Americans could use some work when it comes to understanding how benefits work.
A new study by Guardian Life, which surveyed 1,200 benefits managers and 1,700 employees, finds less than half of workers can correctly identify at least 8 out of 10 true or false questions about benefits.
The questions quizzed workers on their knowledge of different types of insurance products, such as medical, long-term disability, accident, critical illness and hospital indemnity insurance, as well as policy features, such as long-term disability elimination periods, deductibles and portability.
On the 10-question quiz, the average worker answered correctly 7.2 times. Twenty-five percent of respondents got eight questions right and 24 percent answered correctly nine or 10 times.
Nineteen percent of respondents got less than six answers correct. According to Guardian, that qualified them for a big, fat F.
Generally, the older people get, the more they know about benefits. Surprisingly, however, more of those classified as late-boomers (15 percent) got Fs on the quiz than early-boomers (9 percent). Nineteen percent of Gen Xers and 25 percent of millennials flunked.
Unsurprisingly, respondents are most familiar with medical insurance, which is by far the most common. Eighty-six percent of quiz-takers answered a question about medical insurance deductibles, for instance.
Employees are far less knowledgeable about less-common types of policies. Only 43 percent correctly identified the following question about critical illness insurance as false: “Payouts can reimburse caregivers for lost income.”
Similarly, just over half correctly answered that the following claim about disability insurance is true: “Elimination period is the waiting period before collecting benefits.”
Other studies show that many Americans — particularly young workers — have a poor grasp of basic health insurance concepts, such as premiums, deductibles, co-pays and coinsurance.
Ignorance of insurance policy details may have been less dangerous back when it was common for employers to shoulder nearly all of the cost of health insurance for employees.
But now companies are not only shifting a greater share of the cost of insurance onto workers, but they are shifting a greater share of the decisions about health care to workers. Employees increasingly are being asked to choose their own health plan design, often through private health insurance exchanges. Hopefully, as they make those decisions, they will be better-informed.