How Health Insurance Literacy Powers Employees to Take Charge of Their Vitality and Well-being

By taking proactive steps to educate and support employees and their families, employers can help ensure a more informed workforce, leading to happier and healthier employees.

Health insurance literacy refers to how well individuals understand and feel confident in their ability to find, interpret and use information about their health insurance options. It goes beyond simply knowing their benefits – it also involves being able to navigate available services, apply this knowledge effectively, and make informed decisions about their coverage.

There are two aspects of health literacy. First, there’s personal health literacy, which looks at an individual’s capacity to access and comprehend health information. The other aspect is the health literacy environment, which looks at how organisations communicate and provide access to information.

Organisations with global workforces must take on the additional challenge of assisting employees to understand the health care systems they’re working within. For globally mobile employees who are living outside their home country, navigating unfamiliar healthcare systems can be complex and stressful. Health insurance literacy empowers them to better understand their coverage, accessing their benefits with confidence and taking charge of their well-being across borders.

One study found that 51% of insured adults reported difficulty understanding at least one aspect of how their health insurance works. However, global health insurance literacy levels vary depending on the region, as health care systems look different worldwide.

A study by The Cigna Group shows that higher health insurance literacy is associated with higher vitality, and that 75% of adults who have high health insurance literacy are satisfied with their overall health benefits. This highlights the need for employers, HR leaders, and benefits professionals to ensure employees have access to information that is easily understood, empowering employees to make decisions about their health as they move through their career.

Through our Cigna Healthcare HR and Employee Benefits & Well-being study, we found that while 93% of employers recognise health care benefits as essential for attracting and retaining talent, only 57% of employees feel their organisation actively supports their health and well-being. This disconnect often stems from unclear or inconsistent communication about available benefits. When employees don’t fully understand what’s offered, they’re less likely to engage with their health plans—missing opportunities for preventive care, financial savings, and improved vitality.

By taking proactive steps to educate and support employees and their families, employers can help ensure a more informed workforce, leading to happier and healthier employees.

What are 3 consequences of poor health literacy?

1. Reduced employee well-being
   Employees with low health insurance literacy are more likely to delay or avoid seeking care, including essential preventive services such as vaccinations and routine screenings. When employees are healthy, they are more engaged, more productive, and less likely to take time off due to illness. Supporting health literacy helps maintain a resilient and present workforce that values preventative services, enabling lasting vitality.
2. Poor health outcomes
   Limited understanding of health benefits is linked to worse health outcomes, which can lead to increased absenteeism, reduced productivity, and higher healthcare costs. Employees may miss out on timely care or fail to adhere to treatment plans, resulting in avoidable complications and long-term health issues.
   
   
3. Increased employee confusion and disengagement
   When employees struggle to understand their health benefits, they may feel overwhelmed, frustrated, or uncertain about how to access care. This confusion can lead to disengagement—not only from their health plans but also from their employer. A lack of clarity around benefits can erode trust, reduce morale, and impact overall job satisfaction. By improving health insurance literacy, employers can foster a more confident, empowered workforce that feels supported and valued.

How Employers Can Help Employees Maximise Their Health Benefits

Employers play a vital role in helping their workforce make the most of their health benefits. Here are four practical strategies:

Communicate clearly and avoid jargon

Use plain language to explain coverage options, deductibles, copayments, and other key terms. Provide accessible materials such as FAQs to help employees understand their benefits with confidence.

Highlight preventative care

Educate employees on the value of preventive services—such as screenings and immunisations—which are often covered at no additional cost. Encouraging early intervention supports long-term health and reduces overall costs.

Offer personalised support
Provide access to benefits advocates or support teams who can guide employees through complex decisions and answer individual queries. Personalised assistance builds trust and improves engagement.

Promote digital tools and resources
Encourage the use of mobile applications and online platforms provided by health insurers. These tools help employees locate in-network providers, compare costs, and manage claims more efficiently.

When employees understand their health benefits, they’re empowered to make informed choices that support their vitality, well-being, and long-term health. Health insurance literacy isn’t just about navigating coverage—it’s about giving individuals the confidence to take charge of their care, seek preventive services, and manage health-related decisions proactively. By fostering a culture of clarity, support, and education, employers can unlock the full potential of their benefits offerings and help build a healthier, more resilient workforce.

 

Sources:

Australian Commission on Safety and Quality in Health Care. Health Literacy: Patient and Consumer Centred Care. Retrieved from safetyandquality.gov.au

Cigna Global. Globally Mobile 2025: Supporting the Health and Vitality of International Workforces. Retrieved from Cigna Global   

KFF (Kaiser Family Foundation). Survey of Consumer Experiences with Health Insurance. Published June 15, 2023. Retrieved from KFF.org

Cigna Newsroom. High health insurance literacy associated with improved vitality, work productivity, and health outcomes. Retrieved from Cigna Newsroom

Cigna Global Health Benefits. Harnessing Health HR Vitality 2024 Report. Retrieved from Cigna Global Health 

Cigna Global. Healthy Employees Are More Productive. Retrieved from Cigna Global Health

Global Research and Consulting at Berkeley (GRC). The Silent Epidemic: Unmasking the Crisis of Health Literacy. Published December 13, 2024. Retrieved from GRC Berkeley