What could you do with an extra $750 a year? Plenty. But a new survey finds that 56 percent of employees waste up to that much because of mistakes made with health insurance benefits elections. Nearly one in four of those polled in the 2012 Open Enrollment Survey of the Aflac WorkForces Report say they chose the wrong level of insurance coverage, or benefit options they didn't need, and only 16 percent of employees feel confident they are not making mistakes during the enrollment process.
With open enrollment just around the corner, it's a good time to sort out the confusion. Sixty one percent are only sometimes, or not at all aware of changes to their policies each year, nearly 90 percent say they just elect the same benefit options every year, almost half rarely or never exceed deductible costs, and only 16 percent guess the correct amount they’ll spend in a year with a flexible spending account.
“Workers cannot afford to be in the dark about benefits options,” said Audrey Boone Tillman, executive vice president of Corporate Services at Aflac, in a press release. “It's critical that employees understand their benefits options during open enrollment to ensure that they don't make mistakes that cost them money.”
Though more than 50 million Americans are uninsured, the survey highlights that even those with insurance could be making mistakes that ultimately impact their health. The wording of a plan could mean the difference between being covered and not being covered for an illness. For example, Kevin Worthley, a certified financial planner with the Retirement Planning Company of New England, says if you're offered long-term disability insurance, make sure your coverage is for loss of ability to perform “your own occupation,” not “any occupation.” “This is a subtle distinction, but very important. It's generally harder to receive claims and benefits for “any occupation” since that is a much broader category than “your own occupation,” says Worthley.
What’s more, many employers offer accidental death and dismemberment coverage that seems attractive. “However, the exclusions for incidents covered are often rather narrow. It's typically more effective to have maximum disability and life coverage that offers broader protection,” says certified financial planner Mitchell Kauffman of Kauffman Wealth Services.
More than half of those surveyed say their company hasn't communicated with them at all about the open enrollment process. Most employees say they would feel more informed about their health insurance choices if they sat down with a consultant during enrollment, and many (47 percent) look to resources other than HR/benefits professionals for advice about their benefits. “It is worrisome if employees don't have a safety net in place to protect them against the unexpected,” says Boone Tillman, in an interview with The Fiscal Times.