The Health Insurance “Knowledge Gap” is Wide and Employees Don’t Know Where to Turn When Choosing Health Insurance Options

A survey conducted by The Harris Poll and commissioned by Justworks finds that 72% of employed adults who pick their insurance wish someone would tell them which health plan is best for them.

Justworks, the HR software platform for small businesses, announced the findings of its Health Insurance Knowledge Snapshot. The findings show that employed American adults experience a wide range of emotions when selecting benefits and that younger employees are less knowledgeable about what their plans cover, a gap that could end up costing them.

The survey, conducted by The Harris Poll, shows that many employed Americans misunderstand basic facts about health insurance despite high levels of self-reported knowledge. Knowledge gaps among US employees may also, in part, lead to some negative emotions experienced during the enrollment process. With confusion around key terms like deductible, as well as the workings of Health Savings Accounts “HSAs,” and Flexible Spending Accounts “FSAs,” it’s no surprise that Americans with insurance wish others would help them make their enrollment decisions, and that benefits—or perceptions about them—can play an important factor as to why employees leave or look for jobs.

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The Knowledge Gap

While the majority of employed Americans (82%) say they feel that they are knowledgeable about the health insurance enrollment process, including over a third (39%) who feel they are very knowledgeable, over half (53%) do not feel they are getting the most out of the health insurance options available to them. A similar proportion (54%) don’t know the full scope of what their current health insurance offers them.

“The Health Insurance Knowledge Snapshot shows us that there is a major knowledge gap in benefits understanding and a huge opportunity for education,” said Elizabeth Sklar, Manager, Research & Customer Insights at Justworks. Sklar continued, “With the current market conditions (inflation, the tightening of salaries and potential recession) it is more important than ever that employees understand their benefits so as not to miss out on potential cost-savings.”

Younger employed adults (aged 18-34 (67%); aged 35-44 (71%)) are more likely to incorrectly answer or to be unsure about some basic facts about health insurance—especially the definition of a deductible; vs. adults aged 45-64 (45-54 41%; 55-64 26%).

Employed American adults are unsure about who to turn to if they have questions and many times fall back on selecting the same insurance every year, potentially undercutting employers’ efforts to improve the enrollment experience by adding new plans or offering coverage at new price points. Key indicators of this knowledge gap and lack of confidence are:

  • 72% of employees who are involved in their health insurance decisions say they wish someone would tell them what the best health insurance for their unique situation is.
  • 44% of employed U.S. adults say they feel uncomfortable asking their HR representative questions about health insurance enrollment.
  • 47% say they call their friends or family members for help when enrolling in health insurance.
  • 62% of employed Americans who are involved in their health insurance decisions say they don’t usually change their health insurance selections year over year because it’s too stressful.
  • Nearly half (49%) feel pressure to select the most expensive health insurance option to ensure they have the coverage that they need.

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Benefits and Employee Retention

Given the current labor market, understanding benefits is always important. Among employed Americans, 66% say that they were looking for a new job, or open to a new one. In some cases, the consideration of benefits outweighs pay, as 78% of US employees say that having health insurance that meets their specific needs is important to them when looking for a new job, and 64% say that they would be willing to sacrifice some pay for better health insurance, if they were looking for a new job. In addition, nearly two-thirds (63%) say that their company’s health insurance offerings impact how much they want to keep working there.

“It’s not just about what employers are able to offer, but how their employees experience those offerings,” Sklar said. “If employers can offer preemptive guidance and education to their employees around how to select their best benefit option, employers will better help their employees and increase likelihood of talent retention.”

Employees who are either actively looking or open to a new job (58%) are more likely to say they don’t feel they are getting the most out of the health insurance options available to them compared to their peers (44%), highlighting the impact of benefits education and an enrollment experience that ensures employees feel secure and valued.

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