By Alana Kahan, VP of Sales & Operations, Lang Financial Group
Maybe you offer health insurance because you’re an employer with 50+ full-time employees and you are required to offer it because of the Patient Protection and Affordable Care Act of 2010 (typically referred to as the Affordable Care Act). Or you may offer it because you know that health insurance is high on employees’ “want” list when it comes to benefits. Either way, explaining your health plan offerings needs to be a key part of your employee onboarding program. Passing out booklets or steering employees to website pages detailing options usually accomplishes very little.
But an in-depth introduction to health insurance doesn’t always happen, and the impact is significant. Only 9% of the US population has an understanding of basic health insurance terms. That’s not good! According to a new survey, only 4% of Americans can correctly define all four terms that determine how much they would be willing to pay for their health insurance plans (Deductible, Co-pay, Coinsurance, and Out-of-pocket Maximum). And if that isn’t enough of a concern, according to the International Foundation of Employee Benefit Plans almost 50% of employees don’t even understand their health benefits.
Organizations need a guided structure to explain health insurance and ensure employees understand their health insurance options. Health insurance is a complicated subject, which is why employers, along with their insurance firm, should hold meetings with employees as well as provide a detailed onboarding guide about their health insurance program. With adequate knowledge, employees can decide what’s best for them and pick the right health insurance plans based on their requirements.
There’s No Denying That Explaining Health Insurance Is Complicated
Employees need to fully understand their health insurance plan before they will look to use it. So, if you don’t take responsibility for properly educating them, you are setting up your organization to throw money down the drain. Over the years we’ve had many discussions with employers about monitoring healthcare plan usage and they wound up surprised that what they thought would be a solid benefit was hardly used at all.
Whether you offer a Health Maintenance Organization (HMO) plan or a Preferred Provider Organization (PPO) plan (or both), whether you offer dental or vision care or long-term disability (or all of these services), you can’t assume that every employee will understand the options. It’s not part of their job descriptions to master health-insurance-related jargon, which is why HR directors need to continually educate their employees about health insurance.
The Impact of a Good Employee Onboarding Guide
New employees who are a part of a structured onboarding program are 82% more likely to stay with the organization for up to three years. Since health insurance plays a big part of an individual’s decision to accept a position as well as stay with a company, one of the ways organizations can enhance employee retention is by making the process of understanding health insurance plans easier for employees.
According to a 2016 Workplace Benefits Study by Aflac, 75% of employees who were “highly satisfied” with their open enrollment experience wanted to stay with their organization for at least five years. The study also revealed that only 53% of employees who had a “good,” “fair,” or “poor” open enrollment experience wanted to stay with their organization for a minimum of five years.
Health Insurance Onboarding: HR’s Role
In most organizations, the HR function plays a key role in communicating health insurance benefits to new employees. However, HR is not always the conveyor of information to new employees. Sometimes this responsibility falls on the employee’s supervisor, who simply passes along the information. This is not ideal.
Independent health insurance brokers (like Lang Financial Group) have a deep knowledge of the health insurance plans they provide their clients. Your insurance partner should play a key role in helping new employees fully understand their plan options.
Does your group benefits insurance partner fully support you when it comes to educating employees? If not, please contact Lang Financial Group to learn more about how we make the process easier for our clients.