How leaders can help address the health insurance literacy gap

• What's at Stake: Confusion risks productivity, increased turnover, and heavier HR administrative burden.
• Expert Quote: "Coverage complexity persists even for experienced users," says Ryan Bullock, Aeroflow Health.
• Supporting Data: 58% of insured adults reported an insurance problem in the past year.
• Source: Bullets generated by AI with editorial review

Employees prioritize better insurance coverage, but the majority don't understand what they're even signing up for.

Approximately half of insured Americans have difficulty understanding at least some aspects of their health plans, according to a recent report from the Kaiser Family Foundation (KFF), with 58% of insured adults experiencing a problem with their health insurance in the past year. While much of what makes the health insurance system difficult to navigate is out of benefit leaders' control, they can help move the process along.    

"Even for the many of us that have been in healthcare and navigating the healthcare system for many years, it's still complicated," says Ryan Bullock, chief strategy officer at Aeroflow Health. "Coverage, guidelines, the boxes that need to be checked in order to access care — it's all complicated." 

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In KFF's survey, several employees reported problems related to using insurance that involved services or providers — such as a prescription, procedure, treatment or visit with a healthcare provider — not covered by their plan. Eighteen percent of insured adults indicated that their health insurance did not pay for a service that they thought was covered, leading 31% of employees to contact their insurance at least once in the past year to find out how much a medical procedure would cost out-of-pocket.

Coverage confusion can drive lost productivity as employees spend time disputing claims or contacting insurers, and the stress of surprise bills can negatively affect their engagement and focus, increasing turnover risk. On top of that, HR and benefit teams face a heavier administrative burden supporting employees through these issues, pulling time away from more strategic initiatives.

"Making sure that employees feel like their benefits are accessible and that they understand those benefits should be a large line item for organizations," Bullock says."When employers don't do that well and don't recognize or address [the insurance literacy gap], they're just adding another fissure to employee trust and engagement." 

Help employees make informed decisions

Much of a benefit leader's responsibility is understanding their employee base and what their insurance needs are or could be in the future, according to Bullock. This ensures that they're providing insurance education that actually affects employees, as opposed to keeping it vague and generic. For example, Aeroflow has a large female population, meaning that many of their training, webinars and resources cater more heavily to understanding family planning and maternal health benefits and which plans have the best coverage. 

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When employees don't see their situations represented, whether it's a chronic illness or a major life event, they don't know what to look out for. As a result, employees end up either passing up the opportunity to have something covered by a different plan or they may not know that a service they need is already covered, leading to the underutilization of helpful benefits. 

"It's important to keep employees engaged throughout the whole process," Bullock says. "Employees tend to be more engaged when they have a little skin in the game."

Be hands-on with young talent

Younger employees are most likely out of all their colleagues to feel the strain of the insurance literacy gap. In fact, one in four Gen Z adults admit that they don't even know what a deductible is, according to Bullock. For benefit leaders with a large young employee base, it could be beneficial to add educational opportunities around high deductible plans and the benefits of an HSA. It could also be helpful for leaders to emphasize the necessity of plans that cover preventative wellness checks and visits to primary care physicians.  

"Most young people think that because they're healthy and don't get sick that often they don't need any baseline measures," Bullock says. "Young employees may not even get introduced to the complexity of healthcare until they have a child or have to care for an older parent [and the stakes are higher]." 

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Bullock urges leaders to collaborate on this process with plan sponsors that can both provide utilization data and metrics so that benefit leaders can be as intentional as possible. Plan sponsors themselves should have robust employee support systems, in case employees need more specified help than benefit leaders may be able to provide. 

"The most important part of all this is communication," Bullock says. "If leaders can help employees navigate their insurance and do it really well, it can lead to a great culture where employees are appreciative and take full advantage of their organization's large investment in health coverage."