As health care costs continue to rise, employers have begun shifting the burden of health care costs onto their employees. Some have even cut employer-paid benefits. The health care law requires most people to obtain and most employers to offer major 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 pushing costs onto 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 supplemental insurance is essential for employees are:
Increases in health care costs are outpacing increases
According to one report, 31 percent of employers increased the employee portion of the premium, 30 percent increased employee copays, and 21 percent implemented high-deductible health plans. Those are big expenses that hit employee wallets, but pay increases don’t stick. A recent study by the Kaiser Family Foundation found that deductibles have risen six times faster than workers’ income 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 out-of-pocket expenses associated with a serious illness or unexpected accident, and 28 percent have less than $500.
Workers tend to choose price over quality, which may mean less coverage than they think
With costs on the rise, it’s tempting to choose health insurance based on monthly price. In fact, 30 percent of employees say the monthly premium is the most important factor when choosing a major health insurance plan each year. A lower-cost plan may mean short-term savings, but could eventually add up 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 primary health insurance coverage. Some of these benefits include vision, dental, pet insurance, short-term disability, accident, critical illness, and hospital indemnity. Supplemental benefit recipients can use the money received from these products to help pay for daily living expenses such as rent, mortgage payment, groceries, child care and medical bills during the time the insured is unable to to work.
When companies add voluntary products to their company’s benefits package, they can increase employee satisfaction and help employees 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.