Don't be fooled. While many insurance products fill gaps, the term “gap insurance” is generally accepted and widely used to mean only one thing: supplemental medical coverage that pays based on the hole or space the major medical plan leaves uncovered in the form of deductibles, coinsurance, and copays.

There's nothing new about gap plans, which are designed to fit under a major medical plan and cover much of an employee's out-of-pocket costs left after major medical has paid. And as deductibles and out-of-pocket costs have skyrocketed, the demand for gap plans has similarly grown.

Over the past 20 years, first-dollar health insurance coverage has become as rare as the cassette player. And yet, the worker who has difficulty withdrawing a $20 bill from the ATM will struggle greatly with a $1,000 deductible.

Related: What's driving critical illness insurance?

When accidents happen or diseases strike, having a source of funds to assist with unexpected expenses can make a profound difference. That “hole or gap” may be overwhelming without insurance protection.

Gap plans can be built in several ways. A very common approach is to reduce the total premium cost to the employer by raising deductible and out-of-pocket maximums and directing a portion of those dollars toward a supplemental gap product.

Often, the broker will leave the original deductible exposure intact.

The intent is to control the employer's expenses, and gap products can be quite useful in this regard.

One new trend we're seeing is brokers aiming for richer first-dollar benefits instead of focusing solely on a premium reduction. When this can be accomplished with a gap product, the result is quite dramatic. Adding a gap plan to high-deductible medical coverage may create valuable first-dollar benefits.

While gap products are generally designed with exclusions, typically they are able to provide first-dollar benefits for the big ticket events like hospitalization, outpatient surgery in a hospital or doctor's office, and more. Some gap plans even offer first-dollar benefits for routine medical events such as doctor's office visits and screening tests.

When employees ask their employers if they provide benefits because they have to or because they want to, they can direct them towards option 1) save more money; or option 2) make the plan richer at the lowest cost.

Related: Taking another look at disability insurance

Imagine showing an employer a way to provide first-dollar coverage. Many employees have probably never had first-dollar coverage before, and will see that as a huge benefit.

It's widely acknowledged that employers offer benefits to attract the best talent, to compensate them and to tie them more closely to the company. Providing first-dollar benefits for medical events demonstrates an employer's goodwill, and can make financial sense, too. Gap plans can be a powerful tool to help employers control their health care costs while easing some of the out-of-pocket medical burden for employees.

Like everything else health insurance-related today, much is up in the air pending administrative changes to the ACA. But one thing seems fairly certain to me; I doubt that medical carriers will suddenly lower deductibles and out-of-pocket costs. And until that day, I'll continue to educate brokers on the benefits of gap plans.

Want to know more? Be sure to catch my session “Gap Plans: Fact or Fiction” at the BenefitsPRO Expo in Indianapolis. I look forward to seeing you there!