How your company and your workers 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 benefits paid by the employer. Health care law requires that most people obtain and most employers offer substantial health coverage with certain essential benefits. Still, what workers 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 expenses by imposing costs on workers in the form of higher deductibles, premiums, and copays. By offering supplemental or voluntary insurance to employees, this can provide financial protection in the event of an accident or serious illness. Three reasons why supplemental insurance is essential for employees are:
Healthcare cost increases are outpacing increases
According to one report, 31 percent of employers increased employee premium share, 30 percent increased employee copayments, and 21 percent implemented high-deductible health plans. Those are big expenses that affect employees’ wallets, but salary increases are not keeping up. A recent study by the Kaiser Family Foundation found that deductibles have risen six times faster than workers’ earnings since 2010.
Out-of-pocket limits are high, even for the highest-paid employees.
The average out-of-pocket expense is about $ 7,000 for individuals and $ 14,000 for families, and that’s just for covered essential health benefits. Yet a whopping 52 percent of employees have less than $ 1,000 to pay for out-of-pocket expenses associated with an unexpected serious illness or accident, and 28 percent have less than $ 500.
Workers tend to choose price over quality, which may mean less coverage than they think
With rising costs, it is tempting to choose health insurance based on the monthly price. In fact, 30 percent of employees say that the monthly premium is the most important factor when choosing a major health insurance plan each year. A lower-cost plan can mean savings in the short term, but it could eventually add up to significantly higher out-of-pocket costs.
Employees need a financial safety net. Supplemental insurance benefits received have long served as a way to help protect employees when they are sick or injured, regardless of their primary health insurance coverage. Some of these benefits include vision, dental, pet, short-term disability, accident, serious illness, and hospital compensation. Supplemental benefit recipients can use the money received from these products to help pay for their daily living expenses, such as rent, mortgage payments, food, child care, and medical bills for as long as the insured does not. can work.
When companies add voluntary products to their company benefits package, they can increase employee satisfaction levels and help them feel more 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.