Aflac study reveals that employers fall short on educating workers about benefits options, which takes a significant toll on employees’ finances.

A new survey report found that 56 percent of employees estimate they waste up to $750 because of mistakes they made with insurance-benefits elections. Nearly one of four respondents (24 percent) say they chose the wrong level of insurance coverage or benefits options they didn’t need, and only 16 percent of employees feel confident they aren’t making mistakes during the enrollment process. 

These new findings are part of the 2012 Open Enrollment Survey of the Aflac WorkForces Report, an online survey of 2,500 U.S. consumers conducted in July. The survey was conducted by Research Now and released by Aflac, which says it’s the largest provider of supplemental and guaranteed-renewable insurance in the United States.

Common mistakes

The Open Enrollment Survey found that 61 percent of consumers are only sometimes or not at all aware of changes to their policies each year. The survey found that 89 percent say they simply elect the same benefits options every year. Almost half (47 percent) rarely or never exceed deductible costs. Only 16 percent contribute the right amount to flexible spending accounts.

“Workers cannot afford to be in the dark about benefits options,” Audrey Boone Tillman, executive vice president of corporate services at Aflac, said in a news release. “It’s critical that employees understand their benefits options during open enrollment to ensure that they don’t make mistakes that cost them money.”

Health-care costs cause worry

Nearly half of American workers (43 percent) identified rising out-of-pocket medical expenses and health-insurance costs as the most important issues to them right now. The survey found that 38 percent of respondents say they are very or extremely concerned about the possibility of an unanticipated medical expense.

Many Americans have made changes in their everyday lives to meet the high cost of unexpected out-of-pocket medical expenses. Forty percent have had to cut back on social activities, 28 percent say they have not been able to take a vacation and 22 percent have had to work more hours, according to the Aflac WorkForces Report.

Marketing benefits

While many U.S. employers surveyed feel they are adequately educating their workers about benefits options, employees disagree. The Open Enrollment Survey found that nearly two-thirds (65 percent) of employees feel they are only somewhat prepared or not ready for open enrollment. Meanwhile, almost half (49 percent) of employers believe they communicate very to extremely effectively with their workers about company benefits. More than half of employees (52 percent) say that their company has not communicated with them at all about the open-enrollment process, according to the recent survey.

 “Workers want to understand their insurance options, but many don’t believe they have the information or the tools they need. Open enrollment is a crucial time for employers to help workers make smart choices about their physical and financial health,” Tillman said in the news release.

Half of employees said they would feel more informed about health-insurance choices if they sat down with an insurance consultant during enrollment, and 47 percent typically look to resources other than HR/benefits professionals for advice about their benefits, according to the Aflac WorkForces Report.

Tillman recommends that business owners and HR executives take a cue from successful marketing campaigns and consider how to communicate with employees about benefits in ways that will engage and empower them. Some of her best-practice recommendations for employers include:

– Choose the right products. Survey employees to determine what they need and want in order to offer the right mix of benefits options to meet their needs.

– Consider including more benefits options that don’t have a direct cost to the company by offering voluntary plans. The Aflac WorkForces Report showed that more than half of employees (60 percent) say they would be at least somewhat likely to apply for voluntary insurance plans if they were made available to them by their employer.

– Choose the right time to market benefits offerings to employees. Plan to reach employees when they’re most receptive to learning about their options and how they can get the most for their money. The most innovative employers use a mix of online benefits portals, agent/broker enrollment sessions, employee newsletters, lunch-and-learn sessions, customized benefits booklets, frequently asked questions and other educational materials to help employees understand what’s available and how each plan works.

The full study results are available at AflacWorkForcesReport.com.