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Health Benefits – American Workers Still Confused?

Denny WeinbergDenny Weinberg

Despite the decades-long focus of traditional benefits advisors, creative communications approaches and personal technology tools, American employers find their workers and family members still have no idea how health benefit plans provided at work … actually work.

Consider, from the 2018 Alegeus Consumer Health and Financial Fluency Report:

These findings echo previous studies, including one by PolicyGenius targeting Americans in 10 of the largest cities in the U.S. A clearly disappointing percent of those studied could say they “definitely understand the following terms”:

Further:

Since health benefits represent the costliest and fastest growing business expense for employers, and since it uniquely is delivered as a “benefit” to workers, executives should be really concerned. Historic models and traditional advisors have apparently failed to rationalize this “benefit promise” with the attendant cost, and with the poor understanding by the its targeted user….workers and their families.

Since health benefits represent the costliest and fastest growing business expense for employers, and since it uniquely is delivered as a “benefit” to workers, executives should be really concerned (with a lack of health care literacy).

Too often, HR and Benefits leaders avoid this literacy challenge by simply extending the same coverage year after year, assuming that their workers at least understand their current coverages. In fact, technology has been increasingly deployed to help a worker just “auto-renew what I already have” even though considering needs and choosing alternatives during the dreaded annual open enrollment process might be the better solution.

The same PolicyGenius study confirms this might be very short-sighted indeed:

We need a better measure of the value of  health benefit coverage…and one exists. Its called Actuarial Value (AV), and it allows a holistic comparison of the value of an entire health benefit coverage vs. its related costs. Using today’s technology capabilities, AV can effectively consider not just the four basic components of health benefit coverage (Deductible, Co-insurance levels, Co-Payments and Out-of-Pocket Maximums), but also the dozens of less visible and less understood coverage features in today’s health benefit structures. Further, when applied effectively, AV can encompass both the basic coverage and any tax advantaged accounts (HSA, FSA, HRA) or voluntary coverages (Critical Illness, Hospital Indemnity, Accident) that increasingly are available to wrap around the basic coverage. Its a particularly effective tool today, considering the degree of such “layered coverages” on top of core health plans.

New platforms like Hixme, have built their entire WorkPlace Market on the ability for both employers and their workforce to visualize current and possible coverage alternatives using an unbiased and consistent AV measure for all. Hixme’s enrollment platform and employer analytics tools are built from the ground up using this approach.

With such broad measures applied to new technology and delivery models, we may finally see worker health coverage literacy improve and a returning sense of “benefit” by workers and their family members.

 

 

 

Denny Weinberg is a 35 year veteran executive in healthcare financing and operations. Prior to his 4 years as investor and CEO with Hixme, his broad background includes a 20 year tenure CEO of a number of Anthem's largest operating companies. Denny has managed a portfolio of early stage companies in the Health/Medical arena as well as other industries. He has also served as board member, advisor and consultant to both private equity-backed, and publicly traded Blue Chip companies.

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