A large number of workers are struggling with out-of-pocket costs within high-deductible health plans, but many are also not aware of supplemental plans that can augment those costs, according to the Securian Benefits Survey July 2017.
KRC Research surveyed 573 adults in group plans on behalf of Securian Financial Group, and found that one-third (31 percent) of those with employer-provided health insurance report having paid or know a family member who has paid an unexpected out-of-pocket medical expense in the past five years caused by a critical illness such as cancer, a heart attack or a stroke.
Sixty-one percent say the costs were manageable, but a quarter (27 percent) say the costs set them back financially, and 12 percent say they could not afford the out-of-pocket costs and have not yet paid the bills. Meanwhile, 12 percent say they do not know how they would pay a $500 out-of-pocket expense in the future, and 21 percent are not sure how they would pay a $5,000 expense.
While paying for out-of-pocket medical expenses would be the top financial concern for 42 percent of workers facing a debilitating injury, a critical illness diagnosis or a hospitalization, an even higher percentage of respondents (58 percent) say their top concern would be lost wages from work, the ability to pay for regular monthly expenses such as groceries, or the need to take on additional expenses such as lawn care or cleaning.
However, less than half (44 percent) of the respondents are aware that many employers now provide supplemental group insurance options to help employees pay for out-of-pocket expenses and other costs associated with an accidental injury, hospital stay or critical illness.
“Employers recognize that health care costs have become burdensome to their workers and their families, and it’s important to remember that these cost increases have impacted employers’ bottom lines as well,” says Terry Holloway, an employee benefits advisor and executive vice president with insurance broker Cobbs Allen. “Supplemental group insurance benefits are a cost-effective solution for both employers and employees. We have seen a significant increase in employer interest in these and other voluntary benefit platforms in the past five years, along with innovative enrollment solutions from insurance carriers.”
In fact, 70 percent of those on employer-sponsored health insurance are offered benefits in addition to their health plan. The most common benefit offered is life insurance (54 percent), followed by disability insurance (38 percent) and a health savings account (36 percent). A quarter (24 percent) say their employer offers accidental injury insurance, while 15 percent have access to critical illness insurance and just 9 percent have access to hospital indemnity insurance.
Nearly one-fifth (18 percent) are unaware of the additional benefits offered by their employer and 12 percent say their employer offers none of those benefits, although most take advantage of additional benefits offered by their employer.
Fully 75 percent of those offered life insurance take advantage of it. About two-thirds (64 percent) also take advantage of accidental injury insurance, if offered. Other popular coverages that the respondents in group plans take advantage of, when offered, include hospital indemnity insurance (59 percent), disability insurance (54 percent), HSAs (52 percent) and critical illness insurance (47 percent).
“The rising cost of health care has driven many employers to offer supplemental group insurance products, often in conjunction with a health savings account,” says Elias Vogen, a director with Securian. “This combination can be cost-effective for both employer and employee.”
The survey was conducted online from June 8 to June 12, and a total of 1,010 survey respondents answered an initial screener question on the source of their health insurance. The rest of the survey was answered by a base of 573 respondents who participate in a health insurance plan provided by their employer or their spouse’s employer. The sample was weighted by demographics such as age, gender, race, region and income “to ensure reliable and accurate representation of the national population age 18 and older.”