After mastering how to find services covered by insurance near them and learning their health insurance terminology, employees may graduate to advanced tools like HSAs. (Photo: Getty)
Each year, a lack of health insurance understanding causes countless American professionals to make health insurance mistakes which can cost them hundreds or thousands of dollars. If employees are worried about making expensive mistakes when seeking routine healthcare, they may avoid it altogether, which can negatively impact their health, and in turn, their productivity. A key way for employers to prevent this is by offering employees education and resources to help them navigate health insurance.
What young employees must know
As young professionals turn 26, they must obtain their own health insurance coverage, if they do not already have it. Having been on their parents' health plans in many cases, these young professionals often know little about the American health care system. It is rarely as simple as showing up for your appointment – there are factors to consider when finding providers, terms to know and seemingly complex mechanisms like health savings accounts (HSAs) to understand.
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One way for your employees to avoid surprise medical expenses is by advising them to visit doctors in-network with your company's health plan. Health plans typically cover less of the cost for out-of-network services, so patients pay more.
Emergency room (ER) visits are difficult to anticipate but it is still important to stay in-network, when possible. The average cost of an ER visit is $1,389. If your health plan covers 80% of the visit because the hospital is in-network, a patient will pay about $278 but if they only cover 60% because it is out-of-network, a patient will instead pay about $556.
However, just because a facility is in-network does not mean that every employee in that facility is in-network. Sometimes patients are treated by out-of-network doctors at in-network hospitals, only discovering after treatment that they have been billed at out-of-network rates. When they can, patients should ask each doctor whether they are in-network before receiving treatment.
When choosing a doctor, it is important to consider additional criteria, like their specific expertise and location. If an employee has a family, they may want a doctor with pediatric experience while if they live alone, they may not. Employees may also prefer doctors close to home or to work. Many health plans offer search tools that can help employees find doctors near them who specialize in what they need.
There is also some vocabulary that employees should know:
- Copay – the fixed price an employee must pay for a service before receiving it
- Premium – the amount an employee pays for health insurance each month
- Deductible – the amount an employee pays before insurance starts to pay
- Coinsurance – the percentage of a covered health service that an employee pays after paying their deductible
After mastering how to find services covered by insurance near them and learning their health insurance terminology, employees may graduate to advanced tools like HSAs. These tax-advantaged accounts allow employees to save money for qualified medical expenses not covered by high-deductible plans.
Why employers need employees to know this
Employees' health insurance literacy can positively or negatively impact their relationships with their employers and their productivity, so employers must ensure that their employees are up to speed.
Making expensive yet easily avoidable health insurance mistakes can take money out of employees' pockets and create feelings of financial uncertainty, which can make them question their happiness at their jobs and potentially increase turnover.
A lack of understanding about their benefits can make employees hesitate to seek treatment or routine care, which could worsen their health and productivity. Productivity lost to illness costs employers about $530 billion per year and illness results in about 893 million missed workdays per year nationwide.
How employers can educate employees on insurance
To reduce the burden to bottom lines and productivity created by employee illness, employers must educate employees on their health insurance benefits.
Through open enrollment periods, employers have recurring opportunities to educate employees on insurance. These periods are typically toward the end of each year, so employers have plenty of time to ensure employees are well equipped to use their health insurance properly.
Your human resources department does not need to reinvent the wheel; your health insurance plan provider should have educational materials available that can easily be shared with your employees through a benefits portal that can be accessed whenever they need. You should also proactively serve this information to employees through email campaigns or short, educational sessions ahead of open enrollment.
On top of general information about health insurance that applies to a broad range of employees, consider developing materials catered to younger employees or those who may be getting their own coverage for the first time. It is very possible that these employees will know much less about health insurance than older peers.
Alongside proactive education, your human resources staff should be prepared to field questions during enrollment periods. Ensure your human resources department has an open door policy and a firm understanding of the benefits your company offers. You will want a plan provider who can help here, too, so make sure your insurance partner is available to answer questions from your employees or benefits managers as needed.
Particularly during the pandemic and all of the health challenges it has created, employees look to health insurance for peace of mind. Health insurance can seem complex and intimidating, especially to young employees who are navigating it for the first time – sometimes so intimidating that they avoid using it, adversely affecting their own health and their companies' wellbeing. Proactively providing employees with information on how to make the most of their health benefits is not just beneficial to employers; it is their responsibility.
Marshall Staton is the director of human resources at Aeroflow Healthcare, a premier provider of durable medical equipment (DME).
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