Lack of medical plan knowledge may be clouding other benefit decisions.
Can employees accurately determine other benefit needs when many don’t know what is covered by their medical plan?
Despite general familiarity with their medical plan benefits, new research commissioned from New York Life Group Benefit Solutions* uncovers a significant knowledge gap that persists among employees when it comes to understanding their medical coverage. This lack of understanding could potentially lead to misguided decisions about their need for other employee benefits, as well as preparing for unexpected medical costs.
Medical plan familiarity varies by generation.
Surveyed adults, by and large, have a basic understanding of the costs associated with their medical plans, with 86% having at least a general idea of co-pays, 83% comprehending in-network options, 78% aware of their out-of-pocket maximums, and 72% understanding out-of-network costs. Among these demographics, Baby Boomers exhibit the strongest understanding of these healthcare aspects, while Gen Zers have the weakest grasp.
Knowledge gap creates false assumptions.
One worrisome fact is that despite this basic level of understanding, about a third of adults (34%) admit they don't fully understand what their medical plan covers. This knowledge gap could have profound implications, potentially causing employees to overlook the need for supplemental health benefits under the false assumption that their current medical plan will adequately cover unexpected medical costs.
High satisfaction rates despite some plans placing greater cost-sharing on employees
Interestingly, 85% of those surveyed report being satisfied with their current medical coverage. Even those with high-deductible health plans (HDHP) — known for their lower premiums but higher out-of-pocket costs — report an 80% satisfaction rate. Even though more than half of adults (58%) say the annual deductible for their medical plan is less than $3,000, 42% of those surveyed report having an annual deductible of more than $3,000. Parents are more likely to have a higher annual deductible, with 42% declaring their deductible is greater than $3,000, as opposed to 28% of non-parents.
Employers can help employees make better informed benefits decisions.
These figures all point to a stark reality: comprehension of healthcare benefits is not as robust as it needs to be, leaving many potentially exposed to financial shocks due to unexpected medical costs. As employers evolve benefit enrollment strategies, they may want to consider additional emphasis on benefits education that highlights the nuances of medical coverage. This can help reinforce the importance of supplemental health benefits in providing financial protection. Only by closing this knowledge gap can we ensure that all employees make the most informed decisions about their healthcare coverage
*New York Life Group Benefit Solutions commissioned an online poll between September 29-October 5, 2023 of nearly 2,000 adults employed in the private or government sector. Survey results have a margin of error of plus or minus two percentage points.