Employees need more help when choosing their health plan, according to a new study commissioned by Justworks and conducted by The Harris Poll.
Adults surveyed often didn’t understand the differences between their plans, couldn’t define health plan terminology that would help them assess costs and risks, and were confused about critical savings vehicles like HSAs and FSAs. Alongside this confusion is frustration: more than half surveyed said they weren’t getting the most out of their health insurance options.
Robust benefit decision support is necessary to mitigate confusion, help employees avoid costly plan choice mistakes, and increase benefits and job satisfaction.
Five key findings:
1. Employees want help choosing a plan. And they want it to be personalized.
Most employees know they aren’t getting the most from their health benefits (53 percent) and they want help. Nearly three quarters (72 percent) said they want to be told which health insurance plan will best cover their unique needs. Personalized decision support tools show employees the right coverage based on their specific medical and pharmacy needs (in Decision Doc, employees can model different scenarios, so they can confidently choose the right plan for them).
Not only are employees seeking advice, but they’re also looking for it from a neutral third party. Nearly half of employees (44 percent surveyed) aren’t comfortable asking their HR team enrollment questions, highlighting the need to partner with an unbiased decision support vendor.
2. Employees continue to misunderstand and miss out on the value of HSAs
With an attractive triple tax advantage, health savings accounts (HSAs) help employees save for medical expenses now and in the long term. Yet, despite increased focus on education from many employers, these powerful savings vehicles remain misunderstood and underutilized. The survey illustrated multiple common and costly confusions:
- Over half (59%) of respondents didn’t know that HSAs are tied to High-Deductible Health Plans (HDHP)
- Respondents confuse HSAs with Flexible Spending Accounts (FSAs). They believed, incorrectly, that your HSA dollars disappear after a year or if you change jobs (something true of the FSA). At the same time, 75 percent of adults think they can keep their FSA if they change jobs—a value reserved for the HSA.
When employees don’t understand HSAs, they are less likely to choose HSA-eligible plans and often won’t fully utilize the HSA when eligible—missing out on significant cost savings. Personalized decision support helps employees understand the value of the HSA by highlighting how it can support their specific health needs. Robust tools allow for custom messaging and deep-dive education modules that go beyond the math to generate a deeper understanding of when and how to use HSAs.
3. Employees need more support around basic health plan terminology
Choosing the right health plan requires understanding numerous terms and rules. And understandably, many Americans are confused. The term, deductible, continues to flummox people, with over half surveyed (54 percent) incorrectly defining it as how much your insurance will pay for various health services. Younger employees, especially, struggle with terminology misunderstandings.
Another recent study from Forbes Advisor echoes ongoing confusion, finding that 77 percent of respondents misunderstood coinsurance, and almost half didn’t understand copays or deductibles.
Robust decision support should embed education about health insurance terminology throughout the user experience, so employees can easily understand what they are comparing. Decision Doc includes live agent support because we’ve found that walking employees through the different terms builds understanding and encourages agency.
4. Employees continue to overbuy health insurance
Misunderstanding how their plans work (e.g., health insurance terms, and how to use an HSA) leads to costly mistakes. Numerous studies have found that employees often overbuy health insurance because they fear the high deductible associated with lower premium plans. The survey confirmed this, with nearly half of respondents (49 percent) saying they felt pressured to select the most expensive insurance to ensure adequate coverage.
Decision support helps employees understand which health plan is right based on their specific needs, so they feel comfortable choosing a lower premium plan when it’s the right fit. By helping employees optimize their health plan choice, Decision Doc saves employees upwards of $1,300 a year on health care costs.
5. Informed employees = happier employees
Helping employees choose the right plan can build morale, attract new talent, and increase retention. Seventy-eight percent of respondents say that health insurance that “meets their specific needs” is a priority when job hunting. Personalized decision support’s purpose is to do just that: help employees choose the plan that best covers their specific needs. From a retainment perspective, 63 percent of employees said that their company’s health insurance offerings influence whether they want to stay there. And 64 percent say that good health insurance is worth sacrificing some pay.
If employees don’t understand the benefits you offer, they can’t appreciate them. Decision support cuts through the confusion so that your employees understand and get the most from the benefits you offer.
Schedule a 30-minute demo and see the difference Decision Doc can make this open enrollment season.