Employee benefits is a messy business.  An enormous range of factors affect the impact of benefits for both employers and employees.  For example, group health insurance costs can fluctuate based on employee behaviors and family history.  Did a few members of your team start smoking this year?  Or did a handful stop?  Did you just hire an employee with a hereditary likelihood of obesity?  Alcoholism?  Cancer?

As an employer, you have little or no control over some of these issues, and HIPAA laws make it difficult to gather this information about your workforce.  So even though you may have the best employee wellness program in the universe, your costs and claims may rise—along with your premiums.

That said, the data clearly says that things like wellness initiatives work, and create value—about $1.50 for every dollar spent.

Measuring employee engagement, happiness, health, and satisfaction is tricky because of the multitude of factors affecting each.  But there are direct costs that can be measured, and indirect costs that can be estimated, to create a formula called Benefit Dollar Leverage Ratio (BDLR).  Those wellness initiatives created a BDLR of 1.5.

Ancillary benefits represent a huge opportunity to bring value to your people.  For example, discount-provider Abenity estimates that its vendor deals create an average annual savings of about $4,000 per active user.  At $850/month for their most popular plan, these discounts cost an employer $10,200/year.  That means you need about 2.5 active users in your entire organization to break even.

So why doesn’t every employer use Abenity?  Because they have a hard time seeing and extracting the value.  Engagement rates for Abenity—despite the fact that their discounts cover virtually every category of spending a person’s life—can be as low as 5%.  Even organizations that really encourage using the platform see less than half (about 43%) of their people use the discounts.  And when most people do engage with Abenity, they are often buying things like movie and theme park tickets and missing out on the big savings.

Groceries, travel, car purchasing and maintenance, mortgages, home services, and retail—these are just some of the areas Abenity offers significant discounts.  Wouldn’t you like 10% off of Target.com?  But employees forget about the tool and this leaves employers wondering if it is worth it.  Consider this: if a 1,000-employee company got 50% engagement, they would save their people about $2,000,000 per year on a $10,200 benefit.  That’s a 196.1 BDLR without even factoring in the improvements in employee wellness, engagement, and satisfaction.

The issue is that most employers (and employees) are not coming close to realizing the potential of their benefits.  While employers can create massive value with these programs, the challenge of getting employees to understand and engage can destroy BDLR.

While most employees claim to understand their benefits, only 28% are very confident they are using their benefits to their fullest potential.  Some estimates put the actual number below 7%.  The problem is not value creation, it is value extraction.  Shifting focus from adding more to maximizing potential through guided service could unlock billions of dollars in value that employees cannot get anywhere else.