Health Insurance ‘Knowledge Gap’ Is Wider as Open Enrollment Processes

Many U.S. workers don’t understand the basics of health insurance and don’t know how to choose the right employer-provided health plan during the annual enrollment process, a new survey shows. As a result, they—and their employers—may be spending more money than they spend on health care.

Confusion still abounds around key terms like “deductible” and “co-pay,” while the functionality of health savings accounts (HSAs) and savings accounts (FSAs) is often shrouded in mystery.

Knowledge Gaps

Lack of understanding of health benefits can lead to uncertainty and stress during the recruitment process, according to HR software firm Justworks’.
Health Insurance Informationbased on a June 9-13 survey of 1,040 US adults who work full or part time.

More than half of working Americans (53 percent) do not feel they are getting the most out of the health insurance options they have. The same number (54 percent) do not know all the benefits of their health insurance.

“There is a huge knowledge gap in the understanding of the benefits and great educational opportunities,” said Elizabeth Sklar, manager, research and customer insights, at Justworks. “Given the current market conditions – inflation, wage tightening and recession – it is more important than ever that employees understand their benefits so they don’t miss out on potential savings.”

Younger working adults are more likely to answer incorrectly or be unsure about certain information about health insurance, such as the definition of the deductible, compared to adults aged 45-64.

Employees don’t know who to turn to if they have questions, and often fall back on choosing the same insurance each year, which can hinder employers’ efforts to increase enrollment by adding new plans or offering coverage at new rates, the survey found. showed.

Symptoms of cognitive disparity include:

  • 72 percent of workers involved in their health insurance decisions want someone to tell them what the best health insurance plan is because of their special situation.
  • 62 percent say they rarely change their health insurance choices from year to year because it is very difficult.
  • 49 percent feel pressured to choose the most expensive health insurance option making sure they have the support they need.
  • 44 percent say they don’t feel comfortable asking questions of their HR representatives in terms of registering for health insurance, while 47 percent said they call their friends or relatives to help them when registering for health insurance.

Additionally, nearly two-thirds (63 percent) say their company’s health insurance affects how much they want to stay there.

“It’s not just about what employers can offer, but how their employees engage with them,” Sklar said. “If employers can provide early guidance and training to their employees on how to choose the best benefits strategy, employers can help their employees and increase their chances of retaining talent.”

HSA and FSA Mix-Up

A soon
Forbes Advisor Survey of 2,000 Americans with similar health coverage show confusion about health insurance, with more than three-quarters of respondents unable to recognize the term “co-insurance” and nearly half misinterpreting “co-pay” and “deductible.”

When asked what they know about HSAs, a little more than 40 percent correctly answered that the HSA allows you to set aside money on a pretax basis to pay for eligible medical expenses or that the HSA can pay deductibles, co-insurance and co-pays.

Most of those who were asked, however, seemed to confuse HSAs and FSAs, and incorrectly said that you can set up an HSA with any health plan, you lose HSA money if you do not have a job in a year and that you lose your HSA if you exchange jobs. . This is true of FSAs, not HSAs.

“Approximately 30 percent mistakenly believe that not liking the current insurance plan or being diagnosed with a new medical condition will make a person eligible to change health insurance at any time. This is not the case,” wrote Les Masterson and Michelle Megna, insurance experts at Forbes. Advisor, a platform to help consumers make financial decisions.

Additionally, 20 percent thought that moving would help them change their health plan. “That can be accurate, depending on where the person is going,” Masterson and Megna said. “If you move out of state, you may be eligible to purchase a different health insurance plan. If you’re moving around the same state, you may not be able to switch health plans.”

Employee Training

A new report,

Health Literacy Goes Forward, Two Steps Back
, it shows that workers who struggle to choose and use their health care plans can do more harm to themselves—and their employers—than necessary.

The report is based on a survey conducted earlier this year by Optavise (formerly DirectPath), a benefit training, enrollment and health care provider, of 1,055 US workers with employer-sponsored health plans.

Sixty-two percent of respondents said they don’t always estimate costs before receiving treatment, which could mean paying more for medical services. Only 10 percent of respondents said they check whether a provider or facility is online every time their health plan changes.

The findings include respondents who want to know how to:

  • Avoid unexpected medical bills (39 percent).
  • Understand how their deductibles, co-pays/co-insurance and out-of-pocket costs workand how it affects what they pay (33 percent).
  • Review the statement of benefits (EOB) and medical malpractice charges (30 percent).
  • Investigate health care costs and why it matters (29 percent).

“From rising costs to more Americans facing medical debt, it’s important that consumers have the information they need to make informed health care decisions,” said Kim Buckey, vice president, customer services at Optavise.

Although new laws have come into effect to help reduce unexpected health care costs and increase transparency in the cost of health care services, he said, “laws alone are often not enough to reduce health care costs, especially because hospitals may not agree and consumers often may not agree. I don’t know that laws these are there.”

To ensure that workers are getting the support they need to improve their health skills and improve their finances, many employers are partnering with benefit educators to provide real-world training and online resources, Buckey said. According to Optavise research:

  • 53 percent of the workers surveyed said their company has created resources online, from 41 percent in 2021.
  • 26 percent said employers offered workshops and group sessions that benefit from teachers and external resources, up from 22 percent in 2021.
  • 24 percent gave one-on-one conversations with these external factors, from 16 percent in 2021.

“It’s encouraging that workers want to increase the amount of their health education to improve their financial situation,” Buckey said. “However, many employers need to do something,” he said, by providing accurate, timely and consistent information to employees about how to choose and use their health plans, “so that they and the company – do not spend too much money on health care services.”