Every employee benefit pro experiences at least one nightmare open enrollment at some point in their career. And almost always the nightmare is due to miscommunication and lack of comprehension. And what is more difficult to communicate and comprehend than employee benefits tax terminology?
Pre-tax, after-tax, tax-advantaged, tax-deferred, tax-exempt, tax-favored, tax-free, tax-qualified, tax-savings... These are all tax terms benefit pros routinely use to describe the important features of various benefit plans. Some of these terms have the same basic meaning, making them especially difficult to comprehend. And all of these terms use the one word that most workers know little about—“tax.”
Avoiding Tax Terms
Probably the best way to communicate the tax features of workplace benefit plans without using tax terminology is to:
- Call them money-saving or cost-reducing features,
- Illustrate these features using simplified examples