Health Plan Terminology Confuses Many Workers

Understanding their health care benefits is a struggle for a large percentage of U.S. employees, according to a study by human resources consultancy Watson Wyatt.

The survey of nearly 2,100 participants in employer-sponsored health care plans found that 43% of workers are uncertain about what treatments and services their health care plan covers. When asked if they would feel comfortable explaining specific terms relating to health care coverage to a friend or co-worker, 49% of respondents told researchers they are familiar with the term “co-pay;” 46%, with “deductible;” 36%, with “flexible spending account;” and 35%, with “out-of-pocket maximum.” Fewer than one-third of respondents said they would be able to define the terms “lifetime maximum,” “health savings account,” “coinsurance,” “formulary,” or “center of excellence.”

“It’s hard for employers to ask employees to take more responsibility for their health care when they are not speaking the same language,” said Kathryn Yates, global director of communication consulting at Watson Wyatt. “Helping employees improve their health care literacy and learn the terminology can make or break a company’s health care efforts overall.”

When asked how they would like their employers to communicate with them about their health benefits, around seven in ten respondents said they prefer receiving printed materials mailed to their home or provided at work, just under two-thirds said they wish to receive information online, and fewer than one-half indicated they prefer face-to-face meetings. The survey further showed that only around one-half of employees read all the materials provided by their employer during the annual health plan enrollment process.

“It’s essential to communicate with employees in ways that meet their needs and preferences,” Yates said. “By using a mix of channels and formats, employers can effectively increase understanding and empower employees to become smarter health care consumers.”