Written by Justyn Harkin
How many health insurance plans does your company offer its employees? Do you really need to offer three medical plans and two dental plans? Without a solid decision-support system (an online tool, special group sessions, or even one-on-one counseling), your company’s buffet of choices may be doing more harm than good.
When it comes to insurance benefits, having a choice might not be so great after all.
The concept isn’t that far-fetched. In fact, as a 2010 Commonwealth Fund study points out, an abundance of health insurance choices is something consumers don’t want…and it’s something they don’t need. The study’s author states, “consumers can be overwhelmed by too much choice, particularly when making complex, high-stakes decisions like buying health insurance.”
The study also notes that having too many choices can impair a person’s ability to make a rational decision. For instance, employees commonly pick health plans that are more expensive than what they might need. They do this because they feel safer and more secure with more coverage or because they just don’t trust the more affordable option. In their minds, the higher-cost plans are better because they cost more.
That’s bananas! Wait—let’s be professional. That’s nuts.
What people want is affordable insurance that provides good coverage, including some coverage for doctors outside the network. They want to know that they’ll be OK if they break their leg in a freak accident with a runaway tamale cart. If your company can provide that level of comfort with one plan, why complicate things? Besides, employees like to know the CEO gets the same plan they get.
This one-plan practice may be more common than you think. Plenty of big companies offer a single insurance plan to their employees. In fact, according to the Kaiser Family Foundation’s “Employer Health Benefits 2011 Annual Survey,” (a study which looked at the offerings of more than 3,000 randomly selected public and private firms), 84% of companies that offer health benefits offer only one type of plan.
Large companies, which the Kaiser survey categorizes as firms with more than 200 workers, are more likely to offer multiple plans than small firms, but many big guys also take the one-plan approach—62% of firms with 200 to 999 workers offer a single plan, as do 43% of firms with 1,000 to 4,999 workers, and 32% of firms with 5,000 workers or more.
And that makes sense.
While offering one plan does simplify the benefits communication process, a one-size-fits-all approach may not be the best way to serve the needs of every employee in a larger company (employees all over the US, for example). However, if multiple plans are offered, you can still apply the spirit of a one-plan approach by describing why your company’s plans are best for the employees they were chosen to serve.
You didn’t just pick these plans out of hat, so help employees visualize which of the offerings are best for them. The effect, you’ll find, can help highlight the one best choice from the pack of options.
About the Author: Justyn Harkin is a Communications Specialist at The Jellyvision Lab, providers of ALEX™, the Jellyvision Benefit Counselor, a virtual, cloud-based human resources personality that effectively eliminates mundane, and often confusing, benefit communications.