Most employees don’t understand their health insurance … even if they think they do! That means they probably aren’t selecting the healthcare plan that best meets their needs.
Are they paying for the most expensive plan which they might not need and are wasting money, or are they selecting the cheapest plan to save money that won’t meet their physical and emotional needs?
Whatever the answer is to that question, neither one is good. And let’s face it, selecting benefits shouldn’t be that stressful. It should be empowering.
But a new study, Health Insurance Knowledge Snapshot, commissioned by Justworks and conducted by Harris Poll, found it’s often not empowering. Many employees experience a lot of stress during open enrollment time because they aren’t sure what to do and they wish someone would help them pick the health insurance that’s right for them.
Employees don’t understand
Eighty-two percent of more than 1,000 employed adults responded to the survey, saying they feel they are knowledgeable about the health enrollment process, and 39% feel they’re very knowledgeable. Yet despite these high levels of self-reported knowledge about health insurance, many respondents misunderstood basic facts:
- 75% either believe or aren’t sure they can keep Flexible Spending Accounts (FSAs) even if they leave their current job
- 62% either believe or aren’t sure they can make changes to their health insurance plan or dependent coverage mid-year after enrolling
- 59% don’t realize they can only enroll in a Health Savings Account (HSA) if they’re enrolled in a High-Deductible Health Plan (HDHP), and
- 54% either believe or aren’t sure if a deductible is how much your insurance will pay for various health services.
“The study shows us that there is a major knowledge gap in benefits understanding and a huge opportunity for education,” said Elizabeth Sklar, Manager, Research & Customer Insights at Justworks. “With the current market conditions (inflation, the tightening of salaries and potential recession) it is more important than ever that employees understand their benefits so as not to miss out on potential cost-savings.”
Who to turn to?
Not only do employees not understand their benefits, but they’re also not sure who to turn to if they have questions. Due to that, the majority pick the same healthcare coverage every year. This undermines employers’ efforts to improve employees’ health insurance by adding new plans or offering coverage at new price points.
So why don’t they reach out to HR? Because they’re anxious. Forty-four percent said they’re uncomfortable asking HR reps questions about health insurance enrollment. Instead, 47% ask their friends and family about what health insurance plan they should sign up for during open enrollment.
This in turn causes employees to miss out on new benefits offerings and get incorrection information from people who aren’t knowledgeable about their company’s plans.
Despite a little less than half saying their uncomfortable asking HR, 72% said they just want someone to tell them what the best health plan is for their unique situation.
To bypass all this confusion, 49% just select the most expensive option so they’re guaranteed to have the coverage they’ll need … even if they don’t need it.
“Providing employees with guidance about health insurance terms and plan selection upfront, ensures they have what they need even if they don’t realize they have a question, or even if they are uncomfortable asking the question,” said Sklar. “Employers should start educating their employees early, especially before open enrollment season. That way, when the time comes to choose health insurance, the process is less stressful for employees.”
And it’s a good idea to hold special groups education sessions for workers 44 and under because they’re less knowledgeable about health insurance and less clear on what their plans offer them.
Health insurance also plays a role in retention. While all HR pros know we’re still in the Great Resignation, the study found that health insurance benefits outweigh pay as a priority in most cases.
Seventy-eight percent said that having health insurance that meets their specific needs is something they look for in a new job, and 64% are willing to sacrifice a little pay for better insurance. In addition, nearly 63% indicated the type of insurance they have influences their willingness to stay at their company.
“HR teams have the opportunity to take action based on their employees’ feedback and implement educational experiences on health benefits right from onboarding, with refreshers to the wider team ahead of open enrollment,” said Sklar. “Investing in providing employees the guidance they need in advance, and without being asked, can go a long way in helping employees have the best possible enrollment experience.