Health insurance applicationGiven the lack of knowledge about basic health insuranceterminology, providing a cheat sheet that explains how health carecosts are covered might be useful for employees. (Photo:Shutterstock)

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Health insurance is an invaluable — and, for companies with 50employees or more, mandated — workplace benefit. But how impactfulis your company's group health insurance plan if employees don'tunderstand their coverage?

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Policygenius surveyed 1,500 American adults from October 1to October 3, 2019 and found that health insurance continues to bea difficult topic to understand, even for those who are employedand ostensibly receive workplace coverage.

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Related: Employees want more help understanding their healthcare coverage

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Moreover, more than one in four people (27.2 percent)have avoided care or treatment because they wereunsure of what was covered by their plan. The percentage was stillsignificant (19.8 percent) among higher-income earners.

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What can you do to make sure your employees know what's covered?The best way to combat uncertainty is through health insuranceeducation and awareness.

Understand the pain points

According to the survey, many Americans are confused about basichealth care facts and fundamental health care costs. For instance,only two-thirds of people with health insurance knew what a premiumwas. A little more than half (58 percent) were able to properlydefine deductible, and only 48 percent were able to correctlydefine copay.

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People were also unaware of the ten essential health benefits covered by theAffordable Care Act—an overwhelming 87 percent didn't knowwhat benefits, like hospitalization, ambulatory services and mentalhealth care, were required by law.

How to help employees make sense of their options

Given the lack of knowledge about basic health insuranceterminology, providing a cheat sheet that explains how health carecosts are covered might be useful for employees. A basic glossaryof terms and examples can go a long way in helping peopleunderstand what they're expected to pay for.

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These terms are the foundation for understanding healthinsurance, and once employees know what the terms mean, they'll bebetter equipped to understand plans and choices. You could evenstart with an informative training session where you explain theessential benefits (like preventive services) covered by each plan,and how these services are typically free.

Make the summary of benefits accessible

Although most people with employer coverage know they havehealth insurance, they may still be unclear about how theirspecific plan works. While insurers offer plan details online,reading through them is time-consuming and tedious. If possible,posting an informational brochure and the shorter "summary ofbenefits sheet" on your company's intranet could promote healthcare literacy.

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Additionally, at the explainer meeting mentioned earlier,demonstrate how employees can find out more information on theirown. Knowing how to check the insurer's formulary to see whatprescription drugs are covered or how to search for a preferreddoctor's in-network status are tools employees can useindependently to better understand their coverage and individualneeds.

Give extra pointers and tips

Speaking of provider networks, consider giving employeesadditional background or secondary primers. For instance, there aredoctors that are often out of network, like mental healthpractitioners and anesthesiologists who are often contractors. Manypeople also confuse in- versus out-patient care and may need someto hear clarifying examples.

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Once you've covered the basics, you can delve into the details.The Policygenius survey shows that about 33 percent ofpeople aren't aware of a few other important aspects of the healthcare law, including the fact that children can stay on theirparents plans until they are 26 or the investment opportunitiesprovided by an HSA.

Explain relative costs

Employees might not be aware of all the costs they can expect toencounter. Cheaper health insurance premiums might seem attractiveto employees, but when plans are provided by their workplace, theprice difference (and savings) between the different tiers of plansmight not actually be as high as imagined. It might be helpful topoint out the relative costs of individual non-group plans becausemany people with workplace coverage may not understand how muchthey're saving with employer-subsidized health insurance. While noteverything will be applicable to everyone, it's important toincrease their knowledge.

Use multiple forms of communication

Employees might continue on their health care education journeywith a blitz of company-wide information sessions with both humanresources and the insurance provider. Hosting multiplecommunications over multiple platforms both during and leading upto open enrollment can increase the outreach potential. Requiringmanagers to discuss these benefits packages with their team membersat one-on-ones or weekly meetings could also give employees theopportunity to voice any concerns in-person.

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Many companies use an instant messaging platform, which could beespecially useful in answering questions directly and providing acasual yet communicative forum for questions and answers. At theend of the day, it's not likely that an employee will be upset thattheir workplace was extra insistent on helping them understandtheir health care.

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Elissa Suh is a personal finance andinsurance expert at Policygenius in New York City. She previously workedin television research and written about film for IndieWire, MUBI,and Paste Magazine.

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