Why Do More Employees Want Supplemental Insurance? Real-World Value.

Why is the popularity of supplemental insurance growing? Employees are enrolling in coverage like accident, critical illness and hospital indemnity insurance because it can help pay costs linked to accidents or serious illnesses that other forms of insurance may not cover.

A recent Benefitfocus study shows that participation rates for accident and critical illness plans are up by more than 65% since 2018. The study also reveals that, over the last four years, employee participation in hospital indemnity insurance has more than doubled.¹

Financial Protection for Real Life

This growing participation tracks with what’s happening in employees’ lives. Of the campaigns on GoFundMe, 26.7% were raising money for health-related costs.² Using crowdsourcing to pay for health care expenses may stem in part from the fact that 69% of Americans have less than $1000 in savings.³

The reasons for employees’ struggles with costs that can lead to financial hardship are complex and varied. But the experience of needing financial protection — and not having it — cuts across the workforce.

You already put a lot of effort into providing your employees with medical insurance. Unfortunately, having a company health plan doesn’t mean employees won’t face uncovered costs that could create financial difficulties. Their expenses could include copays, hotel stays or everyday needs like groceries. The good news is you can offer benefits that help employees prepare.

Think of supplemental insurance as a tool to strengthen their financial security. In the Benefitfocus research, we see employers ramping up their reliance on this coverage. In 2021 more than two-thirds of employers are offering accident and critical illness plans. And, nearly 50% of employers have made hospital indemnity insurance an option.¹

The Nuts and Bolts: How Supplemental Coverage Protects the Workforce

Exactly how can these products help protect your employees from debt? Read on for some examples of how accident, critical illness and hospital indemnity insurance work.

Accident Insurance

Ivan’s 15-year-old daughter was playing soccer in a tournament. When she attempted a slide tackle, her leg got tangled with her opponent leaving her unable to walk. Ivan took his daughter to an emergency room, where scans revealed a torn ACL and meniscus. Doctors said she would need knee surgery to repair the damage.

Fortunately, Ivan had bought the accident insurance offered by his company. He used part of his benefit to pay the copays from his medical plan. But his accident insurance benefit also helped cover wages he lost taking time off to care for his daughter. And that helped Ivan feel more confident about his finances.

Ivan’s accident insurance paid benefits for:

• Emergency room
• X-ray
• MRI
• Knee surgery
• Surgical facility
• Crutches
• Physician follow-up
• Physical therapy (two sessions)
• Youth Organized Sports — paid an extra 25% of total benefits

Critical Illness Insurance

Rosa beat cancer, but faced many costs she didn't expect. There were her medical plan’s copays for doctor visits and what she owed for chemotherapy after meeting her deductible. She also bought hair prosthetics, paid for travel to specialists, and had alternative treatments. What's more, her husband missed work to help care for her. All the bills felt overwhelming on top of being sick. But there was good news. The benefits from Rosa’s critical illness plan helped cover the expenses.

Rosa used the critical illness insurance benefit to help pay for:

• Medical insurance deductible
• Out-of-pocket expenses for six months
• Alternative treatments and diets not covered by her medical plan
• Transportation to medical appointments and treatments
• Lodging near treatment facility
• Husband's lost wages

Hospital Indemnity Insurance

Jamie was having cold-like symptoms — a slight fever, fatigue and chest congestion. The symptoms worsened and they were admitted to the hospital, spending two days in the intensive care unit. After being treated with antibiotics for ten days, Jamie was able to go home. But they worried about how much their hospital stay would cost. When Jamie’s hospital indemnity insurance plan helped cover the extra out-of-pocket expenses, it was a relief. Jamie could now focus on making a full recovery.

Jamie’s hospital indemnity insurance paid benefits for:

• Hospital admission
• 10-day hospital stay
• Critical care admission
• Two-day critical care stay

Talk to Your Broker or Insurance Advisor

As you’re thinking about a complete benefits package for your employees, make sure you consider supplemental benefits. You’ll be offering another tool for employees to prepare and protect their finances. Your broker or insurance advisor can help you understand more about how these products work with the benefits you currently provide.

Want to find out about supplemental products from The Standard? Explore our Accident, Critical Illness, and Hospital Indemnity insurance benefits.