NEW ORLEANS – Companies in Louisiana looking to reduce health care costs might consider eliminating supplemental, or voluntary, benefits such as vision, dental, disability, accident, and critical illness. But there are compelling reasons why employers should continue to offer or even add these benefits to their offerings in 2016 – either paid for partly by the employer or as voluntary benefits with premiums paid by employees, Glen Golemi, CEO of UnitedHealthcare-Gulf States Region, said.
He said surveys show that voluntary benefits can help attract and retain employees. According to a 2014 report from LIMRA International, 71 percent of employers believe that voluntary benefits improve worker morale and satisfaction. Adding supplemental benefits to a core benefit offering can improve companies’ bottom lines by increasing productivity and employee engagement, while the additional tools and information improve employees’ health and help companies more effectively manage medical costs.
“A newer voluntary benefit that many employers are now offering is critical illness protection,” Golemi said. “These plans add financial certainty for employees, especially for those enrolled in high-deductible health plans, by providing a cash benefit to help fund employees’ out-of-pocket expenses after a major illness such as heart attack, stroke or cancer. More than one in four private employers with at least 10 employees offers a critical illness benefit to their non-union workforce, according to a LIMRA study, and this rate has more than doubled since 2002.”
Major illnesses are expensive, Golemi said, and for employees facing high deductibles or coinsurance payments and potential lost income, the reality of paying for them can be devastating. Critical illness protection plans are designed to supplement medical benefits and allow employees to focus on healing from their illness instead of their bills.
“Some health insurers now offer benefit packages that allow employees to select from several plans, with the company paying a set amount and employees having the option to pay the difference to enhance or expand their coverage,” he said. “This approach provides companies with a predictable and manageable cost, while giving employees the opportunity to purchase added benefits that can protect them from unexpected health events.”
For example, following the diagnosis of a major illness, those with critical illness protection could receive a payment ranging between $5,000 and $40,000, which can be used to pay medical bills or cover normal living expenses. Buying trends show critical illness plans are especially popular among employees older than 40, while younger employees are more likely to purchase accident protection. Many employers offer both types of coverage to provide financial protection options for all of their employees.
Golemi said employers that combine voluntary and medical benefits may also be able to improve health outcomes and more effectively manage costs. For instance, health plans that combine medical and voluntary benefits have shown the ability to reduce the duration of disability claims. Upon filing a critical illness or disability claim, plan participants with a chronic condition such as cardiovascular disease can receive additional support and information, including a case manager and exercise and nutrition advice. These resources mean employees may get back to health—and work—more quickly. Other integrated programs encourage preventive dental and vision care, helping to stop diseases before they start.
“Offering voluntary benefits as part of an employee’s menu of benefits options can maximize the effectiveness of a company’s health care dollars and, when offered alongside medical insurance, provide families with added peace of mind for both their health and financial protection,” Golemi said. “Employers that combine voluntary and medical benefits may be able to reduce turnover, increase productivity and build a culture of health.”
