Can insurers finally eliminate the supplemental claims headache?

Millions of employees rely on supplemental insurance for financial protection, yet many never file claims. Insurers think they may have found a solution. (AI generated image)

By Noah Lopez

Supplemental health insurance is designed to provide a financial safety net during a medical crisis, but employees do not always access the benefits available to them.

Employers increasingly use supplemental benefits to help workers manage the out-of-pocket costs associated with high-deductible health plans.

According to the U.S. Bureau of Labor Statistics, the share of workers offered a high-deductible health plan increased from 38% in 2015 to 50% in 2024.

Many employers offer accident, hospital indemnity and critical illness insurance to help fill those gaps. Unlike medical insurance, which pays providers, supplemental insurance provides cash payments directly to employees after qualifying events.

But having coverage and using it are not always the same thing.

Supplemental health insurance remains a major part of the workplace benefits market. LIMRA reported that workplace supplemental health products generated $1.9 billion in new premium during the first half of 2025.

Why claims go unfiled

One reason claims go unfiled is simple: people are often focused on their health, not paperwork.

"Most of these people are dealing with significant health events, whether that's a diagnosis or an accident," said Paul Virtell, president of Supplemental Health Solutions at Cigna Healthcare. "At that moment, thinking, 'I've got to stop, I've got to collect receipts, I've got to submit a claim' ... we know that people don't always do that."

Employees also may not understand the benefits they selected during enrollment, Virtell said.

"Employees may not even realize what they bought; they may not understand the rules, and therefore they may not file claims because of that," he said.

Affordability is also part of the conversation. Virtell pointed to a recent Cigna-Ipsos study that found about 60% of respondents did not feel financially prepared for a health event, while 44% said they spent $1,000 or more out of pocket following a diagnosis, injury or hospitalization.

Broader industry efforts

Several insurers have introduced claims-integration programs designed to connect medical claims with supplemental benefits.

Earlier this month, Mutual of Omaha announced a partnership with Claritev that uses medical claims data to find employees who might qualify for accident, critical illness, or hospital indemnity benefits and inform them about possible claims.

Aetna has highlighted claims integration as part of its supplemental health strategy. In a company white paper, Aetna said that members whose supplemental coverage was linked to medical claims data had 1.8 times more claims and 1.24 times higher claims payments than members without that connection.

Securian Financial recently reported that 49% of certain supplemental health claims among participating clients were started through medical claims data integration. The company said this approach helps employees see benefits they might otherwise miss.

A new approach from Cigna

Cigna is introducing Smart Coverage, an employer-funded offering that combines medical coverage and supplemental benefits.

The product is designed to work alongside qualifying high-deductible health plans. Employees do not make a separate election for supplemental coverage. Instead, it is automatically included when a qualifying medical plan is selected.

Cigna said Smart Coverage uses its Simple File Sync Plus capability to connect medical claims with eligible supplemental benefits. The company said the system can identify qualifying medical events, notify employees of available benefits and, in some cases, automatically process claims.

"For those that don't remember to file a claim, or for some reason can't file a claim, Sync Plus is there," Virtell said.

In some situations, Cigna can process claims using medical data alone. In other cases, employees may need to provide additional information before a payment can be made.

Benefit amounts vary by event. Cigna said employees may receive $250 for an urgent care visit, $350 to $750 for an emergency room visit and $2,000 for a covered critical illness diagnosis. Eligible employees may receive up to $7,000 in supplemental cash benefits.

The launch comes as several insurers explore ways to connect medical claims data with supplemental benefits and reduce the number of unclaimed benefits.

Virtell said Smart Coverage is intended to complement traditional supplemental products rather than replace them.

"I don't think that this will ever replace the traditional offerings," he said. "The traditional offerings have a place."

Cigna plans to make Smart Coverage available Jan. 1, 2027, for U.S. clients with 500 to 2,999 employees. Broader availability is planned for 2028.