Global Courant
As healthcare costs continue to rise, employers have begun to shift the burden of healthcare costs onto their employees. Some have even cut back on employer-paid benefits. Health care law requires most people to purchase insurance, and most employers offer large 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 reduce costs by pushing costs onto employees in the form of increased deductibles, premiums and co-payments. By offering employees additional or voluntary insurance, this can provide financial protection in the event of a serious accident or illness. Three reasons why supplemental insurance is essential for employees are:
The increase in healthcare costs exceeds the increase
According to one report, 31 percent of employers increased employee premium shares, 30 percent increased employee co-payments, and 21 percent implemented high-deductible health insurance plans. Those are big expenses hitting employees’ wallets, but salary increases aren’t keeping pace. A recent study by the Kaiser Family Foundation found that since 2010, deductibles have increased six times faster than employee income.
Out-of-pocket limits are high, even for higher paid employees
The average out-of-pocket expense is about $7,000 for individuals and $14,000 for families, and that’s just for essential health benefits covered. Still, a whopping 52 percent of workers 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 favor price over quality, which can mean less coverage than they realize
With rising costs, it’s tempting to choose health insurance based on the monthly price tag. In fact, 30 percent of employees say the monthly premium is the most important factor when choosing a great health insurance plan each year. A lower-cost 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 comprehensive health insurance coverage. Some of these benefits include vision, dental insurance, pet insurance, short-term disability, accident, critical illness, and hospital reimbursement. With the money from these products, benefit recipients can pay for their daily living costs, such as rent, mortgage, groceries, childcare and medical bills during the disability.
When companies add voluntary products to their company’s benefits package, they can increase employee satisfaction and help them feel more financially prepared for potential life-changing events. On the other hand, employers can experience reduced operational costs while saving money. The result is a win-win situation for both employer and employee.
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