Health insurance is a significant investment in an employee’s well-being. However, many people stumble when selecting plan options, meeting deadlines, and researching benefits.
These common insurance mistakes affect their wallets and ripple out to employers through higher costs, lost productivity, and avoidable frustration.
According to a study by Voya Financial, 35% of employees don’t fully understand the benefits they selected during open enrollment, and 66% wish their employers provided more guidance year-round – not just during open enrollment. This gap leaves both employees and employers facing avoidable financial and emotional stress.
But it doesn’t have to be this way. Employers have the power to change this dynamic.
As a trusted insurance broker, the team at Terri Yurek knows how to approach these challenges. In this article, we’ll explore the most common health insurance mistakes employers make and, more importantly, how employers can help.
6 Common Health Insurance Mistakes Employees Make
Health insurance is often the last thing workers want to think about. It’s a world of unfamiliar terms, complicated options, and strict deadlines.
Unfortunately, these hurdles often lead to costly mistakes that impact employees’ finances and overall well-being. Employers can help employees avoid these pitfalls – but first, they need to know the common mistakes people make regarding health insurance options.
Here’s a closer look at the most frequent hiccups and how they can be addressed:
Mistake #1: Not Understanding Their Plan Options
Employees often skim over plan details, overwhelmed by the sheer volume of information. Core benefits? Volunteer benefits? What does it all mean?
This pressure cooker of information sometimes results in choosing a plan that doesn’t suit their needs, leaving them underinsured or overpaying for coverage they don’t fully use.
Working with a trusted Medicare advisor is one of the safest ways to ensure you’re only interacting with verified plan options and legitimate providers.
Mistake #2: Rushing Through or Missing Open Enrollment Deadlines
Open enrollment comes once a year and passes quickly, leaving procrastinators scrambling – or without coverage altogether. Missing this window can mean being stuck with a less-than-ideal plan or facing penalties.
It’s worth noting though that a qualifying life event, such as marriage, birth, or loss of other coverage, allows individuals to make changes to their health plans outside the designated Open Enrollment Period.
Mistake #3: Not Using Preventative Care Benefits
Preventative care is included in most health insurance plans, yet many employees overlook these benefits. Utilizing preventative care benefits (such as annual exams, vaccinations, and screenings) can positively impact an employee’s financial health by reducing long-term medical expenses.
As an employer, you want workers to take advantage of these benefits. When they take care of themselves and see doctors regularly, they’re less likely to miss work and experience conditions that impact their performance.
Mistake #4: Overlooking In-Network Providers
Choosing providers outside of your plan’s network can result in significantly higher medical bills, but employees often don’t realize the difference until it’s too late. Many don’t fully understand how networks work or forget to check before scheduling appointments.
Mistake #5: Failing to Update Coverage After Life Events
Major life changes – such as marriage, the birth of a child, or a change in employment – often require updates to health insurance coverage. Failing to update coverage can lead to denied insurance claims, especially if undisclosed conditions are involved. Employees may not know they must act, leaving them with gaps or outdated plans.
Mistake #6: Neglecting to Ask Questions
Many employees don’t ask for help when deciding on insurance, either because they’re unsure about who to approach or feel embarrassed about their lack of understanding. This leads to confusion and missed opportunities to optimize their coverage.
How Employers Can Help Employees Avoid These Mistakes
Employers have the power to guide their teams through the complexities of health plans and health insurance, reducing stress and helping employees make better choices. A proactive approach builds a workplace environment where employees feel informed and supported.
Here are some practical ways employers can step in to prevent common health insurance mistakes:
1. Offer Education Programs
Many employees make errors simply because they don’t know enough about their health insurance options. Education programs bridge that gap by providing straightforward guidance.
Workshops, webinars, and even just printed guides can help employees understand the differences between plan options, the value of preventative care, and how to avoid unnecessary costs. Equipping employees with the proper knowledge sets them up for success.
2. Communicate Deadlines Clearly
Deadlines – especially during open enrollment – can sneak up on employees if they’re not prominently highlighted. Employers can address this by making the most important dates impossible to miss.
Regular reminders through emails, team meetings, or company-wide announcements help keep deadlines top of mind. Visual aids like countdowns on bulletin boards or digital dashboards also reinforce urgency. Get the information out there, loud and clear!
3. Promote Preventative Care Benefits
Preventative care not only saves money but also improves employee health and productivity. Many workers, however, don’t realize they have access to free or low-cost preventative services.
Employers can promote these benefits by sharing clear, concise materials that explain what’s included – such as flu shots, screenings, or wellness exams. They can also highlight success stories from the workplace to encourage further benefit participation.
4. Encourage the Use of In-Network Providers
Educating employees about in-network providers is a practical way to help them save money and frustration. Out-of-network charges quickly add up, but many employees don’t fully understand how to check for in-network options.
Employers can assist by making it easy to find approved providers, whether through searchable directories, links to insurance portals, or internal communications. This simplified process makes a big difference for employees.
5. Support Employees During Life Changes
Life events often require immediate health insurance adjustments, yet employees may not realize the urgency. Employers can ease the burden by offering clear guidance during these transitions.
Regularly communicate about qualifying events – like marriage or the birth of a child – and how to update coverage. If you know someone on your team who has had a big life change recently, encourage them to connect with HR to discuss any potential updates to their coverage.
6. Make It Easy to Ask for Help
Health insurance questions feel intimidating, but employers can create an environment where seeking help is simple and stigma-free.
We recommend providing employees with clear avenues for asking questions. Dedicated points of contact, open Q&A sessions, or anonymous options like suggestion boxes work well, too. When employees feel supported, they’re more likely to make informed decisions.
Investing in Health Literacy Is a Win for Everyone
Health insurance is a shared opportunity for employers and employees to build a healthier, more informed workforce. The more proactive you are about getting ahead of employee mistakes, the more your entire team will benefit.
Ready to Simplify Health Insurance for Your Business?
At Terri Yurek Insurance, we guide businesses through health insurance complexities. Our goal is to help both employers and employees make confident decisions that fit their specific situations.
Contact us today to learn how we can support your company’s health insurance needs. We’re here to help!
