Study Points to U.S. Workers' Health Care Illiteracy

July 11, 2007
Less than half of U.S. employees don't understand how their health care coverage works and admit that their familiarity with the most basic health care vocabulary needs improvement, according to a survey by Watson Wyatt, a global consulting firm.

In its survey of nearly 2,100 covered workers, Watson Wyatt found that a top challenge for 43 percent of workers is understanding what their health care plan covers. Also, less than half are comfortable explaining common health benefit terms – such as co-pay or deductible – to a friend or co-worker.

And, according to the survey, fewer than one in four feels comfortable describing health savings accounts, co-insurance and terms such as “formulary” (lists containing the names of certain prescription drugs covered by a health care insurance plan) and “center of excellence.”

According to the survey results, the following percentage of workers said they were comfortable describing the following benefit terms:

  • Co-pay – 49 percent.
  • Deductible – 46 percent.
  • Flexible spending account – 36 percent.
  • Out-of-pocket maximum – 35 percent.
  • Lifetime maximum – 27 percent.
  • Health savings account – 24 percent.
  • Co-insurance – 22 percent.
  • Formulary – 16 percent.
  • Center of excellence – 8 percent.

“It's hard for employers to ask employees to take more responsibility for their health care when they are not speaking the same language,” said Kathryn Yates, global director of communication consulting at Watson Wyatt. “Helping employees improve their health care literacy and learn the terminology can make or break a company's health care efforts overall.”

Print Communication Preferred Over Web

The survey also found that most employees like to receive communication about their health care benefits in print. When asked to rate several delivery channels, about seven in 10 said that they prefer print materials mailed to their home or provided at work. Slightly fewer (64 percent) prefer receiving information via the Internet. Less than half (46 percent) favor face-to-face meetings.

Interestingly, only a slight majority (52 percent) of employees read all the materials provided by their employer during the annual health care enrollment process. Three percent said that they do not read any of the materials, and the remainder reads either only what is needed to enroll or only information about changes to the plans.

“It's essential to communicate with employees in ways that meet their needs and preferences,” Yates said. “By using a mix of channels and formats, employers can effectively increase understanding and empower employees to become smarter health care consumers.”

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