How your company and employees benefit from supplementary insurance

As health care costs continue to rise, employers have begun to shift the burden of health care costs onto their employees. Some have even cut back on employer-paid benefits. The health care law requires that most people receive medical coverage and most employers provide major medical coverage with certain essential benefits. Still, the amount employees pay out of pocket through these plans continues to rise as employers try to control their own costs.

A 2015 report revealed how employers are still looking for ways to cut costs by pushing costs on employees in the form of increased deductibles, premiums and co-payments. Offering employees additional or voluntary insurance can provide financial protection in the event of a serious accident or illness. Three reasons why supplemental insurance for employees is essential:

Healthcare cost increases outpacing increases

According to a report, 31 percent of employers increased employee share of the premium, 30 percent increased employee co-payments and 21 percent implemented high-deductible health plans. Those are big costs that hit employees’ pockets, but the salary increases are not keeping pace. A recent survey by the Kaiser Family Foundation found that deductibles have risen six times faster than employee incomes since 2010.

Own limits are high, even for higher paid employees

The average out-of-pocket cost is about $7,000 for individuals and $14,000 for families, and that’s just for covered essential health benefits. As many as 52 percent of employees have less than $1,000 to pay for out-of-pocket expenses related to an unexpected serious illness or accident, and 28 percent have less than $500.

Employees tend to prefer price over quality, which can mean less coverage than they realize

With costs rising, it’s tempting to opt for health insurance based on the monthly price tag. In fact, 30 percent of employees say the monthly premium is the most important factor in choosing a major health insurance plan each year. A cheaper plan can provide short-term savings, but can ultimately lead to significantly higher out-of-pocket costs.

Employees need a financial safety net. Supplemental insurance benefits have long served as a way to help protect employees when they are sick or injured, regardless of their main medical insurance. Some of these benefits include eyesight, dentistry, pet insurance, short-term disability, accident, critical illness, and hospital reimbursement. Recipients of supplemental benefits can use the money they receive with these products to pay for their daily living expenses, such as rent, mortgage payments, groceries, childcare and medical bills during the time the insured is unable to work.

See also  Banking and financial services - essential part of everyone's life

When companies add voluntary products to their company benefits package, they can increase employee satisfaction and help them feel better financially prepared to deal with potential life-changing events. On the other hand, employers can experience lower operating costs and save money in the process. The result is a win-win situation for both employer and employee.