Employers not confident in employees' health plan understanding

Employees lack clear understanding of their health plan choices, and just 10 percent of employers are very confident that their employees do understand their health insurance offerings.

So say a survey and white paper from HSA Bank. Although 75 percent of employers are “somewhat confident,” according to HSA Bank, that’s not really a vote of confidence. In fact, the report suggests that a top priority for HR professionals should be “raising employee confidence in plan selection through more effective education.”

Since the choices employees make when selecting a health plan can have such far-reaching effects on their physical and financial health, it’s essential that they make the best choice they can—but they often fail to do so. Some of the reasons for poor choices include uncertainty about plan cost-sharing amounts, fear of a high deductible or out-of-pocket maximum and lack of plan evaluation.

Related: Millennials struggle to understand health plans

And while some prefer to pay more up front in order to have a lower deductible or out-of-pocket maximum, others would rather pay less up front with a higher deductible or out-of-pocket maximum. But they don’t necessarily understand how such choices will affect the other parts of a health plan. HSA Bank says in the report that “the total estimated annual cost of medical services (covered and out-of-pocket) should be the most determinative factor when selecting a health plan; this is a better representation of actual annual healthcare expenses.”

But only 17 percent of employers agree, with 33 percent of HR executives saying that the copay amount is the most important element when choosing a health plan and 27 percent saying that a low deductible or out-of-pocket maximum is most important.

And employees can be clueless when judging such factors, with some opting for a low deductible even when choosing a high deductible instead could have saved them money overall while delivering the same services.

Part of the problem is that employees don’t necessarily take enough time to evaluate health plan choices, with 80 percent spending less than an hour doing so—and 57 percent spent less than a half hour doing so—during their last open enrollment period. And 93 percent stick with what they know, making the same choices year after year in medical, dental and vision coverage.