New Data Uncovers False Sense of Confidence Regarding Benefits Choices Among American Workers

Insurance Weekly News

By a News Reporter-Staff News Editor at Insurance Weekly News -- Aflac, the leader in voluntary insurance sales at the worksite in the United States, announced results from two studies that analyzed the trends, attitudes and use of employee benefits among the U.S. workforce. The 2017 Aflac WorkForces Report (AWR) shows that American workers may feel more confident about benefits choices, while admitting a lack of understanding regarding the choices being made. A separate Aflac study found younger workers who may be making benefits decisions for the first time also lack knowledge of health insurance coverage but want to branch out and make independent benefits decisions.

American Workers May Have a False Sense of Confidence

Benefits enrollment findings from the 2017 Aflac WorkForces Report, a national online survey of 5,000 U.S. workers, conducted between Jan. 26 and Feb. 17, 2017, by Lightspeed GMI and released by Aflac, found that more than half (55 percent) of American workers who receive benefits from their employer agreed that completing their annual health benefits enrollment made them feel secure, like being tucked in at night, or accomplished, like they just finished a marathon. And 67 percent said they are confident they understood everything for which they signed up.

However, these results may indicate an underlying false sense of confidence. The survey also uncovered that 76 percent of workers are making benefits decisions without a complete knowledge of the overall plan. When asked specifically about understanding their overall policies, like deductibles, copays and providers in their network, only 24 percent of these workers could answer they understood everything. And this result has been on a steady decline since 2015, when nearly half (47 percent) believed they knew everything, and then down to 39 percent in 2016.

"It's counterintuitive to see that workers are reporting a positive benefits enrollment experience, but so many are still struggling with a good understanding of the various aspects of their health care coverage," said Matthew Owenby, senior vice president, chief human resources officer at Aflac. "Benefits enrollment is one of the most important decisions a worker can make each year. Ensuring workers are more educated will require a sustained effort by employers and employees alike to better understand all aspects of benefits, including coverage options and costs."

First-Time Enrollees Looking for Independence, Yet Unprepared

Because millennials and Generation Z are entering the workforce in record numbers, Aflac conducted a separate survey among 1,000 20- to 26-year-olds, employed either full or part time. The Aflac WorkForces Report First-Time Enrollees Survey was conducted from Aug. 24-28, 2017, by Research+Data Insights Inc. on behalf of Aflac and found that more than half (51 percent) of young workers will be choosing their health care benefits for the first time this enrollment season.

When thinking about health care benefits, nearly one-quarter of young adults surveyed associate benefits with independence (22 percent), yet only 19 percent feel confident, and just 31 percent say they feel prepared. Their biggest concern about choosing their own health insurance plan is cost (44 percent), followed by understanding how health insurance works (36 percent).

"For all workers, but especially young adults, choosing benefits is complex and filled with unfamiliar terminology, which leaves them feeling overwhelmed and possibly deterred from signing up for the right insurance coverage that they need," added Owenby. "Many young adults are also staying on their parents' insurance plans longer than ever before, delaying the need and opportunity to educate themselves about health care benefits."

Of respondents currently on their parents' plans (35 percent), more than half (54 percent) are leaving their parents' plan in the next year to purchase their own benefits for the first time. More than two-thirds (69 percent) of those on their parents' plans are unaware how much their health insurance coverage even costs, but surprisingly, 41 percent indicated they contribute financially to the health insurance plan their parents pay for.

Despite who is paying the bill, young workers are interested in voluntary benefits. When asked about the benefits young adults are most interested in, voluntary benefits were chosen by one-third of respondents; specifically, 32 percent said hospital insurance and 29 percent answered accident insurance.

Aflac Stresses Importance of Benefits Understanding

Given the importance of benefits decisions, an uneducated choice now could affect a worker's financial well-being in the year ahead, as well as more serious implications like draining a savings account or 401(k) to pay deductibles and other uncovered costs.

"We know from our experience and past data that fewer people each year say that they understand everything about their plans and their options, which means Americans are clearly hungry for answers to insurance questions," said Owenby. "Because they look to their benefits managers and insurance providers for benefits information, we are making it a priority to make our resources and insight easy to understand and readily available so employees can make well-informed decisions this benefits enrollment season."

To find an Aflac agent or broker near you or to view available resources, visit Aflac.com.

Keywords for this news article include: Aflac, Health Insurance.