Think Outside-the-Box for Supplemental Health Products

Critical Illness and Hospital Indemnity plans are among the fastest growing voluntary benefits, but they don’t address today’s employees’ main financial pain point: their out-of-pocket cost-sharing responsibility. With the average employee unable to afford an unexpected $1,000 bill and the average individual deductible topping $1,644, the need for supplemental health coverage is clear. Unfortunately, traditional supplemental products don’t cover enough to ease the cost-sharing burden that comes with serious injuries and illnesses. 

Think about conditions like kidney stones, benign tumors, pneumonia, tonsillitis—these conditions aren’t covered by today’s Critical Illness plans. You aren’t likely to be admitted to the hospital for treatment. Accident plans also wouldn’t offer coverage because the conditions above are illnesses, not injuries. Yet, conditions like these can run up significant unexpected bills for physician services, imaging, labs, prescriptions and potentially a host of other costs. 

It’s time for payers, benefits advisors, and managers to do some outside-the-box, back to basics thinking about supplemental health benefits—particularly if these plans are offered as voluntary benefits paid for by cash-strapped employees. Here are a few ways to push your thinking about your supplemental health offering:

1. Bigger supplemental health payouts aren’t always better.
   We’re used to large critical illness benefit amounts, but with life insurance and short-term and long-term disability policies in place, a large critical illness benefit may be unnecessary in the rare case that a life-threatening critical illness takes an employee out of work for months. 

   Supplemental health benefits paid for a wide range of conditions in amounts that are more aligned with the true out of pocket exposure can make a big difference for a family during the course of a normal year. The added upside of these rebalanced benefit amounts is that the plan can cover more conditions and the premiums become much more affordable.

2. One size doesn’t fit all—offer choices.
   Employees may choose from a range of health insurance plans to cover themselves and possibly also their families with higher or lower deductibles and out of pocket maximums. We should be offering plans with flexible benefit amounts so that employers and employees can personalize their coverage to get just the right amount of coverage to shield them from the financial shock of their cost-sharing. 

   After that, their health insurance is going to pick up the rest of the expenses for their care. The ability to personalize your benefit amounts to your family’s needs also allows employers and employees to get coverage with a premium they can afford on a monthly basis.

3. Build supplemental health into your core benefits strategy.
   Voluntary benefits like supplemental health plans have often been treated as afterthoughts tacked onto the end of the benefits program. Unfortunately, when they are considered that way, they see lower participation rates. 

   According to NFP’s Voluntary Benefits National Practice Leader, Kim Heald, benefit advisors and employers should be considering supplemental health plans within the core benefit strategy. That way the employer and the employee have a more complete picture of how their primary health insurance works together with any available supplemental coverage.

Payers, benefit advisors, and employers all have a role to play in making this kind of thinking possible. We need new plan designs with flexible benefit amounts, simplified benefit triggers, and a better claims experience. We need brokers who are willing to change the way they design the overall health benefits program, and we need employers who demand insurance products and benefit programs that will truly meet their employees’ needs. When we think outside the box together, that’s when we’ll really begin to see better health benefits that bring costs down for employers and employees while shielding families from the burden of unexpected medical expenses.

Veer Gidwaney is Founder & CEO of Brella Insurance, a supplemental health insurance company on a mission to build a world where health hardships don’t become financial hardships. To learn more visit joinbrella.com or follow Brella on Linkedin or Twitter.