Butler on Benefits

The ‘Sight Words’ of Health Benefits

I read survey results from the American Institute of CPAs that shows a majority of U.S. adults cannot accurately identify basic health insurance terms — benefits 'sight words,' so to speak.

November 8, 2013

My daughter recently started kindergarten and is gathering the building blocks of learning to read. One of those building blocks is mastering what are called “sight words” — short words that she’ll need to memorize and quickly process, since they appear in most texts — such as I, a, my, me, at, the and so forth.

It’s equal parts fascinating and frustrating to watch her practice and learn sight words, and I found an interesting parallel recently when I read survey results from the American Institute of CPAs that shows a majority of U.S. adults cannot accurately identify basic health insurance terms — benefits “sight words,” so to speak.

At a time when employees face critical decisions about their future coverage, the CPA group finds that more than half of respondents (51 percent) in a sample of more than 1,000 could not accurately identify at least one of the following terms: premium, deductible and copay.Retiree health care chart 1 November 2013

Based on those findings, it should come as no surprise that the third annual “Aflac WorkForces Report” reveals that 89 percent of workers choose the same benefits year after year, generally because they don’t understand the options provided.

“Half of Americans would fail Health Insurance 101,” said Ernie Almonte, chairman of the AICPA’s National CPA Financial Literacy Commission. “That’s critical insight as consumers prepare to make important decisions with implications for both their health and financial well-being. Americans need to take time in the coming weeks to familiarize themselves with the key terms and assess their needs so they make the best decisions for their health and financial situations.”

When employees are informed, they make wiser, less expensive choices.

Yes, they do — and they’re not doing themselves any favors. Just in time for open-enrollment season, a survey released earlier this fall from Colonial Life lists the top mistakes employees make when enrolling in benefits. Among them:
• Not reading the benefits information before the enrollment.
• Not knowing what benefits they currently have and what they cost.
• Forgetting to talk with their spouse about their family’s needs before enrollment.
• Assuming the cost of a new benefit is unaffordable without seeing any prices.
• Not attending the group informational meeting.
• Not taking time to understand the upcoming changes in their benefits plan.

Wow. Just … wow.

Obviously, the ultimate responsibility for making educated, sound benefit decisions lies with employees. Clearly, they’re not doing so great at that, to put it mildly. But — you knew there was a “but” coming — you can and should assist them in doing so.

The great news is you don’t have to go it alone: There are some excellent (and free) resources out there to help you, even from places you might not necessarily think to look:

Choosing Wisely ( Although the medical community has long been part of the problem when it comes to the confusion and complexity associated with our health care system, this time physicians’ groups have joined with Consumer Reports to launch Choosing Wisely. The online campaign helps consumers and employers promote “the more effective use of health care resources” through tip sheets and tool kits to encourage patients to have deeper conversations with their doctors about the cost and medical necessity of tests and services.

The artistic community. Good ( — an online community that aims to drive local collaboration and grass-roots progress — hosted a “transparency contest” that challenged graphic designers to create an easy-to-digest infographic that illustrates the Affordable Care Act. Featuring color, clarity and fun catchphrases like “What the health?” I promise you that all of the contest’s finalists would make a welcome addition to your benefits communications arsenal.  

YouTube. Yes, YouTube. Don’t dismiss the site as nothing more than cat videos and concert bootlegs. Enter keywords “health insurance 101” and your results will yield a free video library that breaks down the sight words above and then some — in terms that a kindergartner, or just someone with the benefits understanding of a 5-year-old, can easily understand.

I can’t promise it won’t still be frustrating to walk employees through a benefits-for-beginners course. But I can promise it will be worth it. When employees are informed, they make wiser, less expensive choices. And that benefits everyone.

Kelley M. Butler is the editorial director at Benz Communications, an HR/benefits communication strategy firm. Prior to joining Benz, Butler spent 11 years at Employee Benefit News, including seven as editor-in-chief. To comment, email Follow Workforce on Twitter at @workforcenews.