. Hospital indemnity plans help employees reduce their out-of-pocket costs by providing benefits for a hospital stay, which can be used to cover the medical deductible. (Photo: Shutterstock) For an employer, few things are more unsettling than receiving an unexpected call or email that an employee has been hospitalized. Often, when someone is admitted to the hospital unexpectedly, many questions start going through a supervisor's head. What happened? Will he or she be OK? How long will the recovery take? Are there long-term implications?
An employee may have many of the same questions, with the added burden of financial concerns. How long will I be off work? What about my family's needs? How will I cover my deductible? Will all of the treatment or medicine be covered by insurance? How much will subsequent treatment and medicine cost? The list goes on.
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These questions may intensify with the increased popularity of high-deductible health plans (HDHP) as participants are required to pay the deductible, which can be thousands of dollars, before their insurance starts paying. A recent Kaiser Family Foundation survey found that among people with health insurance, 1 in 5 working-age Americans reported having trouble paying medical bills in the past year. Of those insured with medical coverage, 63 percent reported using most or all of their savings to cover the costs. Fortunately, these gaps in coverage can be reduced through the purchase of voluntary insurance benefits.
The following three benefits can demonstrate to your clients how voluntary insurance has evolved over the years to better meet the needs of today's workforce. They include explaining how products like hospital indemnity can help offset coverage gaps and how technology solutions have been created to better prepare for the unexpected.
Coverage to match the changing benefits landscape
Hospital indemnity insurance has been around for decades, but the plans have become more relevant in recent years due to the growth of HDHPs. Hospital indemnity plans help employees reduce their out-of-pocket costs by providing benefits for a hospital stay, which can be used to cover the medical deductible. Most of the hospital indemnity plans offered today are compatible with a Health Savings Account (HSA), allowing participants to continue to save for future medical costs through tax-free contributions. In addition, plans also offer benefits for wellness, which can help encourage employees to get preventive screenings.
Coverage to meet changing workforce needs
Hospital indemnity insurance can be especially helpful for millennial employees who may not be prepared to cover unforeseen medical expenses. As the largest living generation by population size (79.8 million in 2016), millennials are quickly becoming the majority in today's workforce. Ranging from 21 to 37 years old, many employees in this generation are beginning to start their own families. While this can be an exciting time in one's life, an unexpected hospital visit for an accident or illness and its financial implications, could be crippling to a young family — especially with the cost of children at home and/or a baby on the way. Hospital indemnity products can help families cope with the costs of an unexpected hospital visit.
Another benefit of hospital indemnity products is that coverage can help cover planned hospital visits, such as maternity or elective surgery. Plans typically provide a benefit for hospital admission and each day of the hospital stay. Critical care unit admission and stays also are covered.
Coverage that helps protect the lifestyle and family needs of its employees can be an attractive benefit that may catch a client's attention. In the era of HDHPs, hospital indemnity can be a beneficial option for employees, particularly for the millennial generation with families to support, who will likely have an unexpected or planned hospital visit(s) within the upcoming years.
Technology solutions to enhance the enrollment process
In today's world of communications overload, employees are bombarded with emails, e-newsletters and lunch and learns with information about benefits offerings. For employees, sometimes having all of this information available makes it challenging to decipher what benefits are right for them and their families.
To help overcome this industry-wide challenge, voluntary benefits carriers have expanded and enhanced enrollment tools to better serve clients and their workforce. Persona-based decision support tools help employers convey the value for certain coverages by providing employees with a personalized experience or recommendation.
These decision support tools communicate the need for the coverage in short videos or claims examples. Decision support tools often have a variety of scenarios for employees to select from based upon their own personal concerns or situation. This type of education can help highlight the need for benefits, like hospital indemnity coverage, for employees who are enrolling in an HDHP plan for the first time.
When you speak with clients, strengthen your case by tying all these points together. Explain that with the right benefit offerings and the right communications tools, clients can meet the needs of their workforce and provide coverage that fits their lifestyle. The unpredictable can happen — but, being prepared can make that unexpected and traumatic life event a little more manageable. As health care costs continue to rise, help clients protect their employees from the financial burden of unforeseen out-of-pocket expenses by including hospital indemnity coverage.
Danielle Lehman, senior voluntary product manager at The Standard, is responsible for the product strategy and development of the company's supplemental product offerings.
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