One of the side effects of the Affordable Care Act, and high-deductible plans is that employers are realizing the importance of filling the gap with voluntary insurance, with many carriers experiencing double digit growth in the past year.
That's great for employees, who weren't ready for deductibles as high as $6,000, and needed some way to fill the gap. It's also great for employers in overall health plan savings.
But I want to challenge you to step back and take a bird's eye view. Filling a gap here and there is like the little dutch boy who saved Holland by filling a hole in the dyke with his finger. Filling the immediate gaps in employees' health insurance needs for dental & vision, for instance, takes care of today's needs, but I believe we should be thinking about an employee's overall needs, including short and long-term disability, and coverages like critical care. We need to take a longer view.
Many employees lack an income replacement plan if they were unable to work for a period of time. According to the Bureau of Statistics, fewer than 40% of employees in the private sector had short-term disability coverage and just 33% had long-term disability in 2014.
Employees with gap coverage is even lower. Fewer than one in 10 bought additional disability coverage or supplemental coverage, such as critical illness.
Research shows that companies offering and encouraging supplemental insurance that covers accidents, injuries or illness off the job, in addition to income replacement to keep them afloat while they’re laid up, experience lower workers compensation claims. This just makes sense.
Not only do these types of insurance help to fill the gap opened by ACA, and high-deductible plans, but saves employers money by either putting together a blend, or letting employees pay minimal amounts rather than straight up facing thousands for their deductible.
We’re headed in the right direction to consumer-driven health care, but it’s a work in progress, so we need to be mindful of employees’ needs on our way, to ensure we reach our destination.
Nesper, M. (6/2/2016). "9 in 10 employees lack supplemental DI, CI insurance," Employee Benefits Advisor
Retrieved 6-20-2016 from http://www.employeebenefitadviser.com/news/9-in-10-employees-lack-supplemental-di-ci-insurance
Koster, K. (6/17/2016). "4 ancillary companies detail strategy behind double-digit growth," Employee Benefit Advisor Retrieved 6-20-2016 from http://www.employeebenefitadviser.com/news/4-ancillary-companies-detail-strategy-behind-double-digit-growth
Rylan Klaseen & Associates
Rylan Klaseen & Associates
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