Confusion Leads to Bad Health Plan Choices 

Almost a quarter of employees faced with the choice of two employer-sponsored health care plans picked the one that left them worse off financially, according to research conducted by The Conversation. They looked at data from a large Midwest university that offered to subsidize one of two health care plans. The plans were identical except that one plan had much higher premiums but lower deductibles and co-payments.

Analysts found that 97% of the 2,300 employees would have been better off with the plan that had lower premiums, but higher cost-sharing. Yet 23% chose the higher premium plan anyway. The average cost per year of choosing the wrong plan was over $2,000.

The employee’s decision boils down to the amount of care they expect to need in the upcoming year and how much risk they want to bear. Ignoring the risk factor, someone who expects to use a small amount of health care services would optimally choose to pay a relatively low monthly insurance premium and larger out-of-pocket cost at the time of service.

Researchers say that providing better health plan search and analysis tools can help employees make better decisions.

Contact your LISI Regional Sales Representative for the top employee communication strategies.