Critical illness insurance is on the rise, and employers are helping to drive the growth of the increasingly popular product by offering it as a voluntary benefit.
A recent study by Mercer, a benefits consulting firm, finds that 45 percent of employers with more than 500 employees are offering critical illness insurance, up from 34 percent in 2009.
“What we have seen is a very clear and steady rise in the number of employers offering high-deductible plans,” Barry Schilmeister, a principal in the health and benefits practice at Mercer, told Kaiser Health News. “More employers are looking at the reality of pulling back on the value of health plans but looking to offer something else that would make people feel a little more comfortable about taking on that additional risk.”
Indeed, as Kaiser explains, the rise of CI insurance correlates strongly with the rise of high deductibles for core health benefits.
The percentage of employees with deductibles of at least $1,000 has more than doubled since 2009, from 22 percent to 46 percent.
Even though Congress suspended the “Cadillac Tax,” for at least two years, meaning employers don’t have to sweat a 40 percent excise tax on generous health plans, the trend towards shifting the cost of health care to employees is unlikely to reverse anytime soon.
CI insurance is often seen as protection for a cancer diagnosis. More than half of CI insurance claims are a result of cancer, according to a recent survey by Gen Re.
That survey also found that the average payout for a qualifying diagnosis was $15,000 for employer-provided policies and $31,000 in the individual market. However, 90 percent of CI policies are purchased through employers.
However, CI insurance, unlike conventional health insurance, is still very much based on preexisting conditions. Somebody with a history of heart problems may not qualify for a policy.