Seven Benefits Enrollment Mistakes Employees Make



Many don't talk to their spouse about their family's needs

By SHRM Online staff Oct 7, 2013

America’s workers aren’t doing enough to learn about their benefits options and coverage gaps—and it’s hurting them at annual enrollment time.

That’s the opinion of hundreds of benefits enrollment experts recently surveyed by Colonial Life & Accident Insurance Co., a benefits provider. The company asked nearly 400 employee benefits counselors—the majority of them veterans with five or more years of experience in the benefits industry—about the top mistakes they see people make during their annual benefits enrollment.

Topping the list:

  • Employees assuming they don’t need their organization’s benefits without first talking with a benefits counselor. This misstep was cited by 81 percent of respondents.

The next four errors were close together in the rankings and also related to lack of information:

  • Not reading the benefits information before the enrollment period (69 percent).
  • Not knowing what benefits they currently have and what they cost (69 percent).
  • Forgetting to talk with their spouse about their family’s needs before open enrollment (67 percent).
  • Assuming the cost of a new benefit is unaffordable without seeing any prices (66 percent).

“This is the one time you have to take control of how you want to provide for your family and yourself,” a survey respondent advised. “Take time to talk with your spouse and understand how the benefits can really help your family.”

Benefits Meetings Missed

Rounding out the top seven on the list were mistakes that also involved poor preparation and not taking advantage of educational resources. Specifically:

  • Not attending the group informational meeting (58 percent).
  • Not taking time to understand the upcoming changes in their benefits plan (50 percent).

“Personal knowledge is power,” a respondent wrote. “When a crisis happens, you’ll know how to protect your income and savings. Regardless of health care reform, out-of-pocket medical expenses aren’t going away.”

Many employers, especially those offering voluntary insurance options as part of annual enrollment, give workers the opportunity to meet individually with a benefits expert for a personalized counseling session. And employees who take advantage of these sessions are overwhelmingly positive about them. In Colonial Life’s postenrollment surveys 98 percent of those who participated in a one-to-one session said it was important, and 97 percent said the session improved or significantly improved their understanding of their benefits.

Americans Flummoxed by Health Plan Options

Like our self-directed retirement saving system, the new health care system is one that requires consumers with varying degrees of expertise and knowledge to make important decisions for themselves,reports Reuters.

Researchers from several universities asked a national cross-section of Americans to choose exchange policies that would be cost-efficient for them. The vast majority—80 percent—failed to choose the best plan, resulting in average annual overspending of $611.

"Most people had trouble combining the policy premium, co-pay and deductible to understand their total likely cost," said Eric Johnson, director of the Center for the Decision Sciences at Columbia Business School and co-author of the study.

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