Weekly Wrap: Open Enrollment? It May be a Pain, But it REALLY Matters

I’ve been getting hit a lot recently with news and surveys about a topic that I know is near and dear to many hearts: open enrollment.

Yes, I know in reality that just uttering the phrase “open enrollment” probably makes your eyes glaze over, because an organization’s open enrollment period — which usually takes place in the late summer or fall — is one of those pain in the rear, paperwork-and-compliance exercises that all too many HR pros have to grit their teeth to get through.

I get that, but there’s something else to consider when it comes to open enrollment: it’s really, really important, especially in this age of rapidly rising health care costs, federal mandates, and wellness initiatives.

The fact that so many employees (and maybe HR pros, too) view it as a paperwork-pushing pain in the ass, well, that just shows that we don’t do a good job stressing the huge impact that the right open enrollment decisions can have on workers for the next 12 months.

Workers making “avoidable” benefits mistakes

Want proof of what I’m talking about? Well, here’s a new survey from Aflac — the Open Enrollment Survey of the Aflac WorkForces Report — that makes all of this pretty clear. Here are some of the not-so-surprising findings:

• More than three quarters (76 percent) of American workers admit to making mistakes about their benefits decisions in the past;
• 42 percent of workers say they have wasted money each year because of mistakes they made with their insurance benefits;
• More than four-in-five Americans say they are at least somewhat concerned about the possibility of an unexpected medical expense.

“Far too many American workers are making avoidable mistakes in benefits coverage decisions — from not meeting deductible amounts to contributing too little to Flexible Spending Accounts — and, as a result of their lack of understanding or confusion, they often pay a price in multiple ways,” said Audrey Tillman, executive vice president of Corporate Services at Aflac, in a press release about the survey.

For example, in terms of cost-bearing mistakes and their consequences, the most common include not electing available benefit coverage such as vision, dental or voluntary, choosing the wrong level of coverage and putting too little in flexible spending account.

As a result of paying unexpected out-of-pocket medical costs, 65 percent of workers have had to make sacrifices, including cutting back on social activities (40 percent), luxury items (34 percent), purchasing gifts (29 percent) and taking a vacation (28 percent). Others admitted to working more hours (21 percent), creating a strict household budget (21 percent), and increasing use of credit cards or line of credit (19 percent).

Employers can help with common mistakes

In addition:

• Some 74 percent of workers say that when thinking about their choices for major medical insurance coverage, they only sometimes (or rarely, or never) understand everything that is covered by their policy;
• More than half (59 percent) of workers who choose the same benefits year after year say they only sometimes (or rarely, or never) have a full understanding of the changes in the policies each year.
• Although most do not fully understand their health care insurance policies, workers are worried about unexpected medical expenses. In fact, 83 percent of workers say they are at least somewhat concerned about the possibility of an unexpected medical expense, with 30 percent saying they are extremely/very concerned, considering their current financial situation.