Aflac Study: Millennials Often Underestimate Health Care Costs

Study Also Finds That a Robust Benefits Package Leads to Greater Job Satisfaction

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Jun 29, 2016, 08:00 ET

COLUMBUS, Ga., June 29, 2016 /PRNewswire/ -- Aflac, the leading provider of voluntary insurance sales at the worksite in the United States, today announced results from the 2016 Aflac WorkForces Report, revealing how millennials are more likely to embrace a nontraditional approach to pay their medical expenses compared to older generations. They also are more likely than non-millennial generations to regularly underestimate the total cost of health care issues.

The online study, conducted by Lightspeed GMI on behalf of Aflac between January and February 2016, surveyed 1,500 benefits decision-makers and 5,000 employees at small, medium and large companies from across the United States.

"Employer-sponsored health care coverage is essential for employees," Aflac Senior Vice President and Chief Human Resources Officer Matthew Owenby said. "But as costs continue to rise, the younger generations appear more likely to tackle health care-related financial issues by means that older generations would not consider, including crowdfunding."

Millennials willing to consider options for covering medical costs

In the midst of rising health care expenses, the Aflac study revealed that millennials (ages 18 to 36) are more likely than non-millennial generations to regularly underestimate the total cost of an injury or illness, including medical, household and out-of-pocket costs (66 percent vs. 45 percent). And 65 percent say if they had an unexpected out-of-pocket expense, they could afford less than $1,000. They are also more inclined than older generations to try unconventional means such as borrowing from friends or family and crowdsourcing to pay for out-of-pocket health care expenses.

"Millennials' resourcefulness in trying alternate means to cover health care costs illustrates their deep concern for financial safety in the event of an unexpected injury or illness." Owenby said. "But the bottom line is that they tend to be both financially strapped and less aware of the potential costs of an accident or illness. We need to do a better job in educating them about how voluntary insurance can provide solutions for those who are looking to avoid a crippling debt."

Voluntary insurance helps boost employee satisfaction

Although health care reform may have helped expand access to affordable health care, out-of-pocket costs can still be substantial. For example, the out-of-pocket limits for 2017 are $7,150 for individual coverage and $14,300 for family coverage, making added insurance protection like voluntary insurance increasingly relevant to help pay out-of-pocket costs.

Voluntary insurance includes coverage such as accident, disability, critical illness, hospital and much more. Unlike major medical insurance, voluntary insurance policies pay cash directly to the policyholder, unless otherwise assigned, when they are sick or injured to help cover unexpected out-of-pocket costs. Nearly 4 in 5 employees (79 percent) see a growing need for voluntary insurance today compared to last year. And of those, 60 percent say it's driven by the rising cost of medical services.

Employees who were offered voluntary benefits options at work reported higher levels of satisfaction with their jobs and their benefits. Compared to employees who aren't offered these benefits, employees whose worksite offered voluntary benefits are more likely to say:

They are prepared¹to pay for out-of-pocket expenses not covered by major medical/health insurance related to an unexpected serious illness or accident (73 percent vs. 56 percent).
They are extremely or very satisfied with their jobs (73 percent vs. 57 percent).

"Whether employees are creating a crowdfunding page or saddling themselves with credit card debt, one thing is clear: No one group, whether millennials or older generations, is adequately prepared for a potential health care crisis," Owenby said. "A robust benefits package that includes major medical and voluntary insurance is more important than ever to ensure workers are financially secure. It will not only help provide peace of mind, but also will help workers continue to serve as significant contributors in the workplace."

About the Aflac WorkForces Report
The 2016 Aflac WorkForces Report is the sixth annual Aflac study examining benefits trends and attitudes. The study, conducted by Lightspeed GMI, captures responses from 1,500 benefits decision-makers and 5,000 employees across the U.S. in various industries. To learn more, visit AflacWorkForcesReport.com.

Methodology
Conducted by Lightspeed GMI on behalf of Aflac, the research contained two components – employer research and employee research. The Employer Survey was conducted online within the United States between Jan. 11, 2016, and Feb. 11, 2016, among 1,500 benefits decision-makers at companies with at least three employees. Results were weighted to enable year-over-year trending. No estimates of theoretical sampling error can be calculated; a full methodology is available.

The Employee Survey was conducted online within the United States between Jan. 20, 2016, and Feb. 3, 2016, among 5,000 adults ages 18 and older who are employed full or part time at a company with three or more employees and are not retired. Results were weighted to match U.S. demographics. No theoretical sampling error can be calculated; a full methodology is available.

About Lightspeed GMI
Lightspeed GMI is an award-winning global digital data collection enterprise. Founded in 1996, its innovative technology and proven sampling methodologies deliver operational excellence throughout the online research process. With more than 5.5 million online research respondents in 45 countries, Lightspeed GMI's proprietary panels deliver unparalleled quality, capacity and targeting. Headquartered in Warren, New Jersey, Lightspeed GMI is part of the Kantar, the data investment management arm of WPP, the world leader in marketing communication services. For more information, visit www.lightspeedgmi.com.

About Aflac
When a policyholder gets sick or hurt, Aflac pays cash benefits fast. For six decades, Aflac insurance policies have given policyholders the opportunity to focus on recovery, not financial stress. In the United States, Aflac is the leading provider of voluntary insurance at the worksite. Through its trailblazing One Day Pay^SM initiative, Aflac U.S. can receive, process, approve and disburse payment for eligible claims in one business day. In Japan, Aflac is the leading provider of medical and cancer insurance and insures 1 in 4 households. Aflac individual and group insurance products help provide protection to more than 50 million people worldwide. For 10 consecutive years, Aflac has been recognized by Ethisphere as one of the World's Most Ethical Companies. In 2016, Fortune magazine recognized Aflac as one of the 100 Best Companies to Work For in America for the 18th consecutive year and included Aflac on its list of Most Admired Companies for the 15th time, ranking the company No. 1 in innovation for the insurance, life and health category for the second consecutive year. In 2015, Aflac's contact centers were recognized by J.D. Power by providing "An Outstanding Customer Service Experience" for the Live Phone Channel. Aflac Incorporated is a Fortune 500 company listed on the New York Stock Exchange under the symbol AFL. To find out more about Aflac and One Day Pay^SM, visit aflac.com or espanol.aflac.com.

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Media contact – Jon Sullivan, 706.763.4813 or [email protected]

Analyst and investor contact – Robin Y. Wilkey, 706.596.3264 or 800.235.2667, FAX: 706.324.6330, or [email protected]

¹ Respondents who indicated they are somewhat, very, or extremely prepared.

SOURCE Aflac