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Top Reasons Employees Aren't Using Their Group Health Insurance

Posted on 07 Jan, 2025
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Group health insurance is one of the biggest benefits employers give to their employees, but shockingly, not enough employees take full advantage of it. So to protect their workforce, most employers put substantial investment into these plans, but the employees miss out on it for multiple reasons. Let’s look at why employees aren’t taking advantage of their group health insurance and what can be done to fix this, as well as the challenges ahead.

group health insurance

1) Lack of awareness

One of the biggest reasons that employees don’t use their group health insurance is that they don’t even know that there is a group health insurance plan or what benefits are covered. Most employees don’t read the particulars during onboarding, or forget the coverage after a while.

Solution: Organise regular workshops or meet-ups where employers can discuss the features and benefits of their group health insurance so that employees know how to make use of them.

2) Complexity in the claim process

The group health insurance claim can feel like a maze to navigate. Overly complex paperwork, delays, or lack of knowledge about the procedure can discourage employees from claiming.

Solution: Make the claim process easy to navigate — be it through detailed step-by-step guides, dedicating HR resources to help through the process or picking insurers that offer an online claim platform that is easy to use. If employees are embedded within the health insurance industry, they are unlikely to utilise group health insurance.

3) Coverage that did not seem adequate

Some employees have little confidence that their group health insurance plan would cover them in full, especially when it involves large surgeries, periodical therapies, or chronic diseases. They may suspect the total coverage is low or presuppose that particular treatments are not included.

Solution: Employers should annually review the policy and ensure it serves employees. An alternative way to fill the gap can be to give employees an option to top-up their group health insurance.

4) You get to choose your health insurance policy plan

Most employees already have an individual policy for health insurance that they are already much more comfortable with. Even if it helps augment their coverage, they may not feel the need to make use of their group health insurance.

Solution: Encourage employees to think of group health insurance as an add-on rather than as a replacement for personal health policies. Mention advantages like waiting periods that are not for pre-existing diseases, this is usually part of the group health insurance.

5) Common misunderstandings over eligibility

Employees may mistakenly assume that family members such as ageing parents or unmarried siblings are excluded from coverage under the group health insurance policy. Consequently, they may simply forgo using the insurance at all.

Solution: Clearly outline the eligibility of dependents. Examples from real life can also help bust misconceptions.

6) Fear of employer involvement

Every time someone uses their group health insurance, their employer notices, and even if the service or condition is totally unrelated to their actual job, there is still fear of getting perceived as biased or judgmental by the employer.

Solution: Guarantee employees that no medical information is visible to anyone outside the insurance company. This helps ease any such concerns by being transparent about data privacy policies.

7) Limited provider network

If its group health insurance policy is tied to limited hospitals or clinics, employees may refrain from availing it due to a hassle. They might want a local healthcare provider who isn’t included in the plan.

Solution: Partner with the insurer to increase the number of empaneled hospitals OR clinics). Or look for plans that have some out-of-network reimbursement.

8) Not understanding your preventive benefits

Nothing worse than being left on an unmet wellness bearing. Many group health insurance policies today come with free health check-ups or wellness benefits that remain untapped. Employees typically think of insurance for emergencies and may not know these preventive services are covered.

Solution: Make sure to mention these benefits during employee communications and encourage regular use for collective well-being.

9) Lack of immediate need

Group health insurance may seem irrelevant to younger or healthier employees, who are either less likely to see their group health insurance as immediate or whose collective risk might not be high enough to incentivise their participation. This way of thinking can create under-utilisation.

Solution: Real-life examples of others benefitting through group health insurance in their times of emergencies can cement your case

Conclusion

Having group health insurance to protect you is a mighty weapon at your disposal but sadly many have it and don't even know it or don't use it at all because they haven't been informed, they fear it or they underestimate it's value. These challenges are addressed when employers want higher usage rates and when employees feel safe and cared for.

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