Voluntary benefits can help close the gap on medical costs
Most experts think the cost of health care expenses will continue to rise. Fortunately, voluntary insurance products and service benefits can help employees better manage their out-of-pocket expenses.
In 2016, the cost of healthcare for a typical American family of four covered by an average employer-sponsored PPO plan was $25,826, according to the Milliman Medical Index. According to a recent Colonial Life article, this cost includes not only premiums—with about 40% being out-of-pocket expenses. That cost could also include: travel for treatment, child care, special equipment or home modifications, and/or lost income caused by time away from work.
This high-cost continues to drive the popularity of voluntary benefits that help cover deductibles, co-payments, and co-insurance. Traditional voluntary insurance products meeting the need are: hospital indemnity, critical illness, accident, cancer, and disability income, which are being bundled or offered as standalone solutions. Employer-paid GAP programs and medical expense reimbursement accounts like HSA, HRA, (and a new concept of HMA) also help tackle the issue of HDHP insureds not being able to afford their out-of-pocket medical expenses. Indirectly, there are new and innovative products helping with student loan debt relief and offering short-term payroll loans, which provides an immediate impact on employee cash flow to redirect money toward those expenses.
All of these products benefit both businesses and their employees. Employers can use voluntary benefits as a tool to attract and retain talented workers, while employees gain help with expenses that may not be covered by their core medical plan.
Since voluntary benefits are so beneficial, it’s no wonder that the product-set classified as voluntary continues to broaden and that they remain such a hot topic. At the same time, it’s important to keep an eye out for emerging voluntary trends that address what today’s employees want and expect from their employers. For instance, one non-traditional benefit that we continue to see gain traction is the need for employers to help address the overwhelming student loan debt that is becoming more and more of a problem for workers.
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