Today's consumers have more choice than ever when it comes to health care benefits. However, research suggests they are not utilizing those benefits as effectively as they could, in large part due to lack of knowledge and understanding. For third party administrators (TPAs) and benefits brokers, understanding where the gaps exist and providing solutions to address them is key to client satisfaction and business growth.

Health care benefits are complex, and for many employees, hard to fully understand. Endless insurance options, confounding terminology and acronyms, stringent IRS rules, contribution and spending limits, and other factors all contribute to an often perplexing subject. Numerous studies in recent years have found that a serious health care benefits education gap exists in our country.

A 2016 study by Guardian Insurance company found that 80 percent of workers claimed to understand their benefits, but when tested, only 49 percent actually did. Another recent study from C Space Health found that 35 percent of younger consumers have little understanding of the comparative advantages and disadvantages of their health insurance options. What's more, a 2015 paper by the National Bureau of Economic Research demonstrated that employees generally chose health insurance plans that weren't cost-effective when considered against their actual medical spending.

To help TPAs and brokers develop strategies to address these education gaps, DataPath, Inc., conducted a survey in late 2019 to assess the causes and determine potential solutions. The underlying motivation was to gain clarity around how much health care consumers really know about accessing and using their benefits, and what factors might be keeping them from becoming better informed.

To gain a better understanding of how health care and benefits education impacts consumer decisions, we surveyed hundreds of people from different companies, all of whom either had a flexible spending account (FSA) or health savings account (HSA).

Defining the gaps

The survey found that:

One-third of respondents (33 percent) have avoided going to the doctor as a result of confusion about their benefits.
More than half (55 percent) said they often feel confused about how their benefits work.
Nearly 3 out of 4 (70 percent) expressed fear of surprise fees and costs when seeking medical care.
Although all had a tax-advantaged medical spending account (FSA or HSA), 29 percent of respondents said they rarely check the balance available for use.
More than half (55 percent) of survey respondents felt only "somewhat" or "not at all" confident they had made the right choice during the annual benefit selection process.

Based on our survey results, as well as our experience working directly with plan sponsors, TPAs, brokers and plan participants, we believe there are several key elements that would help move the health care benefits engagement and usage needles in the right direction.

Promoting consumer directed health care

As advocates for consumer directed health care, including flexible spending accounts, health savings accounts, health reimbursement arrangements, and other employer-sponsored health care benefits, TPAs and brokers are the first step toward reducing health care costs and delivering higher consumer satisfaction.

However, consumer directed health care merely begins there. Working with insurance providers to get better group rates and integrated claims processing is another avenue.

In addition, promoting health care education can also help not only with greater FSA/HSA adoption, but also ensure those tax-advantaged dollars are being maximized. Employees need the confidence to be their own advocates. That's where a comprehensive benefits education and engagement strategy come into play.

Delivering a robust and wide-ranging approach to benefits education

Both employers and employees look to TPAs and brokers as leading experts on health care benefit accounts. As such, you need to be prepared to deliver greater insight. Preparing yourself with a solid plan to educate employees and engage them with their benefits goes a long way.

First, your benefits account strategy should include printed materials, email communications, videos, and a social media strategy so that you reach as many participants as possible. This should be adopted year round, not just during enrollment season. Once enrollment is complete, employees need to know how to use their benefits. You can always tailor your approach to different employer groups, if necessary.

Knowing that educational approaches may differ by generation

Remember that today's labor force has four distinct generations, with baby boomers, Generation X, millennials, and Generation Z. Each of these groups has different views on media and education. Where boomers and Gen X are comfortable with face-to-face interactions and written materials, Millennials and Gen Z are more tech-oriented, preferring digital communication that's within easy reach and kept up-to-date.

The generations may also seek out slightly different information, with workers over age 50 more interested in tax-advantaged tools such as HSAs and FSAs, and millennials and Generation Z looking into lowest-cost options.

Using employee engagement programs to encourage participation in the plan

Incorporating an employee education and engagement program can pay big dividends. Remember that health care is so complex that benefits can be hard to understand for many people. A program that delivers digestible nuggets of key information in fun, lighthearted materials can help. Blogs, videos, illustrated stories, and social media are great for delivering the "how to" information that is often not absorbed during enrollment.

Another piece of the education strategy is to make sure your clients know how to reach you. Listing your phone, email, and social media accounts allows employees to reach you through their preferred method of communication.

Once your participants feel more informed and confident about their choices, account adoption and usage is likely to increase. In turn, both employer and employee satisfaction will rise. Not only will employees make better use of their healthcare dollars, but they should also be healthier in the long run.

Bo Armstrong is a national conference speaker and author of numerous white papers and articles on the health care benefits industry. As DataPath's Chief Marketing Officer, Bo focuses on identifying emerging market trends within the benefits industry and advocating for customers and their needs within DataPath.

Instant Insights /

Education gaps present opportunity for brokers and TPAs

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