Long Island Employers: Ancillary Benefits Confusion Costs You
62% of employees feel confused by ancillary benefit options, leading to low participation rates. Digital platforms boost participation by 35% while clear communication prevents wasted benefit dollars on unused coverage.
Your employees are confused by your ancillary benefits, and it's costing you money. A 2026 survey reveals that 62% of workers feel overwhelmed by supplemental coverage options like dental, vision, and disability insurance due to industry jargon and complex explanations.
For Long Island business owners investing thousands in these benefits, low participation rates mean zero return on investment. When employees don't understand or use their coverage, you're essentially paying for benefits that provide no recruitment or retention value.
The Real Cost of Benefit Confusion
The numbers tell a stark story. While you're budgeting for comprehensive ancillary packages, 71% of workers demand upfront cost details like monthly premiums, deductibles, and out-of-pocket expenses that many employers fail to provide clearly.
This confusion creates three immediate problems for small businesses:
- Wasted premium dollars: Employees who don't understand their benefits won't use them, making your investment worthless
- Higher turnover: Workers who feel confused about benefits are more likely to view compensation packages negatively
- Increased liability: Employees making uninformed benefit choices may blame employers when coverage doesn't meet expectations
Digital Solutions Drive Real Results
The solution isn't cutting benefits—it's improving communication. Digital enrollment platforms boost participation rates by 35% through mobile-friendly tools, side-by-side comparisons, and personalized recommendations that speak to employees in plain English.
Instead of explaining short-term disability as "income replacement for qualifying medical events," successful employers use real examples: "Covers 60% of your salary during a 6-week recovery from surgery." This approach transforms abstract insurance concepts into concrete financial protection.
For 2026, employers should also prepare for shifting enrollment patterns. The end of expanded ACA subsidies on December 31, 2025, may drive more spouses and dependents back to employer plans, increasing demand for comprehensive ancillary coverage that employees actually understand.
New Opportunities for Smart Employers
Several 2026 changes create advantages for employers who communicate benefits effectively:
- Enhanced FSAs: Dependent care FSA limits increased to $7,500 (up from $5,000), providing real value for working parents
- Expanded HSA telehealth: First-dollar telehealth coverage now allowed, making high-deductible plans more attractive when properly explained
- Trump Account Contributions: Starting July 4, 2026, employers can contribute up to $2,500 per employee tax-free through cafeteria plans
These enhancements only provide value if employees understand them. Clear communication tools and educational resources help transform these technical changes into meaningful employee benefits.
Practical Steps for Long Island Employers
Don't let benefit confusion undermine your investment. Focus on three immediate improvements:
Simplify your language. Replace insurance jargon with real-world scenarios. Show employees exactly what they'll pay and what they'll receive.
Provide cost transparency. Create comparison charts showing monthly costs, annual deductibles, and typical out-of-pocket expenses for common scenarios.
Invest in digital tools. Mobile-friendly enrollment platforms with live chat support reduce confusion and increase participation rates significantly.
Remember that upcoming deadlines affect your planning timeline. ACA reporting requirements (Forms 1094/1095) are due to employees by March 2, 2026, and the PCOR fee of $3.84 per covered life is due July 31, 2026, for self-funded plans.
Benton Oakfield's digital enrollment platform eliminates the confusion that's costing Long Island employers thousands in wasted benefit dollars. Our mobile-friendly tools and plain-English explanations ensure your ancillary benefit investment actually drives employee satisfaction and retention. Our enrollment specialists handle the education process so your employees make informed decisions that maximize your benefit ROI.
Compliance Note: Benefit plan rules and tax implications vary based on company size and location. This summary is for informational purposes only. Please contact your Benton Oakfield representative to review how these changes impact your specific plan documents.
