Confused Workers Face Crucial Decisions During Open Enrollment

While open enrollment season is closing in, the knowledge gap is widening among workers, which may result in inadequate or financially risky benefit choices, according to an Aflac survey Seventy-one percent of American workers only sometimes or rarely understand the changes to their policies each year, yet 90% choose the same coverage every year. Thirty-seven percent say it will be harder to understand everything in their policy this year.

Workers will contend with three major factors this enrollment period:

1. Employers’ increasing adoption of high-deductible health plans.
2. Scaled down benefit plans.
3. Increasing premiums.

The survey also reveals the following about employees:

• 50% say that $25 is the maximum monthly increase to their health insurance premium that they are able to cover.
• 83% are only willing to spend up to $1,000 for their health insurance deductible each year.
• 40% will have to cut expenses elsewhere to cover the difference if monthly premiums increase.
• 20% will trade down on their benefit package, accepting decreased coverage to get a lower premium.
• 46% have less than $1,000 in savings for medical expenses.

Sixty-eight percent of employees say they have made mistakes during open enrollment. Fifty-four percent of workers waste up to $750 because of benefit mistakes they have made during open enrollment. Additionally, 74% of workers only sometimes, rarely, or never understand everything covered by their health care policy.

In order to avoid mistakes, employees need to educate themselves about what their insurance plans actually cover and carefully review policy changes each year.

Aflac offers these tips:

• Prepare: Be aware of annual insurance policy changes and compare your new benefit package to your policy from the year before. Make sure that all of the health insurance costs you’re responsible for are within your budget. Also, review the deductibles and other out-of-pocket costs for health care services and pharmacy purchases you’ll be responsible for paying to ensure your plan offers the coverage you need.

• Don’t make assumptions: If your company hasn’t made any material changes to its health insurance plan since health care reform legislation was passed in 2010, it may be exempt, for now, from offering widely discussed essential health benefits, including free preventive services. Ask your HR manager if your policy options changed to include new benefits made available by health care reform.

Check your spouse’s benefit package: Your employer doesn’t have to offer insurance to your spouse and as costs increase, more companies are cutting this option. Even if your employer does offer your spouse insurance, the company is not obligated to pay anything toward the premium. If your spouse has access to employer-sponsored health insurance through his or her job, it may make the most financial sense to purchase two individual policies as opposed to one family policy.

Consider supplemental coverage, but don’t double up: Health care reform legislation requires plans in the individual and small group markets to offer essential health benefits like pediatric vision care and dental and chronic disease management services. Check all aspects of your major medical plan so you know what is covered and what isn’t. Consider supplemental insurance, such as accident, hospital or critical illness plans to help reduce rising health care expenses.

Examine premium costs carefully: Cheaper isn’t always better, since plans with the lowest monthly premiums likely mean you’ll pay more in co-insurance and get less coverage.

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Last Updated 01/11/2022

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