Why is the communication of benefit information so important?

No matter how cost-effective a benefit and service program may be, the program is useless if employees are unaware of the opportunities it presents to them. A good communication program informs employees of how much the company is doing for them, allows employees to understand and make use of available benefits, and presents an opportunity for the company to sell itself to the employees.

In addition, the communication process is extremely important in the event that any reorganization of the benefit plan is undertaken. Often the adjustment of an existing program involves the trading of prior benefits for new coverage. Effective communication becomes a major determinant in whether these benefit tradeoffs are perceived by employees as a positive attempt by the employer to enhance the compensation package. See What disclosures must be made to benefit plan participants at ¶40,370 for disclosure requirements imposed by ERISA.