Workers regret their health benefit choices: survey

September 12, 2011

Within a few weeks, employees across the U.S. will start to see their healthcare benefit packages for 2012: They’ll find higher premium costs, more coverage restrictions and myriad choices on items like deductibles, flexible spending account contributions, vision and dental coverage and more. If this year is like others, almost half of those employees will make decisions they later regret.

That’s the findings of a new survey conducted by Harris Interactive and due to be released tomorrow as part of the Aflac WorkForces Report. Reuters received the findings early.

The study reports that 77 percent of workers say they’ve made mistakes in their benefit decisions in the past, with 42 percent saying they waste money every year. The most common mistakes, according to Aflac, include choosing the wrong deductible, not taking advantage of their flexible spending account and passing on coverage — such as vision and dental care — that they later wish they had taken.

Making those decisions could be even more difficult this year, as employers are putting more employees into plans that have high deductibles and linked savings and spending accounts, and also raising the cost of premiums, especially for family members.

Employer costs will go up roughly 5.9 percent, and the majority of employers will pass those increases on to workers, according to the most recent 2011 Towers Watson Health Care Trend Survey. Roughly two-thirds of employers (66 percent) will increase employees’ share-of-premium contributions for single-only coverage for 2012, and 73 percent will increase them for dependent coverage.  This “looks like a year when we will start to see costs go up primarily via increased premium contributions, with a higher proportion of the increase being borne by families,” says Randall Abbott, senior health care consultant at Towers Watson.

The takeaway for workers? If both spouses are working, it’s an especially good year to consider each spouse using his or her own healthcare plan and putting the kids on the one that’s best. “Employers are becoming increasingly focused on raising the cost for dependents to capture the added expense and to encourage working spouses to shift to their own employer’s plan,” says Abbott. “We also expect more use of spousal surcharges when they fail to do so.”

Workers also are usually better off if they use higher deductibles to keep their monthly premiums low, and take advantage of low-cost policies that cover regular care, such as dental or vision coverage.  It’s almost impossible to predict healthcare costs for the coming year; accidents and illnesses are, by their very nature, usually surprises. But Aflac says that of those people who do contribute to flexible spending accounts, only 34 percent said they contribute the right amount.  Some 43 percent said they didn’t contribute enough. Only 23 percent put too much in their flexible spending accounts.

Workers who are coming down to the end of the year and still have a significant amount of money  left in their flexible spending accounts can start now to spend it down on elective expenses. They can buy an extra pair of glasses, squeeze in a dental visit or even add some therapy, to help them come to terms with all of those benefit decisions and regrets.

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The main reason people tend to under contribute to their FSA is that the amount must be declared in advance of spending, yet any unspent funds do not roll over to the following year.

An alternative is to have a Health Saving Account, which does allow unused funds to roll over.

Posted by RedRockDental | Report as abusive