Workers Face Crucial Decisions During Open Enrollment, Yet Aflac Survey Finds Continued Confusion About Benefits Options

Poor benefits decisions and lack of understanding may leave employees vulnerable to potentially costly medical expenses

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Sep 12, 2013, 08:00 ET

COLUMBUS, Ga., Sept. 12, 2013 /PRNewswire/ -- While open enrollment season is closing in, the knowledge gap is widening among workers and may result in inadequate or financially-risky benefits choices. According to the newly-released 2013 Open Enrollment Survey, seven-out-of-ten (71 percent) American workers already admit they only sometimes or rarely understand the changes to their policies each year, yet 90 percent elect the same coverage every year. The wide-ranging changes anticipated by employers this open enrollment season, and 37 percent of workers believing it will be more difficult to understand everything in their policy this year, point to a greater potential this year for enrollment decisions that will leave workers struggling to cover financially.

The Open Enrollment Survey is conducted online among 2,001 U.S. consumers in August 2013 by Research Now and released by Aflac (NYSE: AFL), the No. 1 provider of supplemental and guaranteed-renewable insurance in the United States.

"Workers will contend with three major factors this enrollment period, including employers' increasing adoption of high-deductible health plans, scaled down benefit plans, and increasing premiums," said Audrey Boone Tillman, executive vice president of Corporate Services at Aflac. "All of these changes require workers to pay even closer attention and have a full understanding of the benefit plans being offered to them. Not doing so may put them at high risk for higher deductibles, co-pays, or gaps in coverage that can result in unmanageable out-of-pocket costs if an emergency occurs."

As average annual worker contributions for family health insurance coverage have increased by 89 percent from 2003 to 2013¹, and more than half (53 percent) of companies have already adopted a high-deductible health plan², the amount of health insurance and medical costs employees are responsible for continues to grow. Yet, according to the Open Enrollment Survey, workers will be at financial risk if they don't carefully review their employer-sponsored plans:

50 percent of employees agreed that $25 is the maximum increase to their monthly health insurance premium that they are able to cover financially;
83 percent of workers are only willing to spend up to $1,000 for their health insurance deductible each year;
4-out-of-10 employees will have to cut expenses elsewhere to cover the difference if monthly premiums increase; and
20 percent will trade down on their benefits package, accepting decreased coverage to get a lower premium.

On top of that, nearly half of employees surveyed (46 percent) have less than $1,000 in savings for medical expenses.²

What Mistakes Can Employees Avoid?

The fact is many workers simply don't understand their employer's benefits offerings and the majority (68 percent) admit to making mistakes or having regrets during the open enrollment process. As a result, the Aflac survey found that more than half (54 percent) of workers waste up to $750 because of benefits mistakes made during open enrollment. Additionally, 74 percent of workers admit they only sometimes, rarely or never understand everything covered by their current health care policy.

In order to avoid mistakes, employees need to educate themselves about what their insurance plans actually cover and carefully review policy changes each year. Here are some changes to look for:

Top Tips

Prepare ahead of time: Be aware of annual insurance policy changes and compare your new benefits package to your policy from the year before. Do your homework to ensure you choose the right policy that fits your needs and make sure that all of the health insurance costs you're responsible for are within your budget. Also, review the deductibles and other out-of-pocket costs for health care services and pharmacy purchases you'll be responsible for paying to ensure your plan offers the coverage you need.
Don't make assumptions: Keep in mind that if your company hasn't made any material changes to its health insurance plan since health care reform legislation was passed in 2010, it may be exempt for now from offering widely discussed essential health benefits, including free preventive services. Ask your HR manager if your policy options changed to include new benefits made available by health care reform.
Check your spouse's benefits package: Your employer doesn't have to offer insurance to your spouse and as costs increase, more companies are cutting this option. Even if your employer does offer your spouse insurance, the company is not obligated to pay anything toward the premium. If your spouse has access to employer-sponsored health insurance through his or her job, it may make the most financial sense to purchase two individual policies as opposed to one family policy.
Don't double up: Health care reform legislation requires plans in the individual and small group markets to offer essential health benefits like pediatric vision and dental and chronic disease management services. Check all aspects of your major medical plan so you know what is covered and what isn't.
Examine premium costs carefully: Cheaper isn't always better, since plans with the lowest monthly premiums likely mean you'll pay more in co-insurance and receive less coverage.
Consider supplemental insurance such as accident, hospital or critical illness plans to help reduce rising health care expenses.

To learn more about the 2013 Aflac WorkForces Report visit AflacWorkForcesReport.com.

About the Aflac WorkForces Report
The 2013 Aflac WorkForces Report is the third annual Aflac employee benefits study examining benefit trends and attitudes. The study, conducted by Research Now, captures responses from 1,884 benefits decision-makers and 5,299 employees across the U.S. To learn more about the Aflac WorkForces Report, visit AflacWorkForcesReport.com.

Conducted by Research Now 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. 4, 2013, and Jan. 15, 2013, among 1,884 benefits decision-makers. Results were representative of U.S. companies with at least three employees based on company size (number of employees) and industry. 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. 7, 2013, and Jan. 24, 2013, among 5,229 employed adults ages 18 and older who are employed full or part time at a company with three or more employees and not retired. The first 3,038 interviews were nationally representative while the remaining 3,602 interviews were conducted among the Top 20 designated market areas (DMAs) —100+ interviews per DMA. Results were weighted as needed for household income. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Methodology
The 2013 Open Enrollment Survey of the Aflac WorkForces Report was conducted online within the United States in August 2013 among 2001 consumers ages 18 and older, of whom 1622 were employed full time and 379 were employed part time and, responsible for insurance decisions. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Aflac Media Relations at [email protected] or 706.243.5543.

About Research Now
Research Now is the leading global online sampling and online data collection company. With over six million panelists in 38 countries worldwide, Research Now enables companies to listen to and interact with real consumers and business decision-makers to help them make key business decisions. Research Now offers a full suite of data collection services, including social media sampling, and operates the Valued Opinions™ Panel and e-Rewards^® Opinion Panels. The company has a multilingual staff located in 24 offices around the globe and has been recognized for four consecutive years as the industry leader in client satisfaction. For more information, please visit researchnow.com.

About Aflac
When a policyholder gets sick or hurt, Aflac pays cash benefits fast. For nearly six decades, Aflac insurance policies have given policyholders the opportunity to focus on recovery, not financial stress. In the United States, Aflac is the number one provider of guaranteed-renewable insurance. In Japan, Aflac is the number one life insurance company in terms of individual policies in force. Aflac individual and group insurance products provide protection to more than 50 million people worldwide. For seven consecutive years, Aflac has been recognized by Ethisphere magazine as one of the World's Most Ethical Companies. In 2013, FORTUNE magazine recognized Aflac as one of the 100 Best Companies to Work for in America for the 15th consecutive year. Also, in 2013, FORTUNE magazine included Aflac on its list of Most Admired Companies for the 12th time, ranking the company number one in the life and health insurance category. Aflac Incorporated is a Fortune 500 company listed on the New York Stock Exchange under the symbol AFL. To find out more about Aflac, visit aflac.com or espanol.aflac.com.

This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Aflac cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process. We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.

¹Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2003-2013
²2013 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 4 - 15, 2013

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