Although more than 164 million Americans receive health benefits from their employer, only 2 in 10 are confident in their health insurance knowledge. This lack of ability to understand, evaluate and use health insurance information to make informed decisions about care and services can be costly to both workers and their employers.
“The ripple effects of low health insurance literacy extend throughout the ecosystem, with consequences that include worse health, reduced productivity, increased stress and unnecessary costs due to nonadherence, delayed or skipped care, undertreatment, overtreatment and emergency department visits,” according to a new report from Cigna Healthcare. “Decades of research has shown that poor health insurance literacy can inflate direct health care costs by hundreds of billions of dollars each year, while the indirect costs can total trillions of dollars.”
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In addition, adults with limited knowledge of how their health insurance works are twice as likely to be stressed about their health, which can exacerbate existing health problems, affect employee productivity, increase absenteeism and turnover, and lead to other indirect costs.
The majority of adults (68%) have medium health insurance literacy, and the remaining 11% have low literacy. The average vitality score for people with high health insurance literacy is 79 on a scale of 100, compared with 51 for those with low health insurance literacy.
“Employers invest in health benefits because a healthy workforce is imperative to organizational performance and growth,” the report said. “For maximum ROI, employees and their families must use those benefits effectively. Employee utilization and engagement data can help employers address gaps.”
Employers can deploy several strategies to boost health insurance literacy.
- Educational programs with clear communication. Educational programs should cover essential topics such as understanding common terms and evaluating different health plan options, as well as guidance on best practices for getting the most out of their employee benefits. This can include in-person engagement sessions; webinars and online coursed; and a multichannel approach so employees and their families can find the information they need, when they need it,
- Interactive tools. Interactive digital tools can enhance employees’ ability to navigate their health insurance options and make informed decisions. Plan comparison tools, cost calculators and benefit portals are among the options.
- Supportive environment. Foster an environment where people feel comfortable asking questions and seeking assistance with their health and wellbeing needs. An open-door policy, dedicated support teams and peer support groups all can promote healthy conversations.
“We know that workforce health and vitality are essential to productivity, innovation, a positive work environment and organizational and business success,” the report said. “A comprehensive health and wellbeing strategy enables employers to maximize the value of their investments in the benefits they offer and achieve the best outcomes at the lowest cost.”
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
