Employees who misunderstand their benefits might miss out on free screenings and checkups that could prevent serious, expensive health complications in the long run. (Photo: Shutterstock)
In the United States, the average employee receives 8.2% of their compensation in the form of health insurance. It costs their employer an average of $6,972 per year. Yet, few employees take full advantage of their insurance and other health benefits. They often overpay for poor quality or inappropriate care, as we've discovered through analyzing over 19 billion de-identified health insurance claims at Amino. Essentially, people misuse or forfeit 8.2% of their compensation. But why?
HR teams do an excellent job of getting employees signed up for health insurance, but helping employees understand how their benefits work—and reminding them how to use them throughout the year—often receives less time and attention. Employees who misunderstand their benefits could be more likely to visit expensive emergency rooms and urgent care clinics. They may also miss out on free screenings and checkups that could prevent serious, expensive health complications in the long run.
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Underutilizing health care benefits can have serious consequences. In a February 2020 survey conducted by Salary Finance, 32% of adults working for companies with 500 or more employees reported having medical debt. Of those, 28% reported having an outstanding balance of $10,000 or more, which is higher than a typical out-of-pocket maximum.
So what can HR teams do to help employees take full advantage of their benefits? A simple but effective set of health care checklists can help employees stay on track throughout the year.
Checklist #1: Annual to-dos
The first checklist could have a title like, "Maximizing Your Health care Benefits" or "Your Annual Health care Benefits Checklist." At a minimum, it should cover the following to-dos:
- Annual exams and screenings: Schedule a physical, mammogram, colorectal cancer screening, and other relevant screenings.
- Immunizations: Review vaccinations and schedule appointments for those that need to be updated.
- Vision benefits: Take advantage of an annual eye exam, contact refills, and coverage for glasses.
- Dental benefits: Schedule two cleanings per year, which are usually included with every dental plan.
- Prescriptions: If your health plan or provider offers online refills, save yourself a trip to the pharmacy. If you're planning to switch plans at any point, make sure to refill your prescriptions beforehand so you don't run out during the transition period.
- Flexible Spending Account (FSA): Max out your pre-tax dollars before the end of the benefit year (or 2022 if your employer chooses to allow rollovers), which can be used not only for standard care but also for acupuncture, chiropractic care, mental health, over-the-counter medical supplies, and more (all listed here).
- Limited-purpose FSA (LPFSA): If you have a health savings account (HSA), make sure to use up your LPFSA dollars on vision and dental so you can keep more funds available in your HSA account for medical expenses.
Employees are much more likely to act on this checklist if you provide links for each action item. Under Annual Exams and Screenings, for instance, add a link to a platform where your employees can search in-network providers and schedule appointments. If you add COVID-19 testing to this checklist, provide links to local testing providers (specifically, their testing appointment page) rather than links to generic COVID-19 information from health departments.
Checklist #2: Using health benefits wisely
The second checklist should focus on the information your employees need to make financially sound health care choices in 2021. It's less about to-dos and more about being informed. A title like, "Understanding Your 2021 Health care Plan" or "How to Save Money on Health care This Year" might do the trick. Plan to cover:
- Deductibles and out-of-pocket max: If possible, show employees where they can access their deductible amount and out-of-pocket maximum, and then explain what these numbers mean in plain English. Healthcare.gov provides good examples in its glossary. Confusion about deductibles and the out-of-pocket max can lead employees to rack up bills accidentally.
- In-network providers: Depending on their 2021 plan design, employees may need to use different providers, pharmacies, and hospitals than they did in 2020. This can be jarring for employees who expected to see the same providers. Note these changes and provide a link where employees can find in-network care options.
- HSAs and FSAs: Employees often fail to use Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) simply because they don't understand the tax benefits. Explain these in plain English too.
- New or additional benefits: List your programs for telemedicine, direct primary care, chronic condition management, mental health, etc. and explain their advantages over conventional alternatives. A health care guidance solution makes it even easier for employees to find and use these benefits when they need them. Encourage employees to try these services out before exploring more costly treatment options.
The more accessible you make these services through reminders or checklists, the more likely employees are to use them. Your team worked hard to select these benefits and enroll employees. Don't stop there. These simple checklists can help employees understand their benefits and use them throughout the year. Feeling empowered and more knowledgeable about their care, your employees could save themselves (and your company) money in the long run.
Scott Kiever is chief revenue officer at Amino.
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