Only 34 percent of employees who are actually enrolled in employer-offered benefits say they’d rely on voluntary benefits to cover non-medical expenses due to a serious injury or illness. (Photo: Shutterstock)
Voluntary benefits: employees may have them, but they don’t necessarily think of using them when circumstances arise.
A new study on voluntary benefits from Cigna finds that employees don’t necessarily understand the medical or the non-medical cost perspective of supplemental voluntary benefits when it comes to the role they can play in the event of major illnesses or serious injuries.
“Voluntary benefits that are designed to complement core benefits provide additional peace of mind, plus convenience and affordability,” says Marc Jeffreys vice president of business operations, Enterprise Voluntary Benefits at Cigna.
Even though 81 percent of respondents recognized the financial risk presented by the medical bills that arise from such serious health challenges, only 34 percent of employees who are actually enrolled in employer-offered benefits say they’d rely on voluntary benefits to cover non-medical expenses due to a serious injury or illness.
Instead, they’d be looking at raiding their savings (49 percent), handing over their credit cards (32 percent) or borrowing or withdrawing retirement money from their 401(k) or IRA to handle such expenses (22 percent).
The problem seems to be that while they’re at least somewhat familiar with such voluntary benefits as dental, group term life insurance and short-term disability, they’re far less well acquainted with other voluntary coverage that can kick in in the event of a critical illness, hospitalization or accidental injury.
But if they knew critical illness insurance would bail them out with a lump sum for such costs as travel, room and board, transportation, child care, treatment options or out-of-pocket expenses not covered by primary health insurance, 51 percent of respondents said they’d sign up for it—and 45 percent would enroll in coverage for hospital indemnity insurance, which could pay a lump sum toward hospitalization for something like surgery requiring an overnight stay for recovery—as well as for uncovered out-of-pocket expenses like child care or travel.
Then there’s accidental injury insurance, which would tempt 43 percent if they knew it pays out a lump sum toward costs not covered by primary insurance, such as rehabilitation, transportation, childcare, travel or other out-of-pocket expenses.
As open enrollment approaches, the study results suggest it might be wise to devote more effort to acquainting employees with the role that such supplemental insurance coverage can play in extending their protection against the financial challenges that can arise out of such serious health issues, lest they be overwhelmed and make poorly informed or hasty decisions.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
