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Abstract Organizations spend trillions of dollars per year on their employee benefits packages. One reason for this may be that benefits packages are key tools for organizations to signal their values. We draw on signaling theory to understand how employees interpret and react to healthcare benefits as a function of (1) benefit universality, (2) benefit political contentiousness, and (3) individual political orientation. We collect two cross-sectional studies that capture reactions to four healthcare benefits: cancer treatment, reproductive care, abortion-facilitation, and gender-affirming care benefits. We find healthcare benefits signal several underlying organizational qualities, including support for employee health and well-being. Signaling support for employee health and well-being was less closely fitted to abortion-facilitative benefits and gender-affirming care benefits compared to more universal and less contentious benefits (cancer treatment and reproductive care benefits), especially among political conservatives. Similarly, abortion-facilitative benefits and gender-affirming care benefits were evaluated less positively and seen as less important and of lower utility than cancer treatment benefits and non-abortive reproductive care benefits, especially among those who identify as politically conservative. The findings extend knowledge of how and why employee reactions to benefits may differ, test under-developed aspects of signaling theory (signal fit, features and individual differences that modify fit), and inform organizational practice regarding benefit offerings.