What 1000s of Open Enrollment Questions Reveal About Employee Benefits Confusion
Open Enrollment (OE) can be an overwhelming experience for employees and their families. Even with weeks of webinars, FAQs, and reminders from HR, many still start OE unsure about their benefits—what’s offered, what’s changing, and what it means for them. And when employees start OE confused, it often leads to suboptimal plan choices, underutilized benefits, and unnecessary workload for HR down the line.
That’s why it’s been so exciting to see our customers and their employees using Carly, Avante’s AI agent that offers real-time benefits guidance, during this year’s OE. We’ve been able to watch how people use Carly to ask questions, look for guidance, and get clarity on topics that are often confusing or easy to misinterpret. Across thousands of questions this year, we’ve seen firsthand just how much hidden confusion exists beneath the surface during OE.
Benefits terminology is challenging—and alarmingly so. One oft-cited survey by the Kaiser Family Foundation (KFF) asked working-aged adults about basic health insurance terms and found that only 4 % answered all ten items correctly; and nearly 30 % answered 4 or fewer correctly (1). This indicates that many people who need to select or use benefits aren’t confident with the foundation of how plans work, which can translate into big financial consequences.
To understand where employees were getting stuck, we analyzed questions from the most recent 10 days of Open Enrollment across all customers. Because OE dates vary by employer, this window captured activity from early, mid, and late enrollment periods. We used our own AI to flag questions that showed signs of confusion, focusing specifically on conceptual confusion — when someone misunderstands how a benefit works — rather than operational issues like logging in or finding a document. What we found was really interesting. While the majority of questions were straightforward information-gathering (for example: “How many telehealth visits are included in the plan?”), about 5% of all questions exhibited signs of genuine confusion about key benefits concepts.
You might think “5% doesn’t sound too bad”. But it’s a critical component of questions.
Why the 5% matters: the true costs of employee benefits confusion
At first glance, 5% might sound small. Yet it’s an important signal — because these are the moments when someone starts from a reasonable place and ends up slightly off track:
“Can I have an HSA if my spouse is on a different plan?”
“Can I use my FSA for premiums?”
“Why can’t I change my plan mid-year if my doctor moved?”
“Does parental leave come out of my PTO balance?”
These questions matter because they represent points where misunderstanding meets decision-making—and that’s where the real risk lies.
Those small misunderstandings compound fast — especially in self-funded environments, where small employee decisions directly influence employer medical costs.
1. Hidden confusion
That 5% is just the visible tip of the iceberg. Employees are still building their benefits literacy and may not even know what to ask. For every person who asks a confusing question, there may be several more who remain silent, unsure where to begin.
2. Savvier users are the ones asking
The employees using AI for benefits questions may tend to be the more engaged or proactive ones. If they are experiencing conceptual confusion, it suggests even deeper uncertainty among less-engaged employees—those least likely to seek clarification before making a choice.
3. Confusion leads to costly choices
When people misunderstand the basics, they make decisions that can cost them. For example, research of public-employees found that switching to a financially dominant health plan — yet still often avoided — could save an individual $150 to $1,400 per year. At the same time, other analyses estimate that up to 40% of employer-sponsored benefits value goes unused annually due to lack of awareness or understanding. The cost of confusion adds up — to employees in higher out-of-pocket expenses, and to employers in under-utilised benefits spend.
Where employees get most confused about their benefits
Most confusion clustered around four topics: HSAs, FSAs, medical eligibility, and leave policies.
HSAs: Employees often asked about who qualifies and how contributions work—treating the HSA like something you “sign up for” rather than a tax vehicle tied to a specific plan type.
FSAs: Questions tended to be about boundaries and interactions—“Can I roll over my balance?” or “Can I have both an FSA and an HSA?”—showing that people grasp the basics but struggle with the fine print.
Medical coverage & eligibility: Many assumed coverage rules followed common sense—“Can my spouse stay on my plan after divorce?” or “Can I switch plans midyear?”—not realizing how strictly policy defines eligibility.Leave and time off: Employees often mixed up categories like parental leave, disability, and PTO, expecting them to come from one shared pool. The issue wasn’t entitlement—it was structure.
Why confusion matters and what HR leaders can do about it
Because when benefits rules live deep in policy documents or compliance tables, people start to fill in the blanks with intuition — and intuition is often wrong in this space. And when HR can’t see the confusion as it’s happening, they can’t intervene before employees make misinformed decisions that drive costs and dissatisfaction.
With Carly, benefits leaders can know in near–real time which topics generate confusion, how many employees are asking them, and can tailor educational outreach accordingly. Instead of waiting for the annual engagement survey, you can spot “confusion hot-spots” during OE. This level of real-time visibility gives HR a completely new advantage: the ability to close knowledge gaps before they turn into support tickets or costly plan choices.
What’s more, Carly doesn’t just supply a “yes/no” answer—it offers a digestible explanation built for adult learners: snackable, on-demand, at the point of query. No more waiting for the benefits team to respond to the inbox. This shifts the employee experience from “flying blind” to “in-flight clarity”. And because Carly is embedded directly into the systems employees already use—Slack, Teams, HCM, email—there’s no new portal to learn and no change management burden.
Open Enrollment shouldn’t be a guessing game. And the same patterns we see during OE show up all year: during life events, plan changes, and moments when employees need clarity most.
With real-time intelligence and personalized guidance, employers can finally shift from reactive support to proactive benefits leadership — turning clarity into a strategic advantage all year long.
Sources:
Norton, M., Hamel, L., & Brodie, M. (2014). Assessing Americans’ Familiarity With Health Insurance Terms and Concepts. Kaiser Family Foundation. https://www.kff.org/affordable-care-act/assessing-americans-familiarity-with-health-insurance-terms-and-concepts/
Brooks, C., & Hamman, M. (2018). Suboptimal Decision Making in Health Plan Choices. University of Wisconsin–Madison, Center for Financial Security.
SEB Administrative Services Marketing Team. (2024). Breaking Barriers: How to Maximize Employee Benefits Utilization for Real Impact. SEB Administrative Services Inc.https://seb-admin.com/blog/breaking-barriers-how-to-maximize-employee-benefits-utilization-for-real-impact/
