Financial hardship is one major medical event away
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Many employees today are just one serious medical event away from financial hardship, according to the “2014 Aflac Workforces Report,” which found 49% of employees have less than $1,000 available to pay for unexpected out-of-pocket medical expenses, even though high-deductible health plans have deductibles significantly higher than that.
Voluntary benefits such as critical illness, hospital indemnity and accident — which pay a fixed benefit when an employee is diagnosed with a covered critical illness, are hospitalized or sustain an injury requiring emergency room treatment — can offset high deductibles and coinsurance,
For example, for as little as $3 to $5 per week, an employee can purchase a critical illness benefit that pays up to $10,000 if they are diagnosed with any of the policy’s specified diseases, a sum that can go a long way toward meeting the minimum $1,250 deductible for an HSA-qualified HDHP, said Bruce Sletten, senior vice president and national practice leader for elective benefits at Aon Hewitt in Dallas.
And since these are indemnity payments not connected to the cost of medical services, they can be used to pay for other items related to the individual’s illness, such as transportation costs or the cost to hire help in the home when an individual is incapacitated, said Beth Grellner, health and group benefits leader at Towers Watson & Co. in St. Louis.
“Since many workers are not equipped to pay for high deductibles and other expenses not covered by their major medical policies, it’s important for insurance professionals to start conversations with employers about how supplemental plans can create a financial safety net in case of an unexpected medical crisis for employees,” said Teresa White, Aflac Inc.’s executive vice president and chief operating officer.
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