Health Care Enrollment Time Tries Workers

As the open-enrollment season for health benefits approaches, many workers will be making some bad choices, according to a new survey.

"Far too many people don't really understand their benefits," says Audrey Tillman, executive vice president of Corporate Services at Aflac. "In fact, most employees are on autopilot." The majority of American workers — 56% — estimate that they waste up to $750 each year because of costly mistakes they have made with their health insurance benefits, according to the Aflac WorkForces Report, a July survey of more than 2,000 consumers released today. That could represent four months of the grocery budget for a single person.

"Health insurance is complicated with all of the different terminology that goes along with it," says Carrie McLean, a consumer specialist at eHealthInsurance.com. "And people have gone through open enrollment with their eyes closed."

This is the second year Aflac has conducted a health care survey, and the situation is getting worse, Tillman says. In 2011, 24% of workers were confident about their decisions, vs. 16% this year.

Among common errors that Aflac found:

• Many employees, 89%, say that they simply elect the same benefits options every year.
• Nearly half of workers (47%) say that they rarely or never exceed their deductible costs.
• Only 16% contribute the right amount to flexible spending accounts.

Americans clearly understand that it's an important issue. Rising out-of-pocket medical expenses are one of the most costly financial burdens they face, say 43% of workers, Aflac found.

As benefits change, workers need to pay closer attention to their selections during open enrollment, the experts say. This year, many plans have increased the in-network deductibles, emergency room co-payments and prescription drug co-payments, said the PwC Health Research Institute annual report published in May.

And nearly six of 10 employers (57%) are considering increasing employee contributions to health plans, the PwC report says.

There also are some new plan benefits that could help workers as more companies offer financial incentives to promote wellness and health-improvement programs.

Although workers need better health plan information so they can make smart choices, what employers tend to do is give them a packet of 20 to 50 pages, and say read through this and decide which option you want to pick, McLean says.

"It was shocking to me when I saw that 52% of employees in our survey said that their company does not communicate with them at all about the open-enrollment process," Tillman says. "But if the benefits are not appreciated, or understood, or utilized in a way that is meaningful to employees, it's a waste on the employers as well," Tillman says.