As healthcare costs continue to rise, employers have started to shift the burden of health care costs onto their employees. Some have even cut back on employer-paid benefits. The health-care law requires most people to obtain and most employers to offer major medical coverage with certain essential benefits. Even so, what workers pay out-of-pocket through these plans keep rising as employers try to control their own costs.
A 2015 report revealed how employers are still looking for ways to reduce expenses by pushing costs onto workers in the form of increased deductibles, premiums and copayments. By offering supplemental or voluntary insurance to employees, this can provide financial protection in the event of a serious accident or illness. Three reasons why supplemental insurance is essential for employees are:
Healthcare cost increases are outpacing raises
According to a report, 31 percent of employers increased employees’ share of premium, 30 percent increased employees’ copayments, and 21 percent implemented high-deductible health plans. Those are big expenses hitting employees’ wallets, but salary increases are not keeping up. A recent Kaiser Family Foundation study found that deductibles have risen six times faster than workers’ earnings since 2010.
Out-of-pocket limits are high, even for higher-paid employees
The average out-of-pocket expense is approximately $7,000 for individuals and $14,000 for families, and that is only for covered essential health benefits. Yet, a whopping 52 percent of employees have less than $1,000 to pay for out-of-pocket expenses associated with an unexpected serious illness or accident, and 28 percent have less than $500.
Workers tend to choose price over quality, which may mean less coverage than they realize
With rising costs, it is tempting to choose health insurance based on the monthly price tag. In fact, 30 percent of employees say monthly premium is the most important factor when choosing a major medical insurance plan each year. A lower-cost plan may mean short-term savings, but could eventually add up to significantly higher out-of-pocket costs.
Employees need a financial safety net. Benefits received from supplemental insurance have long served as a way to help protect employees when they are sick or injured, regardless of their major medical insurance coverage. Some of these benefits include vision, dental, pet insurance, short-term disability, accident, critical illness, and hospital indemnity. Supplemental benefit recipients can use money received from these products to help pay for their daily living expenses, such as rent, mortgage payment, groceries, child care, and medical bills during the time the insured is unable to work.
When companies add voluntary products to their companies’ benefits package, they can raise employees’ level of satisfaction and help them feel more financially prepared to cope with possible life-changing events. On the other hand, employers can experience lower operational costs and save money in the process. The result is a win-win situation for both employer and employee.
How reasonable it is for businesses to want to reduce payroll taxes and lower health insurance expenses. Contact us for a 15-20 minute visit to discuss and put together a plan to lower your operational costs. And, if we do, it will be at no cost. That’s right, it won’t cost you a penny. For working individuals who are in a position or want to do it alone, we have a plan for you, too. With nearly 60 years of providing financial protection to more than 50 million people, our office has the experience in making your future somewhat brighter.