Understanding Health Care Benefit Options

Poor benefits decisions and understanding may have made employees vulnerable to costly medical expenses, according to Aflac’s 2013 Open Enrollment Survey. The survey found that seven out of 10 workers (71%) already admit they only sometimes or rarely understand the changes to their health care policies each year, but 90% annually continue to elect the same coverage. The wide-ranging changes anticipated by employers this open enrollment season—and by 30% of workers, who expect it will be more difficult to understand their entire policy—point to a greater potential this year for enrollment decisions that will leave workers struggling to cover themselves financially.

“Workers will contend with three major factors this enrollment period, including employers’ increasing adoption of high-deductible health plans, scaled down benefit plans and increasing premiums,” said Audrey Boone Tillman, executive vice president of corporate services at Aflac. “All of these changes require workers to pay even closer attention and have a full understanding of the benefit plans being offered to them. Not doing so may put them at high risk for higher deductibles, co-pays or gaps in coverage that can result in unmanageable out-of-pocket costs if an emergency occurs.”

As average annual worker-contributions for family health insurance coverage have increased by 89% from 2003 to 2013, and more than half of companies (53%) have already adopted a high-deductible health plan, the amount of health insurance and medical costs that employees must pay themselves continues to grow. Yet, according to the survey, workers will be at financial risk if they fail to carefully review their employer-sponsored plans. For example:

• Fifty percent of employees agreed that $25 is the maximum increase to their monthly health insurance premium that they can handle financially;
• Eighty-three percent of workers are willing to spend only up to $1,000 for their health insurance deductible each year;
• Four out of 10 employees will have to cut expenses elsewhere to cover the difference if monthly premiums increase; and
• Twenty percent of employees will trade down on their benefits package, accepting decreased coverage to get a lower premium.

In addition, nearly half of employees surveyed (46%) said that they have less than $1,000 in savings for medical expenses.

The survey was conducted online among 2,001 U.S. consumers in August by Research Now on behalf of Aflac.