Times have changed since the introduction of the Affordable Care Act. Today, nearly all Americans have access to major medical insurance, either through workplace plans or the health care marketplace. And while it might seem that the availability of coverage has evened the playing field, the 2015 Aflac WorkForces Report reveals clear differences in understanding and engagement with their health care benefits.
The report shows that health literacy and financial preparedness are low among a majority of Americans, but socioeconomic gaps are emerging: Higher-income households (those earning $100,000 per year or more) are more likely to understand and take advantage of their health care benefits than lower-income households (those earning less than $50,000 per year).
Why is this difference in health care literacy and enrollment a concern? Because lower-income households are significantly less prepared to cope with financial fallout stemming from illnesses and injuries. These are the households that most need to comprehend and take advantage of the health care benefits available to their families.
Employee income: The dividing line
Aflac’s research reveals Americans’ overall lack of knowledge and comfort about health insurance. Just 10 percent report understanding their total annual health care costs very or extremely well, while 71 percent at least somewhat agree their personal health insurance situations will become more confusing as times goes on.
Dive a little deeper, though, and we begin to see gaps between higher- and lower-income households, not only in benefits literacy, but also in the use of products that help assure financial security. Individuals with lower household incomes are less likely to be enrolled in job-based benefits, and they’re also less likely to be satisfied with their benefits.
It’s worth noting that just one in four adults with incomes at or below 138 percent of the federal poverty level has access to employer-sponsored health insurance. That’s in sharp contrast to the 90 percent of adults with incomes at or above 400 percent of the poverty level who do have access to such coverage.1
As you can see, there’s a clear pattern of enrollment disparity between lower- and higher-income households. But the gaps don’t stop there. Higher-income workers are more likely to be satisfied2 with their benefits packages (58 percent vs. 46 percent for lower-income wage earners). They also devote more time to learning about their benefits: Half of those earning less than $50,000 per year spent less than 30 minutes researching their benefits during their last open enrollment, compared to 41 percent of those at the $100,000-or-above mark.
Employers can use the 2015 Aflac WorkForces Report to better understand how to improve employee engagement with their benefits options and help close their health literacy gaps. The report explores gaps between higher- and lower-income wage earners before shifting to a more holistic view of overall benefits trends, consumerism, employee expectations and technology.
1 Urban Institute Health Policy Center, “QuickTake: Low-income adults are less likely to have access to employer-sponsored coverage,” accessed March 25, 2015 - http://hrms.urban.org/quicktakes/Employer_Sponsored_Coverage.html
2 Satisfied = number of 2015 Aflac WorkForces Report participants who reported being very or extremely satisfied with the benefits offered to them