Employees are making the wrong benefits decisions.
That’s the result of research by U.S. insurance-provider Aflac, which shows that more than three-quarters (76%) of workers admit to making mistakes about their benefits decisions.
In addition, 42% of workers say they have wasted money each year because of mistakes they made with their insurance benefits, and 83% say their current financial situation leaves them concerned about unexpected medical expenses.
“Far too many American workers are making avoidable mistakes in benefits coverage decisions—from not meeting deductible amounts to contributing too little to flexible spending accounts—and, as a result of their lack of understanding or confusion, they often pay a price in multiple ways,” says Audrey Tillman, executive vice-president of corporate services at Aflac.
For example, the most common mistakes include not electing available benefits coverage such as vision or dental, choosing the wrong level of coverage and putting too little in flexible spending accounts. As a result of paying unexpected out-of-pocket medical costs, 65% of workers have had to make sacrifices, including cutting back on social activities (40%), luxury items (34%), purchasing gifts (29%) and taking a vacation (28%). Others admitted to working more hours (21%), creating a strict household budget (21%) and increasing use of credit cards or lines of credit (19%).
Seventy-four percent of workers say that when thinking about their choices for major medical insurance coverage, they often don’t understand what is covered by their policy—while slightly more than half (59%) of workers who choose the same benefits year after year say they often don’t have a full understanding of the changes in the policies each year.
“While workers certainly need to invest more time in making better educated decisions, employers can help by understanding workers’ most common mistakes, explaining their impact and offering best-practice solutions,” said Tillman.