts more accessible to financially struggling employees by facilitating direct payments to childcare providers or providing DCFSA-linked debit cards.²⁰

Consider how you might reduce the number of decisions people have to make or options they have to consider when selecting their benefits. Too many options can lead to choice overload, which in turn can lead to inaction. In the retirement arena, for example, participation in 401(k)s has been shown to be higher in plans with fewer investment options (in this study, the plans did not include auto-enrollment).²¹ Avoid jargon; show that benefits are for “normal” people, not the experts.

In the retirement arena, auto-enrollment and auto-escalation have resulted in dramatically higher plan participation and savings rates.²² Features like these help to overcome present bias, which can prevent employees from contributing to their 401(k) plans despite a desire to save. These innovations are now being applied to encourage employees to build short-term savings, with promising results. Defaults can also help simplify choices to guide decision making; one common example is presenting a default contribution rate when employees opt into a retirement plan.

Low-wage workers, in particular, might think that benefits are not for “people like them,” particularly benefits like 401(k)s where the payoff isn’t until far in the future. Leverage the behavioral principle of social proof by using personas and examples to demonstrate how the benefit is meeting needs and providing value for “employees like them.” Make sure your communications reflect diversity consistently across design, messaging, and activities, including but going beyond representations of class, race, ethnicity, gender identity, sexual orientation, and ability to reflect a diverse range of needs and life stages.

One proven approach is to require active choice during benefits enrollment. In the retirement context, the power of active choice has been demonstrated to dramatically increase plan participation in the absence of auto-enrollment.²³ It works by helping employees overcome procrastination by bringing their goals to mind when making a choice – in this case, to save for a secure retirement. Pre-commitments, such as inviting people to make an advance commitment to direct a portion of future pay increases to savings, can also encourage people to follow through on their goals by reducing present bias.

For example, providing information about the risks of borrowing against one’s 401(k) or embedding a referral to a financial coach into the process of requesting a loan might help your employees consider alternatives in times of immediate need. In the retirement arena, simplifying the 401(k) enrollment process has been shown to significantly increase plan participation.²⁴

For example, use anchors to nudge people toward financially healthy behaviors; in one study, simple messages in emails about a company’s 401(k) plan that referred to arbitrarily high or low contribution rates were shown to significantly impact how much people actually saved.²⁵ Planning prompts and reminders, such as strategically timed messages that leverage the fresh start effect can also encourage employees to set and follow through on financial goals. Framing employer benefits such as a 401(k) match as leaving money on the table can take advantage of loss aversion to help shift employees’ focus from the reduction in their take-home pay to the loss of the benefit if they do not participate.

On-the-job responsibilities can prevent workers from using their benefits more fully. Providing time and resources (such as access to a computer) during work hours to understand benefits can help, especially for employees who may only have access to the internet via a smartphone at home. Using nontraditional channels to communicate with employees in the field, such as text, can also make it easier for them to use their benefits.

Some employees, particularly low-wage workers, may be hesitant to lock themselves into a decision that reduces take-home pay and therefore limits their flexibility to deal with the unexpected in the future. Remind employees that benefits can be adjusted to accommodate specific major life events, and commit to helping them navigate these complexities when their needs change. Be sure to point out any benefits that can be adjusted at any time, even outside of qualifying life events.

Don’t leave employees struggling to access benefits information; make it clear where they can go with questions or if they need help. Consider other accessibility needs in addition to disability. For example, make supportive resources available during extended hours for employees with significant caregiving responsibilities. Signal that accessibility concerns and questions are welcomed, expected, prioritized, and will be met with solutions.

Employees’ most pressing questions are often about their most sensitive topics, involving information they fear could impact how they are treated by their employers. Create impersonal ways to address personal questions. This could include offering employees the ability to anonymously submit questions ahead of an information session, or presenting the questions and answers of other employees as FAQs.

When employees perceive a lack of management support for financial health benefits, they may be less likely to use them. Even the complexity of benefits enrollment can breed suspicion, especially for groups that have experienced historic disenfranchisement and discrimination. Clear the air in your benefits communications; acknowledge where things aren’t easy, and show that your goal as an employer is to help employees effectively employ their benefits. This could include regularly reminding employees about unused benefits, or providing information about how to get more out of benefits like HSAs, in concrete dollar terms.

On-site managers are often the first (and, in some cases, the only) point of contact that frontline workers have with human resources. Training and equipping them to help employees understand and navigate the financial health benefits and programs available to them can go a long way toward promoting effective engagement.

It may not be your employee who makes key financial decisions in their household, but a spouse or other family member. For this reason, you might consider providing printed materials that employees can bring home with them, in addition to company intranet sites or other on-the-job channels. Providing time for employees to ask questions about benefits outside of work hours can create opportunities for family members to participate directly in benefits decision making.