How important is supplemental coverage?

Early in my career—way before COVID-19—I managed absences and disability events for our employer customers.

During this experience, I saw firsthand how an unexpected illness or injury can impact so many aspects of a person’s life. Beyond just trying to treat and recover, there were significant challenges caused by reduced income while they were out of work, including mounting health care expenses that their benefits didn’t fully cover. This drove my passion around benefits and often made me question, what if this happened to me or someone close to me?

It’s always been a fact, you need to prepare for the unexpected. Employers also need to protect their greatest assets; their employees. But COVID-19 brought these facts into even clearer focus. The past 18 months—full of unexpected illness, premature deaths, and social and economic disruption—have changed people’s perceptions about risk, disability, and health. They’re rethinking their plans and reconsidering what protection they need—and this is a unique opportunity for employers and carriers to bring them the education and coverage they need.

Coverage issues aren't a new problem …

Even before COVID:

• 43% of working Americans said they wouldn’t be able to cover an unexpected medical bill of $500 or more.[1]
• There was an upward trend in terms of more chronic illness, and people being more sedentary.[2]
• More than half of working Americans said they couldn’t cover the full deductible costs on their health insurance if someone in their family had a serious illness.[3]
• Almost half of working Americans said that they had put off or avoided care because they couldn’t afford it.[4]
• Medical debt has long been the #1 cause of bankruptcy.[5]

… but we're more aware of the problem than ever before, and it needs to be addressed.

Coverage that goes beyond traditional benefits creates a more protected and productive workforce, with less absenteeism and less presenteeism. What strategies can you utilize as an employer to help your employees truly understand their options and choose the appropriate amount and types of coverage?

Strategies to help employees better understand their coverage

Take a holistic view of your workforce and the benefits you offer them

Do you need to diversify your product portfolio to include supplemental coverages such as accident, critical illness, and hospital indemnity?

How do employees want benefits information?

Don’t assume a whole generation wants information in only one way. Not all young people want to go online. Not all older people prefer a printed brochure or a one-on-one talk. Offer benefit information in person, in print, and online—so people can easily pick the method they feel comfortable with.

How can you support employees outside of their annual enrollment period?

There’s a time and a place for benefits discussions— anytime! Educate frontline managers so they can communicate about benefits throughout the year and get employees engaged. Hiring managers, especially, can be advocates for the benefits your company offers when they’re recruiting new talent.

Can you use your carriers and administrative partners to glean valuable data?

They can take a deep dive into your population and program performance to help you learn who is participating in which benefits, and how participation levels vary across age, demographics, and salary levels. From initial participation (enrollment) to end results (claims), you can see the gaps in coverage that present opportunities for new plan offerings, changes, outreach, and education. It’s important to get people to participate at the right levels, not just the convenient levels. Nothing beats alignment and partnerships between carriers and benefit administrators on putting this puzzle together for you.

Rethinking benefits in the wake of COVID-19

COVID-19 presented us with an opportunity to rethink the type of benefits companies should be offering to their workforce and how to best raise employee awareness and engagement. We can view COVID-19 as an inflection point that has only served to highlight some basic truths: People are living longer. Which means they are working longer at increased risks of illness and injury during the working years. They also are not saving enough, even as healthcare continues to get more expensive. So perhaps we need to stop referring to supplemental benefits coverage that helps fill in the financial gaps as voluntary or unnecessary. Because, in reality, this type of coverage has become a necessity when it comes to keeping up with health care costs and protecting financial security of American workers and their families.

Listen to the whole conversation about this timely topic I recently had with Lincoln Financial Group benefit professionals, as well as Dr. Glenn Pransky, scientific advisor for Lincoln. You can find the podcast at https://www.buzzsprout.com/1180823/8930590 as well as delivered via Apple Podcasts, Google Podcasts, and Spotify.

You can also watch my A Peak at Pinnacles interview with Scott Venerable AVP Benefits Advocacy at Businessolver below. 

Jeremy Parr is the Director of Business Development at Lincoln Financial Group. 

• [1] Attitudes about “Protection” & Value of Hospital Indemnity Insurance, June 2021 LFG Consumer Sentiment Tracker
• [2] https://www.pwc.com/gx/en/industries/healthcare/emerging-trends-pwc-healthcare/chronic-diseases.html
• [3] Attitudes about “Protection” & Value of Hospital Indemnity Insurance, June 2021 LFG Consumer Sentiment Tracker
• [4] Kaiser Family Foundation Health Tracking Poll (conducted December 13-19, 2016)
• [5] https://www.amjmed.com/article/S0002-9343(09)00404-5/pdf