Employees have difficult time with terms, understanding health care plan benefits

August 13, 2007

As the summer winds down, the days of going back to school may bring back vivid memories of classrooms, teachers and studying for exams. Remember being less than prepared as a pop quiz was being distributed? According to a recent survey, these types of memories could be reality for employees when the subject is health care coverage.

Many health care terms such as deductible, co-pay, ancillary services, annual maximum benefit amount, coinsurance and network are like the high school chemistry test for many employees: difficult to understand. While individuals in the HR and insurance field understand these terms, a survey by benefits firm Watson Wyatt found less than half of the employees surveyed are comfortable explaining common health benefit terms. Additionally, 43 percent of workers are challenged to understand their own health care plan coverage at all.

This provides a dilemma when explaining health care plans to employees. It becomes increasingly difficult to ask employees to be more responsible for health care when there’s a gap in language and terminology. Remember those difficult classroom days with confusing information flowing around? It’s time the teachers, in this case, HR and benefits personnel, slow down and provide health care literacy for employee’s better understanding.

A problem to solve on the chalkboard for some is what format to provide the information.

Another survey by Watson Wyatt found 46 percent of companies reporting benefit enrollments is via the web. While this seems to be a market trend, one of the surveys discovered that most employees like to receive communication on health care benefits in a print version, either mailed to their home or provided in face-to-face meetings.

Companies are leaning toward a change in information provided to employees. Several, 73 percent, are looking at putting in place a health care portal that provides employees with health improvement information and 65 percent offering total compensation information to employees via the web.

No matter what manner the information is provided, the question remains on what employees actually do with it. The survey found that 52 percent read all the materials provided during open enrollment. Three percent do not read any of the information and the remainder read either only what is required to enroll or only the information about changes to the plans.

Employee communication is a key factor for health plan enrollment and as many as 63 percent of employers ranked it as the top challenge. Another 36 percent stated engaging employees is the toughest part of the process. While better understanding by employees can empower them to become better consumers, employers are pressed to find the most effective way to provide the information in an understandable manner.

Employees are not sitting back either. Approximately 33 percent are requesting clear information to become further informed on health care choices, found in a survey by flexible benefits firm WageWorks. There were 28 percent that are requesting better information about costs and savings associated with health benefits, 15 percent wanting hands-on help from health and financial experts and 12 percent are looking for tools for health care expense management.

Employers should assume the role of teacher in communicating benefits terms. With the goal to increase employee engagement, allow employees to process the information and ask questions to increase knowledge. This will provide employees with the tools to make educated selections and graduate with honors, i.e., become better health care consumers.