When your employees don’t understand their health plans, it can cost them — and you.
According to a recent survey, 96% of Americans said they knew the meaning of 4 common health insurance terms that relate to out-of-pocket (OOP) costs — deductible, coinsurance, copay, and out-of-pocket-maximum.
But of those surveyed, only 4% actually knew the correct meaning of all 4 terms. And almost 1/3 of consumers don’t know what their health plan’s deductible and OOP maximum benefits are.
Clearly, there’s a knowledge gap between what people know and what they think they know. And when your employees act on false assumptions about their benefits, it can have many harmful effects—on their decisions to seek care, their financial well-being, and your bottom line.
Make sure that your employees understand their coverage. It can save you on costs, improve employee satisfaction, and increase employee retention.
1. Save on health care costs
When your employees know how their coverage works and what’s covered, you and your employees can reduce costs because:
- Your employees know the right ways to use their coverage. For example, they understand the importance of:
- Going to doctors who are in your plan’s network
- Getting approval from their health insurer for a procedure when needed
- Going to an urgent care center or retail clinic instead of the emergency department for a minor illness or injury (cold, sore throat, or sprained ankle)
- They get the right preventive care they need. Getting the right preventive care can catch health problems before they become more difficult and expensive to treat — and keep some health problems from occurring in the first place.
- They properly manage chronic conditions like diabetes or heart disease. Managing chronic conditions is critical to reducing the risk of complications and hospital admissions, which can be very costly.
2. Gain more satisfied employees
When your employees understand how their coverage works, they’ll know how to make the most of it. They’ll keep their out-of-pocket costs down. And they’re less likely to be surprised with unexpected charges.
There is a strong correlation between understanding benefits and employee satisfaction, according to a 2010 study. So helping your employees learn how their benefits work can actually lead to great satisfaction with their coverage—and their jobs.
To make the most of their coverage, your employees need to know things like:
- How their deductibles, copays, and coinsurance work
- How they can save on drug costs
- How extra charges can occur if they go out-of-network
And they need to know where to find important information about their coverage. Do your employees know the web address of their health plan’s website? Do they know how to use it to get the information they need and manage their coverage? Do they know where to go or whom to call when they have questions or concerns about their coverage?
Make sure they do. They’ll be happier with their coverage — and their jobs.
3. Help increase employee retention
According to a 2012 study, 61% of workers very satisfied with their benefits said they felt a strong sense of loyalty to their employer. Only 24% of those very dissatisfied with their benefits felt the same way.
So make sure your employees understand their coverage— that they know what’s offered and the value of their plan. It can lead to a healthier, happier, and more loyal workplace.
Tools to help you educate your employees
The right tools are essential to doing any job right. You can provide your employees with the tools to make the most informed health coverage decisions.
Check out these helpful resources that you can use to educate and empower your employees:
Health Plan Basics This article explains how deductibles, coinsurance, and copays work.
9 Ways Your Employees Can Save on RX Costs This article has tips that your employees can use to lower their prescription drug costs.