Employers More Confused about Coverage than Ever

One of the biggest challenges for employers who offer their workers health insurance benefits is that the majority of U.S. workers are really in the dark about how insurance works, according to a new survey.

Despite employers’ best efforts to provide as much education as possible to their workers before and during open enrollment, it seems the finer points are not sinking in, according to United Healthcare’s “Consumer Sentiment Survey.”

Here are the main findings:

  • A mere 7% of those surveyed had a full understanding of all four basic insurance concepts: plan premium, deductible, coinsurance and out-of-pocket maximum.
  • More than 60% of respondents could define plan premium and deductible.
  • 36% could define out-of-pocket maximum.
  • 32% could define coinsurance.

These deficiencies result in more people spending more on coverage than they may actually need to.

Another study, carried out earlier this year by the Kaiser Family Health Foundation, concluded that not having the correct information can lead to dissatisfaction when employees discover they’ve signed up for a plan that doesn’t meet their needs.

The Kaiser survey revealed that employees are most confused when it comes to understanding these factors:

  • How to calculate out-of-pocket costs once health insurance claims are processed.
  • The concept of providers who are in network vs. out of network at an in-network hospital.
  • Understanding deductibles and out-of-pocket annual limits for their plans.
  • What a health insurance formulary is (concerning prescription coverage amounts).

What you can do

So, as open enrollment nears, you may want to consider focusing on the foregoing areas to better educate your workers. Also, it’s recommended that you approach the education process with a multi-pronged approach employing technology, meetings and the offers of one-on-one time to cater to people’s different learning styles.

It’s important for your employee morale and their pocketbooks that they understand what their choices are and what they’re buying. The more light you can shine on the process and the more stress you can reduce, the better off your employees will be.

This is especially true in light of one other finding in the United Healthcare study: One-fourth of respondents said they would rather file their annual income taxes than select a health plan.

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