Health Insurance ‘Knowledge Gap’ Is Wide as Open Enrollment Approaches


Many employees within the U.S. misunderstand basic facts about medical health insurance and remain unsure the right way to select essentially the most appropriate health plan offered by their employer during annual open enrollment, latest research shows. Consequently, they—and their employers—could also be spending greater than they need to on health coverage.

Confusion stays high around key terms resembling “deductible” and “co-pay,” while the workings of health savings accounts (HSAs) and versatile spending accounts (FSAs) are sometimes a mystery.

Knowledge Gaps

A lack of information about health advantages can result in uncertainty and stress during open enrollment, based on HR software firm Justworks’
Health Insurance Knowledge Snapshot, based on a June 9-13 survey amongst 1,040 U.S. adults employed full or part time.

Over half of employed Americans (53 percent) do not feel they’re getting essentially the most out of the medical health insurance options available to them. An analogous proportion (54 percent) do not know the total scope of what their current medical health insurance offers them.

“There’s a significant knowledge gap in advantages understanding and an enormous opportunity for education,” said Elizabeth Sklar, manager, research and customer insights, at Justworks. “With the present market conditions—inflation, the tightening of salaries and potential recession—it’s more vital than ever that employees understand their advantages in order to not miss out on potential cost savings.”

Younger employed adults usually tend to incorrectly answer or to be unsure about some basic facts about medical health insurance, resembling the definition of a deductible, compared with adults ages 45-64.

Employees are unsure about who to show to in the event that they have questions, and again and again they fall back on choosing the identical insurance every yr, potentially undercutting employers’ efforts to enhance the enrollment experience by adding latest plans or offering coverage at latest price points, the survey showed.

Indicators of this information gap include findings that:

  • 72 percent of employees involved of their medical health insurance decisions wish someone would tell them what the most effective medical health insurance is for his or her unique situation.
  • 62 percent say they do not often change their medical health insurance selections from yr to yr since it’s too stressful.
  • 49 percent feel pressure to pick out the most costly medical health insurance option to make sure they’ve the coverage they need.
  • 44 percent say they feel uncomfortable asking their HR representative questions about medical health insurance enrollment, while 47 percent say they call their friends or relations for help when enrolling in medical health insurance.

As well as, nearly two-thirds (63 percent) say their company’s medical health insurance offerings affect how much they wish to keep working there.

“It is not nearly what employers are capable of offer, but how their employees experience those offerings,” Sklar said. “If employers can offer pre-emptive guidance and education to their employees around the right way to select their best profit option, employers will higher help their employees and increase likelihood of talent retention.”

HSA and FSA Mix-Up

A recent
Forbes Advisor survey of two,000 Americans who’ve health coverage similarly shows confusion over medical health insurance terms, with over three-quarters of respondents unable to discover the term “co-insurance” and nearly half incorrectly defining “co-payment” and “deductible.”

When asked what they find out about HSAs, barely greater than 40 percent appropriately answered that an HSA helps you to put aside money on a pretax basis to pay for qualified medical expenses or that an HSA pays deductibles, co-insurance and co-pays.

Many respondents, nevertheless, looked as if it would confuse HSAs with FSAs and incorrectly said you’ll be able to arrange an HSA with any health plan, you lose HSA money if you happen to don’t use it in a yr and that you simply lose your HSA if you happen to switch jobs. Those are all facts about FSAs, not HSAs.

“Nearly 30 percent incorrectly believed that not liking a current insurance plan or getting diagnosed with a latest medical condition would make someone eligible to alter medical health insurance at any time. That is not the case,” wrote Les Masterson and Michelle Megna, insurance analysts at Forbes Advisor, a resource platform to assist consumers make financial decisions. 

As well as, 20 percent guessed that moving would allow them to alter their health plan. “That could possibly be correct, depending on where the person is headed,” Masterson and Megna noted. “When you move out of state, you are likely eligible to purchase different medical health insurance. When you’re just moving throughout the same area, you most likely won’t find a way to alter health plans.”

Educating Employees

A latest report,

Health Care Literacy Takes One Step Forward, Two Steps Back, indicates that employees battling selecting and using their health care plans can cost themselves—and their employers—greater than vital.

The report draws from a survey earlier this yr by Optavise (formerly DirectPath), a advantages education, enrollment and health care transparency firm, of 1,055 U.S. employees with employer-sponsored health plans.

Sixty-two percent of respondents said they do not at all times compare costs before receiving care, which could mean they’re overpaying for health care services. Only 10 percent of respondents said they check whether a medical provider or facility is in-network every time their health plan changes.

Other findings include survey respondents wanting to know the right way to:

  • Avoid surprise out-of-network medical bills (39 percent).
  • Understand how their deductible, co-pay/co-insurance and out-of-pocket maximum work, and the way it impacts what they pay (33 percent).
  • Review an evidence of advantages (EOB) and medical bill for errors (30 percent).
  • Research health care costs and why they matter (29 percent).

“From inflation to a greater variety of Americans facing medical debt, it’s critical that buyers have the knowledge they should make cost-conscious health care decisions,” said Kim Buckey, vp of client services at Optavise.

While latest regulations have gone into effect to
help curb surprise medical bills and to
increase price transparency for health services, she noted, “these regulations alone are sometimes not enough to scale back health care spending, especially since hospitals might not be in compliance and consumers generally have no idea that these regulations exist.”

To make sure employees receive the support they should increase their health care literacy and improve their financial wellness, more employers are partnering with advantages educators and providing virtual education and online tools, Buckey said. In response to the Optavise survey:

  • 53 percent of polled employees said their company has made online resources available, up from 41 percent in 2021.
  • 26 percent said their employers offered presentations and group sessions with advantages educators and out of doors resources, up from 22 percent in 2021.
  • 24 percent offered one-on-one conversations with these outside resources, up from 16 percent in 2021.

“It’s encouraging that employees wish to increase their health care literacy rates to enhance their financial situations,” Buckey observed. “More employers, nevertheless, must rise to the occasion.” A technique to do that, she said, is by providing accurate, timely and consistent information to employees on the right way to select and use their health plans, “in order that they—and the corporate—are usually not overspending on health care services.”


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