Educating Employees on Medical Insurance: What Should They Know?

To reduce the burden on costs and productivity created by employee illness, HR must prioritize educating employees on health insurance. Here’s how to accomplish that.

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Educating Employees on Medical Insurance: What Should They Know?

Here's what you need to know:

  • Common mistakes employees make when choosing healthcare coverage include choosing out-of-network providers, not using their FSA or HSA, and ignoring jargon
  • To educate staff on their health insurance, provide educational information during open enrollment periods
  • Use your provider’s benefits portal as a resource, break down insurance jargon for employees, and educate them on preventive care

Many organizations have a framework for keeping their staff updated on their salary and benefits policies. However, with so many innovative perks in today’s job market, training sessions usually overlook the more traditional benefits like medical insurance. As a result, employees are often ill-equipped to take full advantage of their coverage.

A study by Maestro Health reveals that about 35% of employees know little to nothing about their healthcare coverage. This lack of understanding causes many professionals to make costly yet easily avoidable mistakes.

What are common mistakes when choosing healthcare coverage?

Some of the most prevalent missteps include:

  • Choosing out-of-network providers: Many employees go with the 1st doctor they find without verifying whether they fall within their company’s insurance network. Out-of-network hospital bills can be several times higher than in-network charges.
  • Failing to use their Health Savings Account (HSA) or Flexible Spending Account (FSA): Most employees are unaware of the pre-tax accounts their employers offer to help them save on medical expenses. As a result, they leave this money on the table and miss out on significant tax savings.
  • Not reviewing their benefits periodically: According to an Aflac report, 93% of employees stick to the same benefits year after year. Consequently, they fail to take advantage of new coverage options or make changes that could save them money.
  • Ignoring the jargon: Words like deductibles, coinsurance, and out-of-pocket maximums often confuse employees, resulting in them signing up for coverage they barely understand.

Besides taking hard-earned money out of their pockets, health insurance errors make employees uncertain about their financial security.

Illness-related productivity loss costs employers $530 billion annually.

As a result, some even hesitate to seek treatment, which worsens their health and productivity. According to an Integrated Benefits Institute report, illness-related productivity loss costs employers $530 billion annually.

So, if you are an employer or HR professional, you must educate your employees about their medical insurance. Read on for the critical things all employees must know about health insurance and some tips on educating them effectively.

What must employees know about their healthcare insurance?

What your employees need to know about their coverage depends on your company policies and the type of coverage you offer. Here are some essential things for staff members to consider to help them choose the right plan and use their insurance effectively.

Factors for workers to consider when choosing a health plan

Today, employers offer a range of health insurance plans that cater to different needs. Therefore, it can be challenging for employees to decide which suits them and their families.

Some factors that staff members need to consider when choosing a health plan include:

Provider network

All company plans have a network of doctors, specialists, and hospitals that have agreed to accept the insurance company’s terms.

Employees must be aware of the network of providers associated with each coverage plan. If they have a preferred doctor or specialist, they need to ensure their plan includes them in their network.

What is covered

Healthcare coverage can vary significantly from one insurance package to the next. For example, some plans may not cover services like routine physicals, vision care, or dental care. Others may limit how often people can use certain services or require prior approval from the insurance company.


Premiums are the payments employees make to their health insurance company. Employees must be aware of their premium amounts and how they are charged.


A deductible is the amount of money an employee must pay out-of-pocket before their health insurance company begins to pay for their medical expenses. Employees must know how much their deductible is and whether it applies to all or some services.

Co-payment terms

A co-payment is a fixed out-of-pocket amount an employee must pay for a healthcare service. For example, a plan may require a patient to pay a $20 co-payment for office visits and a $100 co-payment for emergency room visits.

Coinsurance percentages

Plans with coinsurance require patients to pay a portion of their medical bills rather than a fixed co-payment. For instance, a plan offering 80% coinsurance requires the patient to pay 20% of their medical bills.

Out-of-pocket maximums

Some health insurance plans have out-of-pocket maximums. These amounts are the most an employee will have to pay for their share of covered medical expenses in a year.

Once employees reach their out-of-pocket maximum, their health insurance company will pay 100% of the costs for covered services.

What do workers need to remember when using their insurance?

Even staff members with the best plan for their needs can find themselves with hefty medical bills if they do not utilize their insurance correctly.

Here are some critical things employees must remember to put their coverage to the best use possible.

In-network providers

Employees will usually pay less out-of-pocket if they use in-network providers. Therefore, they need to check that their doctor, specialist, or hospital is in-network before they schedule an appointment.

Prior approval

Employees must confirm with their insurance company if prior approval is needed for any procedure or treatment before booking it.

Claims process

Once an employee has received medical care, they must submit a claim to their insurance company for reimbursement. They must be familiar with the claims process and any associated deadlines.

Denial appeals

Employees can appeal if their insurance company denies a claim. So, they need to know how to file the appeal, and the documentation required.

Preventive care

Many health insurance plans offer free or low-cost preventive care, such as annual physicals, immunizations, and cancer screenings. Leveraging these services will help employees stay healthy and avoid high medical bills.

How can you educate your staff on medical insurance?

To reduce the burden on bottom lines and productivity created by employee illness, HR must prioritize educating employees on health insurance.

Below are some tips to help you educate your staff effectively.

Take advantage of open enrollment periods

Open enrollment periods are when employees can sign up or change their health insurance benefits. During this time, you can hold informational meetings or send out educational materials to help employees understand their options and make the best choices for themselves and their families.

Use your provider’s benefits portal as a resource

Most health insurance providers have an online benefits portal with a wealth of educational resources. So, you do not have to reinvent the wheel when educating your employees.

Be mindful of 1st-timers

Younger and newer employees are most likely to make health insurance mistakes because they are least familiar with the process. Therefore, rather than using a one-size-fits-all technique, conduct separate educational sessions or create material specifically for 1st-time enrollees.

Break down insurance jargon

Jargon is a primary cause of confusion in health insurance. Explain all industry-specific words and phrases in layman’s terms to ensure employees understand them before committing to a coverage plan.

Prepare for questions

Employees will have questions during and after training sessions. Prepare in advance to improve your chances of answering all questions satisfactorily.

Your insurance partner must also be accessible to answer inquiries directly from your staff or benefits managers when needed.

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Educate your employees to help them avoid costly insurance mistakes

Medical insurance can be an intricate topic for employees. With so many things to consider, even the savviest staff member can make a mistake that costs them dearly.

As an employer or HR professional managing employee benefits, it is your responsibility to ensure your employees are well informed about their health insurance benefits. Educating your staff on medical insurance helps them to:

  • Get the care they need in the most cost-effective way possible.
  • Take a more active, informed role in their healthcare.

Utilize the pointers we have discussed to develop an effective employee education program on medical insurance at your organization.

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