By Cyril Tuohy
With the Oct. 1 open enrollment period rapidly approaching for millions of Americans covered by employer-sponsored health benefits, there’s no better time for advisors to remind corporate accounts of an advisor’s value.
After all, employees tend to spend more time researching the purchase of a $700 flat-screen television or a $300 computer than they do thinking about buying $4,500 worth of health benefits or $1,000 worth of dental coverage through their employers.
Matthew Owenby, vice president of human resources at Aflac, said such purchasing dichotomies are “concerning,” and employees sometimes waste hundreds, if not thousands, of dollars in their hasty, last-minute decisions on benefits purchases.
Four out of 10 workers make mistakes related to insurance benefits choices. Those mistakes end up costing workers $750 a year on average, according to the results of the 2014 Aflac Open Enrollment Survey published earlier this month.
Some of the most common enrollment mistakes that employees make, according to the survey, include not understanding what is covered by their insurance policy and not paying attention to the changes in their policies from one year to the next.
In fairness, many benefits-related documents are hard to understand, employee surveys also reveal.
Mix-and-match options offered by different plans make buying decisions more difficult than they used to be. Payment choices — flexible spending accounts and health savings accounts — require employees to take additional steps to set up their coverage.
Instead of conducting a thorough analysis of their health care spending, many employees tune out, succumb to inertia, and simply re-enroll with the same plan for the upcoming year.
Indeed, 90 percent of employees are “auto-enrolling,” or keeping the same benefits as last year, according to the Aflac survey of 2,100 U.S. consumers conducted over the summer.
Could it be that 90 percent are pleased with their employer-sponsored benefits? That’s clearly not the case, not with employees being asked to shoulder a greater burden of health coverage through higher deductibles and out-of-pocket co-payments.
Only 47 percent of U.S. workers rated benefits offered by their employer as excellent or very good, a survey commissioned by Unum found earlier this year.
Mercer’s widely followed 2013 Workplace Survey also found support for employer-based benefits eroding among employees, a trend which has been occurring for many years.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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