By Gary Harger
Some companies looking to reduce health care costs might consider eliminating supplemental, or voluntary, benefits such as vision, dental, disability or accident protection. But a growing number of employers recognize that offering voluntary benefits as part of a menu of coverage options can maximize the effectiveness of a company’s health care dollars and provide families with added peace of mind for their health and financial protection.
One voluntary benefit becoming more popular is critical illness insurance. Critical illness protection has seen consistent growth for nine of the past 10 years, with 59 percent of insurance carriers indicating they plan to increase their focus on critical illness sales, according to a recent survey from Gen Re.
Critical illness plans deliver financial certainty for employees, especially for those enrolled in high-deductible health plans, by providing a cash-benefit to help fund workers’ out-of-pocket expenses after a major illness such as cancer, heart attack or stroke. The plans are designed to supplement medical benefits and help employees to focus on healing from a major illness, instead of their bills. These additional resources mean employees may get back to health — and work — more quickly.
As more companies move to consumer-directed health plans, adding critical illness coverage provides financial protection for workers while giving cost certainty and financial flexibility to employers. To help employers recognize the value of critical illness plans and make the most of this coverage option for their workers, here are some tips to keep in mind:
- Focus on consumer-driven health plans. Identify employers that offer a consumer-driven health plan. These plans often have increased deductibles and the potential for higher out-of-pocket costs. By suggesting critical illness coverage, these plans can fill potential financial gaps for employees and their dependents and help pay for non-medical expenses such as child care or lost wages.
- Access to group rates. Buying a critical illness plan through an employer can enable access to group rates, which generally cost less than purchasing insurance independently. In regard to premiums, people can purchase a baseline critical illness protection plan with a $5,000 payout for about $60 per year, depending on factors such as age, location and industry. For a larger payout, such as $20,000, the cost for the employee would be about $240 per year.
- The benefits of add-ons. Some health insurers offer benefit packages that enable employees to select from several plans, with the company paying a set amount and employees having the option to pay the difference to enhance or expand their coverage. This approach provides companies with a predictable and manageable cost, while giving employees the opportunity to purchase added benefits that can protect them from unexpected health events.
- Make sure employees understand their options. It is important to develop a plan to help employees understand their coverage options and ease the enrollment process. Pre-enrollment communications help employees learn about different plans in a relaxed setting before the enrollment period begins. This allows for at-home discussions with family members about coverage options and needs.
- You can take it with you. Critical illness plans can be portable, which enables employees to take the coverage with them if they change jobs.
Adding voluntary benefits to a core benefit offering helps employees tailor their coverage to their unique needs. According to a 2014 report from LIMRA International, 71 percent of employers believe that voluntary benefits improve worker morale and satisfaction.
The mental, physical and financial challenges of a major medical illness can be overwhelming, but a carefully coordinated benefits strategy can make a difference in helping employees get back to health and return to work sooner. Employers who offer a comprehensive benefit package may be able to reduce turnover, increase productivity and build a culture of health in the workplace.
Gary Harger is vice president of voluntary products for UnitedHealthcare. Gary may be contacted at [email protected].