Why smart employees make poor benefits decisions—and what to do about it
You’re surrounded by smart, talented people. Whether they’re developing software, leading projects, or managing budgets, they’re making complex decisions every day. And yet, research shows that even the brightest people struggle to select the right health benefits for themselves and their families. Faced with a confusing decision, your employees may default to coverage options that aren’t best for their situations—selecting “top” (read: expensive) plans under the assumption they’re the best for everyone or opting for a high-deductible plan due to lower monthly premiums despite an ongoing condition.
But why? As it turns out, there are more than a few good reasons.
To attract and retain top people, companies often present benefits packages that have lots of choices and flexible options. While in theory this would allow each person to customize a plan to his or her exact needs, people tend to get overwhelmed by the number of choices available and find it impossible to research each option thoroughly. Similarly, only a small percentage of people really grasp the complexity of plan cost levers such as deductibles, co-pays, and maximum out-of-pocket (MOOP/OOPM) costs, so they may not know how to pick the plan that’s right for them.
Real-world examples can help showcase how different plans work—include situations like a planned pregnancy, an unexpected sports injury, or ongoing treatment of a chronic condition so your people can understand what their responsibility would be in each situation.
Even as more and more resources for health insurance education pop up, confusion about what all that language actually means persists. And as soon as someone feels comfortable with some language, new options pop up.
Give your people benefits information in plain, straightforward language, and consider offering glossaries at your Open Enrollment information sessions.
Translating benefits to costs
A 2013 study respondents to calculate the costs they would be responsible for if they spent four days in an in-network hospital for a procedure that cost $100,000 and had not incurred previous health care costs that year. Only 11% could answer this question correctly.
Again, provide real-world examples in your plan overviews (or ask your carrier to!) to help your people conceptualize what they may be responsible for if they experience a health concern.
45% of people would rather clean their bathroom than research their health benefits
More information, more satisfaction?
Do you need to give your people more detailed information so they can make better choices? Not really. In a 2015 Harris Poll, more than half of insured people expressed that they found dealing with health benefits to be a hassle. In fact, given a choice, many people would rather do nearly anything rather than research their health benefits—a 2018 study revealed that 45% of people surveyed would rather clean their bathroom!
Employees often don’t feel comfortable or empowered in making their own health benefit decisions. Metlife’s 17th Annual U.S. Employee Benefit Trends Study showed that only 4 in 10 employees felt their employers’ benefits communications were easy to understand—so it makes sense that only half of all employees felt confident that they made the right benefits decisions during Open Enrollment. But, according to a 2018 Aflac survey, employees are 45% more likely to buy insurance if it’s recommended by a benefits professional—so make sure your employees have access to your benefits team when they’re making their decisions, and make sure your benefits team is up to speed on all the options available.
So what can you do?
We put together some tried-and-true ways to make this year’s Open Enrollment your most effective and engaging yet. Check them out, and share your favorite Open Enrollment tips and tricks with us on LinkedIn and Twitter.