Household income key variable in benefits plan success
Lower income employees present a particular challenge to employers as they seek to get a handle on managing their health plans.
“While health literacy and financial preparedness is low among a majority of Americans, socioeconomic gaps are emerging,” concludes the 2015 Aflac Workforces Report.
“Higher-income households, or those earning $100,000 per year or more, are more likely to understand and take advantage of their health care benefits than lower-income households, or those earning less than $50,000 per year.”
The impact of this disparity falls disproportionately on those in the lower income brackets, according to the report – but there are steps employers can take to confront the challenge. “These are the households that most need to comprehend and take advantage of the health care benefits available to their families, because many are just one serious medical incident away from economic ruin,” the report states.
‘Knowledge and comfort’
But the study’s finding of the overall state of “knowledge and comfort about health insurance” leaves plenty of room for improvement. For example, only 10% of surveyed Americans believe they understand what they’re paying for health care “very” or “extremely” well.
There is broad pessimism about their ability to get on top of the situation, as 71% at least somewhat agree that their personal health insurance situations will become “more confusing as time goes on.”
An important factor in employees’ comprehension of their health benefits is the level of education achieved during the enrollment process. And while employee comfort levels with online enrollment systems has grown in recent years, those vary by income, the Aflac study finds. Specifically, a narrow majority (54%) of the lower income households prefer online enrollment versus face-to-face, while 74% of the higher income households have that preference.
A similarly wide gap exists between satisfaction levels of the two groups with respect to their most recent health claim filing experience: only 32% of the lower income group were satisfied with the experience, compared to 50% of the higher income group.
“All of these differences in enrollment preferences, experiences and understanding represent opportunities for improved communication between employers and workers,” the report states. Aflac’s researchers urge employers to be mindful of the varied learning styles employees (of all income groups) have. Therefore, communications should be delivered in multiple formats, including employee newsletters and magazines, online videos, email, “and even – when information is crucial – through the U.S. mail.”
No less important than the mode of communication is its frequency. The study found that half of the surveyed employers communicate about benefits choices no more than twice a year. “Unfortunately,” the researchers say, “this strategy is ineffective because it requires workers to absorb large amounts of information at once.”
Far preferable, they assert, is communicating “throughout the year, allowing workers to soak up bite-sized nuggets of benefits information.”
The report is based on survey responses from 1,977 benefits decision-makers representing the full spectrum of industries and employer sizes.