Nobody ever wants to hear the bad news that they have a critical condition such as cancer.

In many cases, when you check your health care coverage, you find you’ll be paying thousands of dollars in costs before your high-deductible insurance plan kicks in. You may have other expenses too — maybe you’ll need help talking care of your kids, or your house. Employees who take advantage of voluntary benefit offerings could better position themselves to control costs in the event of an unforeseen medical event.

It’s a nightmare scenario that worries many, for good reason. Medical bills are the leading cause of personal bankruptcy, according to a study last year by the financial-advice website Nerd Wallet, which estimated one in five Americans were struggling to pay their health costs. These financial vulnerabilities reflect the high costs of health care in the United States, the most expensive place in the world to get sick. They also highlight a substantial shift in the nature of health insurance.

Many employers are offering more voluntary benefits as out of pocket costs rise each year.

One such benefit, “critical illness” coverage, can pay for things conventional plans don’t. It typically pays a lump sum to policy holders hit with specific serious ailments, such as cancer or a stroke. It can fill an important cost gap for people with high-deductible plans who’d struggle to pay up-front, out-of-pocket costs for immediate health care.

In addition to deductibles and cost-sharing for pricey drugs and treatment, the payments can be used to help cover many expenses associated with serious illness that even generous employer health plans don’t cover, including travel costs to see a specialist, time off from work and extra charges for out-of-network doctors or hospitals.

Some of the nation’s largest insurers report double-digit annual growth of critical illness plans the past few years.

Big changes in conventional health coverage have fueled the growth of the critical illness lines, as more employers are moving to high-deductible health plans as a way of reducing their overall employee benefit costs and as a result of that it’s putting more financial burden on employees.

A South African physician came up with the concept of critical illness insurance in the mid-1980s. Global insurance giant Gen Re backed those first policies more than 30 years ago and has been surveying insurance companies about critical illness policies for more than a decade.

Consumers need to make sure that they know exactly what the policies will pay for — and what they will not pay for — before buying. This is why we are always stressing the importance of educating employees fully on their benefit offerings, as many people are not fully aware whether or not their provider is in their network, leading to their medical claim being denied.

For people with little savings and lots of potential out-of-pocket health care costs, critical illness insurance might be a good option, he said. Other consumers may find sticking with conventional coverage is best, he added.

We always hear stories about families being burdened with huge healthcare costs due to a loved one becoming unexpectedly ill; some of these costs would have been reduced with voluntary benefits programs such as critical illness.

The changing health insurance landscape is one reason why NARFA offers Voluntary Benefit Programs to our members. Financial burdens on employees and their families affect their productivity and much more. And, with health insurance premium costs continuing to rise, we strongly believe that employers should continue to offer rich benefits through better strategy and programs such as voluntary benefits.

To learn more about our programs and how we can help your business control costs during these rapidly changing times, please contact us today. Since 1929 we have helped businesses remain strong!



Categories: 2016, Employee Benefits

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